Ecuador mining article … maybe already posted4 Jan 2024 22:28
QUITO, DEC 29, 2023 (Agencia Ane)._ The Organic Law of Economic Efficiency and Employment Generation expressly prohibits the public-private alliance regime from being applicable to the extractive mining and oil industry and provides that companies dedicated to the extraction and commercialization of gold, copper and other minerals carry out self-withholding of up to 10% of the gross amount of each income tax transaction.
This Law, which was proposed as an economic emergency by President Daniel Noboa and unanimously approved by the National Assembly, has been in force since the 20th and now the government is working on its regulation.
According to private mining companies, the changes introduced affect the regime of the mining industry. These effects are:
Article 3 expressly prohibits the Public Private Partnership regime from being applicable to the extractive mining and oil industry.
Article 97 of the Internal Tax Regime Law is reformed by including the obligation of mining companies that market minerals must make a self-withholding of up to 10% of the gross amount of each transaction, in the manner determined by the SRI, as income tax. Said withholding will constitute a tax credit.
Article 35 replaces the third paragraph of art. 40 of the Mining Law, which established the obligation that, in contracts for the provision of mining services, 3% of the sales of the minerals exploited under the contract be dedicated to sustainable local development projects, through municipal governments and parish councils and, if applicable, to the government bodies of indigenous communities.
The new rule provides that the distribution of each 3% transfer will be distributed as follows: 45% for the provincial GADs, 35% for the municipal GADs and 20% for the rural parish GADs, belonging to the area of influence of the mining project. . The same article includes the destination that the different GADs must give to the resources obtained, which must be allocated mainly to infrastructure works, roads, irrigation, protection of watersheds, environmental management, promotion of agricultural activities, water treatment, management waste and environmental sanitation in general, physical infrastructure and equipment in general, etc.
Article 36 reforms article 67 of the Mining Law, which provides that the Ministry of Economy must carry out resource transfers directly. This power was exclusive to the Central Bank of Ecuador.
Article 93 of the Mining Law is reformed regarding the payment of mining royalties that from now on must be delivered directly by the Ministry of Economy to the provincial, municipal and parish GADs and to the indigenous communities, in the same percentages indicated in the case of art. 40 of the Mining Law, that is: 45% for the provincial GADs, 35% for the municipal GADs and 20% for the parish GADs of the area of influence of the project subject to payment of royalties.
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