Chilean Senate approves mining canon project, ready for final vote

The Chilean Senate approved on Wednesday night a bill establishing mining royalties in the world’s largest copper producer.

The initiative will return to Chamber of Deputies for its final vote, in a third legislative process, since it underwent modifications during its time in the Senate.

The decision of the plenary session of senators takes place one day after the Treasury Commission of the Upper House to give the green light to the government project, which establishes a fixed “ad valorem” component of 1% on copper sales and another that depends on the mining operating margin, between 8 and 26%.

The bill also proposes a maximum potential tax rate of 46.5% on the “adjusted mining operational taxable income” for companies that produce more than 80,000 tons of fine copper per year and 45.5% for those that produce between 50,000 and 80,000 tons.

As previously explained by the government, the tax ceiling considers the payment of the canon or royalty together with the other taxes applied to the industry, so if the sum of the taxes exceeds the limit, the royalty will be adjusted until reaching the maximum percentage established. In the law.

The initiative is part of a larger change in collection promoted by the government of Gabriel Boric to partly finance his campaign promises and which suffered a setback at the beginning of April with the rejection of a tax reform framework law.