The Internal Revenue Service (SRI) has issued resolution number NAC-DGERCGC24-00000028 of July 31, 2024, amending the general rules for withholding at source by the taxpayer (self-withholding), in the commercialization of concentrates or metal elements and in the production and commercialization of mineral substances that come from a mining concession,  contained in resolution number NAC-DGERCGC16-00000217[1] (the “Resolution“).

Article 1 is replaced, which establishes the scope of application of the Resolution. It includes “the production and commercialization of mineral substances that come from a mining concession” and provides that the rules of the Resolution “will not be applicable to companies considered as Large Taxpayers.”

Article 2 is also replaced. It indicates the conditions for the withholding at source of income tax regulated through the Resolution. The reference to the exception “of own production of small, medium or large mining concessionaires” is eliminated and the following is added: “for such exports it is required: a) to be the holder of mining concessions”.

Article 3 is also replaced. As for the quantity, it is provided that the ounces, pounds and dry tons will be verified with the proof of sale. As for the content for concentrates, it is indicated that it corresponds to the content of the main and/or secondary mineral expressed in quantity, modifying that the percentage would be applicable. For the price of concentrates or metallic elements, it is provided that for gold and non-ferrous metals, the simple average of international AM/PM prices will be taken from the U.S dollar settlement published in the London Bullion Market Association. In the case of copper, it will be the official price for grade A copper expressed in U.S. dollars published on the London Metal Exchange. For silver it will be the U.S. dollar peg published by the London Bullion Market Association. All prices will be those on the date of submission of the original withholding tax return.

Article 3 also provides that the price and date of quotation applied by the taxpayer for the calculation of the withholding must be detailed in the invoice on which said withholding is made. Also, with respect to the basis of the withholding, it is indicated that the penalties and the charges for treatment and refining must be subtracted in the cases that apply.

Finally, Article 4 is also replaced, in which the percentages of withholding at source of income tax payable by the taxpayer are modified. It will be 1% for holders of mining concessions under the small-scale mining regime and when they are up to date with their tax obligations and have updated their tax ID (“RUC”). It will be 3% when the holder of a mining concession is under the medium-sized mining regime and is up to date with their tax obligations and the RUC is updated. It will be 7% for large-scale mining and the concessionaires are up to date with their tax obligations and the RUC is updated.

Article 4 also modifies the percentages for commercialization license holders. It will be 2% for holders of commercialization licenses up to date with their tax obligations and have updated the RUC, in addition the withholding must apply to exports of minerals from mining concessions with whose concessionaires a mining operation contract has been signed, is in force and is filed in the Mining Registry. It will be 4% for holders of commercialization licenses up to date with their tax obligations and updated the RUC, when there are no operating contracts with the mining concessionaires who provide the minerals.

It is provided that in the sales invoices in the description or additional detail, the holders of commercialization licenses and mining concessions must include information on the content of the main and secondary mineral, the percentage payable, the sale price and date of quotation of the concentrate and/or metal element, and the number of the corresponding customs declaration of the export. In addition, they must inform the Mining Regulation and Control Agency of the change of address in their RUC. In addition, it is established that this agency will share the information of the mining cadastre with the SRI for control purposes.

For more information, please do not hesitate to contact us.

This bulletin contains a summary of legal developments of interest, and therefore cannot be considered as provided advice. If you have any questions, please contact the AVL Abogados team.

[1] This resolution was published in the Second Supplement of the Official Gazette No. 765 of May 31, 2016, as amended by Resolution No. NAC-DGERCGC18-00000106 published in the Official Register Supplement No. 202 of March 16, 2018.