Canadian-listed Caledonia Mining, which owns Blanket Mine in Zimbabwe, has declared a quarterly dividend of 1.125 cents after moving its head office offshore to avoid taxes on the payments.
Caledonia, which owns 49 percent of Blanket Mine, successfully moved its registration from Canada to tax haven Jersey, Channel Islands, on March 19 this year.
Jersey is one of seven inhabited islands making up the Channel Islands and, along with Guernsey, is a British dependency.
In February, Caledonia said the move would remove Canadian withholding tax on Caledonia’s dividends for non-Canadians. Such a move would reduce travel and compliance costs and simplify its group structure, it added. Shareholders approved the move on February 18.
“The dividend to be paid at the end of April 2016 is the first dividend that Caledonia will pay as a Jersey-domiciled company and will be paid without the deduction of withholding tax.
Caledonia’s dividends are no longer eligible for the purposes of the Income Tax Act (Canada),” it said on Tuesday.
Non-Canadians are subject to a 15 percent withholding tax charge.
Caledonia is one of the few foreign firms to successfully conclude a local ownership transaction in Zimbabwe, having transferred majority control of its 43 000 ounce per year Blanket mine in southern Zimbabwe to indigenous shareholders in 2012.
The Channel Islands, along other tax havens, have come under increased spotlight over their use by wealthy figures in global politics and business in tax evasion and avoidance schemes.
Millions of leaked documents from Panamanian legal and corporate consultancy firm Mossack Fonseca, dubbed the Panama Papers, have exposed an elaborate web of money laundering, tax dodging and evasion of financial sanctions, often using opaque shelf companies registered in tax havens.-The Source