- This royalty affects large copper mines, which are mines producing over 50,000 metric tons of fine copper per year (TMCF in Spanish).
- It has two components:
(1) Sales: royalty of between 1% and 7% for producers between 50,000 and 200,000 TMCF, and between 1% and 4% for producers over 200,000 TMCF.
(2) Mining margins: royalty of between 2% and 36% of net operating income, when copper prices are between two and six dollars per pound.
A new tax that will replace the current Specific Mining Tax that applies to Mining Operators. It consists of an Ad-Valorem component and a Mining Margin component that varies according to sales and the mineral price.
- Mining Operator: any individual or legal entity that extracts minerals and sells them in any productive state.
- Adjusted Taxable Income from Mining Operations (“RIOMA” in Spanish): the revenue derived directly from the sale of mining products, net of the cost of goods and services required to obtain it and the expenses to produce it, with some adjustments.
- Mining Operating Margin (“MOM“): the ratio from dividing the RIOMA by the taxpayer’s net operating income from mining, multiplied by one hundred.
2. Ad-Valorem component
A tax rate applies to annual copper sales, or their equivalent, as follows:
*Metric Tons of Fine Copper (“TMCF” in Spanish).
3. Mining Margin component
A rate applied to the RIOMA as follows:
- Mining operators with more than 50% of their annual sales derived from copper and exceed the equivalent of 50,000 TMCF.
- If the previous point cannot be applied:
4. Common rules to both components
- The total sales of mining products by any related party to the mining operator must be included, according to Article 8 number 17 of the Tax Code.
- The value of a TMCF and a pound of copper will be the average value of the respective year on the London Metal Exchange.
5. Monthly provisional tax payments
- Mining operators must pay provisional tax instalments based on a percentage of gross revenue received or accrued from mining product sales.
- For the first business year the provisional tax payment will be 0.3%.
6. Tax accrual
Tax shall accrue annually and must be declared and paid within April of the following year.
7. Tax invariability
Taxpayers with tax invariability will be governed by the provisions in effect as of January 1, 2022, until the date that such invariability ends.
However, they may voluntarily choose to waive that invariability.
8. Effective date
The mining royalty will become effective as of January 1, 2024.