REGALIAS MINERAS EN EL PERU
| Jurisdiction | Derecho Internacional |
(Apr 2005)
REGALIAS MINERAS EN EL PERU
Barrios, Fuentes, Urquiaga Abogados
Lima, Per§
Abogado perteneciente al Estudio Jur´cmb;idico BARRIOS, FUENTES, URQUIAGA ABOGADOS, de Lima, Per´cmb;u. Sus principales ´cmb;areas laborales son el derecho minero, el derecho corporativo y el derecho civil. Se ha desempe&tildecmb;nado como asesor del Ministerio de Energ´cmb;ia y Minas en temas referentes a miner´cmb;ia. Ha sido asesor legal y coordinador general de los Comit´cmb;es de Petr´cmb;oleo (sectores Upstream y Downstream) y de Asuntos Tributarios de la Sociedad Nacional de Miner´cmb;ia, Petr´cmb;oleo y Energ´cmb;ia. De igual modo se ha desempe&tildecmb;nado como miembro del Grupo de Redacci´cmb;on del Proyecto del nuevo Texto ´cmb;Unico Ordenado de la Ley General de Miner´cmb;ia.
Juan Jos´cmb;e Mostajo Scheelje se desempe&tildecmb;na como asesor legal de diversas empresas mineras proporcionando asesor´cmb;ia a entidades productoras, exploradoras y refinadoras en el ´cmb;area de miner´cmb;ia. Adicionalmente ha proporcionado sus servicios a diversas empresas en litigios vinculados a concesiones mineras y temas contractuales; proporcionando a su vez asesoramiento en materias de negociaci´cmb;on para la adquisici´cmb;on de propiedades mineras, fusiones y transacciones en general vinculadas a las actividades minera y energ´cmb;etica.
Lawyer with the law firm BARRIOS, FUENTES, URQUIAGA ABOGADOS, in Lima, Peru. He has majored in mining law, corporate law and civil law. He has been counsel to the Ministry of Energy and Mines in mining issues. He has been legal counsel and general coordinator to the Oil (Upstream and Downstream sectors) and Tax Affairs Committees of the National Society of Mining, Oil and Energy. Moreover, he has been a member of the Editorial Staff for the new Unique Comprised Text of the General Mining Law.
Juan Jos´cmb;e Mostajo Scheelje counsels various mining companies, providing legal advice to production, exploration, and refining entities in the mining sector. Furthermore, he has provided his services to several companies in litigations related to mining concessions and contractual issues, also providing counseling in issues related to negotiations for the acquisition of mining properties, mergers and transactions in general related to mining and energy activities.
Idiomas: Espa&tildecmb;nol e Ingl´cmb;es.
1. Current Scenario:
Law N%go%g 28258 that establishes the Mining Royalty was published on June 24, 2004. This Law entered into effect the next day, June 25, 2004. By Law N%go%g 28323, dated August 10, 2004, Article 8%go%g of the Mining Royalty Law was modified and a Third Final Provision was added.
The Regulations of the Mining Royalty were enacted by Supreme Decree N%go%g 157-2004-EF, published on November 15, 2004. By Supreme Decree N%go%g 018-2005-EF, dated January 29, 2005, said Regulations were modified and supplementary steps were established for the application of the same.
By judgment dated April 1, 2005 of the Constitutional Tribunal it was declared groundless the appeal requesting reversal of a decision that violates the Constitution filed by more than 5,000 citizens against the Peruvian Government in order to declare that Articles 1%go%g, 2%go%g, 3%go%g, 4%go%g and 5%go%g of Law N%go%g 28258 are unconstitutional.
2. Nature of the Mining Royalty:
The Government's revenues may be original and derivative. Original revenues are the ones which compensate the Government for the eventual loss of its reserves of natural resources by individuals, while derivative revenues are based on the exercise of the Government's tax power, by which taxpaying-power economical demonstration of individuals are taxed.
The original revenue is similar to the one generated by a contractual relation. It starts from the basis of an original resource exploited by an individual and has the nature of a consideration, being the submission to them voluntary, in spite of being regulated by Law. An example in our legislation is the granting of the concession title irrevocably in exchange for the payment of a license fee and the fulfillment of obligations that are duly provided for in the Law. Such retribution constitutes an original revenue of the Government on behalf of the Nation as owner of the natural mining resources.
