Chile: Congress approves bill on new mining royalty

New regulatory tax framework for the mining industry

New regulatory tax framework for the mining industry

The Chilean Congress on 17 May 2023 approved the mining royalty bill, which will become law in Chile following its enactment and publication in the official gazette.

The new mining royalty replaces the current tax system and the mining specific tax (MST) applicable on mining income, creating a new regulatory tax framework for the mining industry that includes a hybrid tax of two components:

  • An ad valorem tax applicable on annual sales of large copper mining exploiters
  • A tax applicable on the mining margin

The new provisions set a limit or total potential tax burden for mining activity, according to which the total effective taxation on the mining industry (including the first category tax, final taxes, and mining royalty) cannot exceed of 46.5% of the taxable adjusted mining operational income (TAMOI).

There is also a new obligation of all taxpayers subject to the new mining royalty to quarterly inform their audited financial statements.

The new provisions would become effective from 1 January 2024. Those taxpayers that currently benefits from a tax invariability regime would be grandfathered by provisions applicable as of 1 January 2022, until the date in which such invariability expires.

Read a May 2023 report (Spanish and English) [PDF 747 KB] prepared by the KPMG member firm in Chile



The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.