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.
