Chilean President Sebastian Piñera
signed a new system of mining royalty
taxation into law on October 15, 2010.
The law sets a variable 4% to 9% tax,
based on operating margins, for mining
companies currently enjoying tax stability.
The current tax is in the range of 4%
to 5%. Companies currently enjoying tax
stability can voluntarily adopt the new
system until 2012, with the proceeds
going toward reconstruction of damage
caused by the major earthquake that hit
Chile in February 2010. They would
return to the current system from 2013
to 2017, during which time those with
tax stability would pay a fixed 4% rate,
while new projects would pay a fixed 5%.
Mining companies had 60 days from
October 15 to decide whether to go
along with the voluntary proposal.
Starting in 2018, all companies will be
under the new system, paying a 5% to
14% tax based on operating margins,
with stability until 2023.
As featured in Womp 2010 Vol 09 - www.womp-int.com