Thus, there is a double domain: The original one in the hands of the Government, which involves the acceptance of the existence of a primeval titleholder and the subsequent granting of the valid, irrefutable and original title to confer the right to explore and extract the mineral commodity from the ground and underground; and the derivative one in the concessionaire subject to the fulfillment of the conditions contained in the Law to admit its conservation. 56
In the case of the derivative revenue, the source of the same is the Law and gives rise to relations of public law, to impose tax burdens on various taxpaying-capacity economical demonstrations or for the support of government activities. Taxes are derivative revenues as long as they depend on individual activities and not on rights granted by the Government to individuals.
There are several definitions of royalties. According to the Dictionary of the Spanish Language, royalty means "The participation in the revenues or fixed amount paid to the owner of a right in exchange for the permit to exercise it". 57
In its simplest and most commonly used forms, the royalty tax liability is calculated based either on a per unit volume or per unit weight basis, or based on the value of the mineral commodity being extracted or sold. In the first instance, the determination of the tax liability is solely dependent on the physical quantity or volume of the material produced but in the second case, the assessment depends on the value to be assigned to the commodity.
Royalty taxes based on a unit of production are one of the oldest types of mining taxes. In its simplest form the tax liability will be calculated based on a prescribed fee per unit weight (US$/tone) or per unit volume (US$/cubic meter). There is a common perception that such taxes are relatively easy to administer because the issue of the value of the mineral does not enter the liability equation. However, this type of calculation is applicable for certain types of mines producing commodities that are fairly homogeneous. Thus, there are limitations to apply such scheme to metallic and polymetallic deposits or to mines that sell the mineral al several stages of recovery.
Unit-based royalty systems fail to differentiate between low and high-value materials, which may result in a substantial loss of potential revenue to the government. On the other hand, one of the clear advantages in using a unit-based tax is that it protects the government from a downturn in the value of the commodity.
The second major category of royalty is the one that defines it as a burden that affects the ratio of the gross value of the mineral extracted or sold. It is the ad valorem (value-based) royalty, which is determined on the production and not on profits. Therefore, it is a "blind" burden that does not take into account margins between production costs and prices likely to be obtained in the market. The amount of government tax revenue generated by an ad valorem type of tax is sensitive to changes in the valuation of the mineral, thus making it a more volatile source of revenue than a unit-based royalty tax.
The idea of royalty emerged at a time when tax and accounting systems were very little developed and it was necessary for nations to obtain revenues no matter how, although no profits were obtained. Modernization of tax systems and the establishment of the Income Tax, which taxes profits, left royalties with no practical grounds. 58
As for doctrine, there are various opinions about the nature of royalties, and the discussion is focused in the fact of whether they are a consideration or a tax.
Article 2%go%g of Law N%go%g 28258 defines mining royalty as a "consideration"; therefore, the mining royalty should not be analyzed under the perspective of a tax, for it has not been established as a tax liability.
While the Law defines mining royalties as a consideration, which would make them qualify as an original revenue of the Government, the payment of them has been imposed by a Law that is applied both in respect of the new titleholders to mining concessions and in respect of those prior to its entry into effect, and therefore, had the irrevocable right to the exploitation of the natural resources granted, as long as they complied with the requisites required by the Unique Comprised Text of the General Mining Law to maintain is force and effect. 59 Accordingly, it is clear that in spite of defining royalties as a consideration, there is no prior consent of the titleholder to the mining concession; thus, it is not a voluntary submission.
In this respect, it must be borne in mind that the Organic Law for the Sustained Exploitation of Natural Resources establishes that every exploitation of natural resources by individuals gives rise to an economic retribution that includes everything that must be contributed to the Government for the natural resource. 60 For the case of the mining concessions, as we will see later on, such retribution in favor of the Government is the license fee as a previous requisite for the granting of the concession and, afterwards, its annual payment to keep the claim in force. 61
Thus, as for mining concession matters, the retribution in favor of the Government is already determined and it is the license fees, being the payment of these fees the only compensation the concessionaire should pay to the Government for all items related to the exploitation of the mining resources. This situation has been modified by the Mining Royalty Law.
The...
To continue reading
Request your trial