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
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