For many resource-rich developing countries, mineral resources present a significant economic opportunity to increase government revenue. Tax base erosion and profit shifting (BEPS), combined with gaps in the capabilities of tax authorities in developing countries, threaten this prospect. The Organisation for Economic Co-operation and Development’s Centre for Tax Policy and Administration is collaborating with the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF) to address some of the challenges developing countries face in raising revenue from their mining sectors. Under this partnership, a series of practice notes and tools are being developed for governments.
Three practice notes have now been finalized. In addition, interested parties were invited to provide comments on preliminary versions of these reports and are now publishing the public comments submitted. The OECD and IGF appreciate all feedback received.
Limiting the Impact of Excessive Interest Deductions on Mining Revenue: Building on BEPS Action 4, this practice note guides government policy-makers on how to strengthen their defenses against excessive interest deductions in the mining sector.
Tax Incentives in Mining: Minimising Risks to Revenue: Supplementing wider tax incentive work undertaken by the Platform for Collaboration on Tax, this practice note focuses on the use of tax incentives in mining specifically, examining the tax base erosion risks they can pose.
Monitoring the Value of Mineral Exports: Policy Options for Governments: Ensuring appropriate pricing of minerals relies on high-quality, accurate testing facilities and controls. This practice note helps governments choose the appropriate policy option for monitoring the value of mineral exports, considering the type of mineral, the risk of undervaluation, existing government capacities and available budget.
About the OECD/IGF co-operation
The IGF and OECD Centre for Tax Policy and Administration have formed a partnership, combining the IGF’s mining expertise with the OECD’s knowledge of taxation to design sector-specific guidance on some of the most pressing base erosion challenges facing resource-rich developing countries.
This guidance reflects a broad consensus between the OECD Centre for Tax Policy and Administration Secretariat and the IGF, but should not be regarded as the officially endorsed view of either organization or of their member countries.
Further information on the work of both organizations is available at:
• OECD: www.oecd.org/tax/beps
• IGF: http://igfmining.org/tax-avoidance-guidance-document