Tax regulations

New tax regulations applicable to the mining sector | Denton

The National Executive has recently adopted Decree No. 308/22 and General Resolution No. 5205/22. These regulations apply to export duties and the fiscal stability assistance policy applying to the mining sector.

  1. Decree No. 308/22. Export duties applicable to new copper projects

National Decree No. 308/22 published in the Official Gazette on June 14, 2022 establishes a progressive and optional policy on export duties applicable to new copper projects.

According to this policy, companies developing new copper projects can choose either: (i) to maintain the current fixed rate calculated at 4.5%, or (ii) to join a variable regime whose rates could vary from 0 % to 8% depending on the international price of copper.

In addition, the decree creates the “Optional register of copper exports” (Registro Optativo de Exportaciones), which comes under the Federal Secretariat for Mines. Companies that invest in new copper projects, in accordance with the terms and conditions set out in the supplementary regulation, which adhere to the new variable policy must be registered in this register. Once registered, companies will continue under this regime for a period of 30 years from the date of registration.

  1. General resolution 5205/22

General Ordinance 5205/2022, issued jointly by the Federal Tax Authority and the Federal Secretariat for Mines (the “Resolution”), published in the Official Gazette of June 8, 2022, made some changes to the procedure governing the accreditation and/or reimbursement of the amounts resulting from the tax benefit established in the Mining Investment Law No. 24.196.

The resolution provides that beneficiaries must submit a single application form to request credits or refunds, regardless of the number of mining projects benefiting from fiscal stability and relating to each past fiscal year.

This application form must be submitted to the Undersecretariat for Mining Development, which is part of the Federal Secretariat of Mines, and must include the following documents:

  • Evidence of increased tax burden, providing a clear explanation of the reasons for such an increase.
  • A sworn statement stating that the company has not benefited from any other tax policy and has not sought approval, restitution or transfer of amounts considered in application forms submitted under other laws or tax regulations other than Law No. 24.196 on mining investment.
  • Documentation proving the increase in the total tax burden in the national jurisdiction.
  • A report produced by an independent chartered accountant. This report must be produced in accordance with Section V of Technical Resolution No. 37 issued by the Argentine Federation of Professional Councils in Economic Sciences (or “FACPCE” for its Spanish acronym). The accountant’s signature must be certified by the professional board.

The professional council must also render a decision on the existence, legality and reasonableness of the amount requested for its approval or reimbursement.

  • Any other relevant information and/or documentation that the taxpayer may deem appropriate.

If the Undersecretariat of Mines accepts the request, it must grant express approval and send the electronic file to the Federal Tax Authority (the “AFIP”) including all the information and/or documents submitted by the beneficiary as well as the authenticated copy of the tax stability certificate issued in accordance with Article 10 of Law No. 24.196 as amended by the complementary regulation.

The Federal Tax Authority will approve the application if beneficiaries:

  • Settle foreign currencies in accordance with exchange regulations (Decree 609 and its amendments).
  • Submit tax affidavits (material and informative documents) for the state of the statute of limitations.
  • Maintain registration in the Tax Registry of Mining Companies (“Registro Fiscal de Empresas Mineras” for its Spanish acronym), including updated entity information.

Once the refund has been approved by the federal tax authorities, the beneficiary can use the credit for:

  • Pay outstanding domestic tax debts, including those related to the entity’s obligation to act as a withholding agent.
  • Pay the social security contributions linked to the beneficiary’s obligations as an employer and the sums withheld from employees.
  • Request reimbursement of the amount resulting from this tax benefit.