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COMMITMENTS AND CONTINGENCIES | 9 Months Ended
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Mar. 31, 2024
Commitments and Contingencies Disclosure [Abstract] |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Legal Matters The Company is involved, from time to time, in various litigation, administrative and other legal proceedings, including regulatory actions, incidental or related to its business, including consumer class or collective actions, personal injury (mostly involving allegations related to alleged asbestos in the Company’s talc-based cosmetic products), intellectual property, competition, compliance and advertising claims litigation and disputes, among others (collectively, “Legal Proceedings”). While the Company cannot predict any final outcomes relating thereto, management believes that the outcome of current Legal Proceedings will not have a material effect upon its business, prospects, financial condition, results of operations, cash flows or the trading price of the Company’s securities. However, management’s assessment of the Company’s current Legal Proceedings is ongoing, and could change in light of the discovery of additional facts with respect to Legal Proceedings not presently known to the Company, further legal analysis, or determinations by judges, arbitrators, juries or other finders of fact or deciders of law which are not in accord with management’s evaluation of the probable liability or outcome of such Legal Proceedings. From time to time, the Company is in discussions with regulators, including discussions initiated by the Company, about actual or potential violations of law in order to remediate or mitigate associated legal or compliance risks and liabilities or penalties. As the outcomes of such proceedings are unpredictable, the Company can give no assurance that the results of any such proceedings will not materially affect its reputation, business, prospects, financial condition, results of operations, cash flows or the trading price of its securities. Brazilian Tax Assessments The Company’s Brazilian subsidiaries receive tax assessments from local, state and federal tax authorities in Brazil from time to time. Current open tax assessments as of March 31, 2024 are:
Assessment received | Type of assessment | Type of Tax | Tax period impacted | Estimated amount, including interest and penalties as of March 31, 2024 |
Mar-18 | State sales tax credits, which the Treasury Office of the State of Goiás considers as improperly registered | ICMS | 2016-2017 | R$0.0 million (approximately $0.0) (a) |
Aug-20 | ICMS | 2017-2019 | R$721.5 million (approximately $143.9)
Oct-20 | Federal excise taxes, which the Treasury Office of the Brazil’s Internal Revenue Service considers as improperly calculated | IPI | 2016-2017 | R$430.8 million (approximately $85.9)
Nov-22 | IPI | 2018-2019 | R$581.0 million (approximately $115.8)
Nov-20 | State sales taxes, which the Treasury Office of the State of Minas Gerais considers as improperly calculated | ICMS | 2016-2019 | R$222.8 million (approximately $44.4)
Jun-21 | State sales tax, which the Treasury Office of the State of Goiás considers as improperly calculated | ICMS | 2016-2020 | R$48.0 million (approximately $9.6)
(a) During the fourth quarter of fiscal 2023, the ICMS assessment received in March 2018 had an unfavorable decision at administrative instance. The Company paid the R$1.1 million (approximately $0.2) penalty in August 2023 and the case closed. The Company does not believe the outcome of this decision will weigh on other pending cases as the case factors for other open ICMS assessments are different.
The Minas Gerais State tax ICMS assessment received in November 2020 is currently at the judicial process. For the Goiás State tax ICMS assessment received in August 2020, the Company has in parallel a judicial case about an additional claim for fees over the tax incentive, for which the Company received an unfavorable ruling and has filed an appeal. In the first quarter of fiscal 2024, the Company filed a motion for clarification as a step before potentially appealing to a Brazilian higher court, which was denied. In December 2023, the Company filed appeals to be remitted to the Special and Supreme Brazilian Courts and, in parallel, filed a motion to grant the suspension of the state's ability to collect the above tax incentives to the Goiás State Court. In January 2024, the motion to grant the suspension of the state's ability to collect the above tax incentives was dismissed. The case is currently awaiting judgment at the Special and Supreme Brazilian Courts. All other cases are currently in the administrative process. The Company expects that cases may move from the administrative to the judicial process, although the exact timing is uncertain. For cases in the judicial process, the Company will be required to make a judicial deposit or enter into a surety bond for the disputed tax assessment, interest and penalties. The judicial process in Brazil is likely to take a number of years to conclude. The Company is seeking favorable judicial and administrative decisions on the tax enforcement actions filed by the tax authorities for these assessments. The Company believes it has meritorious defenses and it has not recognized a loss for these assessments as the Company does not believe a loss is probable. Due to the fiscal environment in Brazil, the possibility of further tax assessments related to the same or similar matters cannot be ruled out.

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