-What’s the mining royality?
The mining royality is a series of special tax laws for large mining companies, that aims to promote economic development, fair and efficient collection of tax while increasing local resources by setting the maximum potential tax burden.
Under these tax laws, the tax rate fluctuates depending on the sales and profits of each company and the price of copper. The collected tax will be mainly allocated to state development, technology research, and to each local government where mining activities are conducted as a reward.
This law applies mainly to copper and lithium. In the case of lithium, companies with an annual lithium carbonate production of 50,000 tons or more will be taxed at 3% of their turnover.
(Approved on May 18, 2005, enforced on January 1, 2006.)
The new bill passed in January 2022 decides to combine taxation on sales and profits, and exempts companies with less than 5,000 tons of copper production.
Also, according to the official website of Chilean government, the latest bill of mining royality (for copper) that recently got approved by the parliament can be summarized as below:
The maximum tax burden was set as below, based on the production capacity of each company:
Companies producing 50,000 to 80,000 tons of copper → 45.5% of adjusted mining taxable income
Companies producing 80,000 tons or more of copper → 46.5% of adjusted mining taxable income