Franco-Nevada Reaches Settlement on Canadian Tax Disputes

Rhea-AI Summary

Franco-Nevada (NYSE:FNV) has successfully resolved its tax dispute with the Canada Revenue Agency (CRA) regarding reassessments of the 2013-2019 taxation years. The settlement involves the Company's subsidiaries Franco-Nevada Barbados and Franco-Nevada Mexico.

Key terms include: no tax payment required on foreign earnings for 2013-2019, an increase in service fee markup from 7-20% to 30%, and additional income of C$1.4 million subject to Canadian tax. The company expects no additional cash taxes due to non-capital losses. The settlement principles are expected to apply beyond 2019, barring material changes.

Over the past 18 months, Franco-Nevada has completed approximately $3 billion in transactions, demonstrating its continued focus on portfolio expansion.

Positive

• No tax payment required on foreign earnings for 2013-2019 period
• Transfer pricing penalties will be reversed and interest charges reduced
• Settlement provides greater investment certainty for global growth
• $3 billion in transactions completed over last 18 months showing strong growth

Negative

• Service fee markup increased significantly from 7-20% to 30%
• Settlement is not legally binding for years after 2019

(in U.S. dollars unless otherwise noted)

TORONTO, Sept. 11, 2025 /PRNewswire/ - Franco-Nevada Corporation ("Franco-Nevada" or the "Company") is very pleased to announce that it has reached a settlement with the Canada Revenue Agency ("CRA") which provides for a final resolution of Franco-Nevada's tax dispute in connection with the reassessments under transfer pricing rules of the 2013 to 2019 taxation years (the "Reassessments") related to income generated by two of the Company's wholly-owned foreign subsidiaries, Franco-Nevada (Barbados) Corporation and Franco-Nevada Mexico Corporation, S.A. de C.V. ("Franco-Nevada Barbados" and "Franco-Nevada Mexico", respectively) outside of Canada.

Settlement Highlights

• The settlement will not require the payment of any tax in Canada on the foreign earnings of Franco-Nevada Barbados and Franco-Nevada Mexico for the 2013 to 2019 taxation years.
• The service fee charged by Franco-Nevada for certain services provided to Franco-Nevada Barbados and Franco-Nevada Mexico will be adjusted to increase the mark-up applied to Franco-Nevada's cost of providing those services from the current range of 7-20% to 30%.
• This additional service fee will result in Franco-Nevada being subjected to Canadian tax on additional income of C$1.4 million in Canada for the 2013 to 2019 taxation years. After the application of non-capital losses, Franco-Nevada does not anticipate any additional cash taxes will arise in respect of these years as a result of the settlement.
• Transfer pricing penalties reflected in the Reassessments will be reversed. The interest charges reflected in the Reassessments will be reduced and adjusted consequentially to the adjustments described above.
• The settlement is not legally binding on the CRA for years after 2019, however, we believe the transfer pricing principles established by the settlement will apply to years after 2019, provided there are no material changes to the facts or law.

"We are pleased to reach this settlement with the CRA and believe it is a great outcome for Franco-Nevada and its shareholders," said Paul Brink, President & CEO of Franco-Nevada. "This settlement provides greater investment certainty for our global growth ambitions and puts the tax dispute behind us. We can now continue to focus on adding high-quality, long-life assets to our diverse portfolio as we have done over the last 18 months with approximately $3 billion of transactions being completed."

Advisors and Counsel

Osler, Hoskin & Harcourt LLP acted as legal counsel to Franco-Nevada.

Corporate Summary 

Franco-Nevada Corporation is the leading gold-focused royalty and streaming company with the largest and most diversified portfolio of cash-flow producing assets. Its business model provides investors with gold price and exploration optionality while limiting exposure to cost inflation. Franco-Nevada uses its free cash flow to expand its portfolio and pay dividends. It trades under the symbol FNV on both the Toronto and New York stock exchanges. Franco-Nevada is the gold investment that works.

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SOURCE Franco-Nevada Corporation

FAQ

What are the key terms of Franco-Nevada's (FNV) tax settlement with CRA?

The settlement requires no tax payment on foreign earnings for 2013-2019, increases service fee markup to 30%, and subjects C$1.4 million to Canadian tax, with no additional cash taxes expected due to non-capital losses.

How much additional income will Franco-Nevada (FNV) be taxed on in Canada?

Franco-Nevada will be subject to Canadian tax on additional income of C$1.4 million for the 2013-2019 taxation years.

Will Franco-Nevada (FNV) have to pay additional cash taxes for 2013-2019?

No, Franco-Nevada does not anticipate any additional cash taxes for 2013-2019 due to the application of non-capital losses.

How much has Franco-Nevada (FNV) invested in transactions recently?

Franco-Nevada has completed approximately $3 billion in transactions over the last 18 months.

Does the CRA tax settlement apply to Franco-Nevada (FNV) after 2019?

While not legally binding after 2019, the transfer pricing principles are expected to apply to future years, provided there are no material changes to facts or law.