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February 1, 2023
2023-5120

Chile postpones increase in the amounts of mining patents

  • On 26 January 2023, Law 21,536 was published in the Official Gazette postponing to 2 January 2024, a series of legal changes applicable to the mining industry.

  • The postponement of the entry into force of this mining regulation would allow the Congress to have more time to correct certain issues identified in the parliamentary discussion and consider the suggestions raised by the different stakeholders of the industry in Chile.

  • It is expected that additional changes will be discussed and introduced in Chile to determine the amount, period, and characteristics of the new legal and tax framework of mining patents in Chile.

On 26 January 2023, Law 21,536 was published in the Official Gazette postponing to 2 January 2024, a series of legal changes applicable to the mining industry that were introduced by Law No. 21,420 (for background, see EY Global Tax Alert, Chile enacts tax reform to fund pension reform, dated 7 February 2022). The foregoing, through the modification of the first paragraph of article transitory tenth of Law No. 21,420 that initially established its entry into force as of 4 February 2023.

The approved modifications change the entry into force of Law No. 21,420 from 4 February 2023 to 1 January 2024. These modifications, among others, seek to change the coordinates of the geodetic reference system in Chile (also called as “SIRGAS”); include new reporting obligations that mining concessionaires must comply with; eliminates the possibility of extending the current term of granted exploration concessions (i.e., two years that could be renewed in two additional years) and increase the term in which exploration concessions can be granted (from two to four years).

It is important to note that one of the changes that is also postponed corresponds to the increase in the amounts of mining patents for the exploration and exploitation covered by the Chilean Mining Code. This implies that with the approval of this rule, the payment of the patent will not be increased from 4 February 2023, as planned, but from 1 January 2024.

However, and as has been publicly recognized, the postponement of the entry into force of this mining regulation would allow the Congress to have more time to correct certain issues identified in the parliamentary discussion and consider the suggestions raised by the different stakeholders of the industry in Chile.

It is expected that additional changes will be discussed and introduced in Chile to determine the amount, period, and characteristics of the new legal and tax framework of mining patents in Chile.

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For additional information with respect to this Alert, please contact the following:

EY Chile, Santiago

Ernst & Young LLP (United States), Latin American Business Center, New York

Ernst & Young LLP (United Kingdom), Latin American Business Center, London

Ernst & Young Tax Co., Latin American Business Center, Japan & Asia Pacific

 
 

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