Global Tax Reforms Proceeding with Major Mining Implications

The OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting is proposing a two-pillar approach to international taxation. While Pillar One's 'Amount A' excludes extractive industries, 'Amount B' lacks a mining carve-out, potentially misallocating returns to marketing activities. Pillar Two (GloBE) introduces a minimum effective tax rate to curb profit shifting to tax havens, but its revenue distribution favors headquarters countries and its accounting rules may conflict with the depreciation cycles of mining projects. The document urges resource-rich governments to coordinate their positions to protect their right to tax natural resources.

• Pillar One's 'Amount A' correctly excludes the mining and petroleum sectors from the new taxing right for market countries because minerals are generic goods whose value is not primarily driven by marketing.
• Pillar One's 'Amount B' currently lacks a carve-out for mining, which the author argues is inappropriate because marketing plays a limited role in the sale of mineral products and generates little value through intangibles.
• The 'Tax Certainty' (formerly Amount C) process may undermine national sovereignty by expanding mandatory binding dispute resolution to all transfer pricing and permanent establishment adjustments, moving these disputes outside domestic law.
• Pillar Two (GloBE) aims to reduce profit shifting to tax havens via a minimum effective tax rate, but it may disadvantage developing countries because the EUR 750 million revenue threshold excludes smaller companies and the rules favor the jurisdictions where companies are headquartered.
• Pillar Two's method for calculating effective tax rates may conflict with local mining tax rules that allow faster depreciation of exploration and development expenses, potentially forcing mines to pay taxes to foreign jurisdictions during cost-recovery periods.

APA

Lassourd,, A. R. (2021). Global Tax Reforms Proceeding with Major Mining Implications. International Institute for Sustainable Development. https://www.iisd.org/articles/policy-analysis/global-tax-reforms-proceeding-major-mining-implications

Chicago

Lassourd,, Alexandra Readhead,Thomas. Global Tax Reforms Proceeding with Major Mining Implications. International Institute for Sustainable Development, 2021. https://www.iisd.org/articles/policy-analysis/global-tax-reforms-proceeding-major-mining-implications.

Wikipedia

{{cite report |last1=Lassourd, |first1=Alexandra Readhead,Thomas |title=Global Tax Reforms Proceeding with Major Mining Implications |publisher=International Institute for Sustainable Development |date=12 January 2021 |url=https://www.iisd.org/articles/policy-analysis/global-tax-reforms-proceeding-major-mining-implications |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{lassourd2021global, author = {Lassourd,, Alexandra Readhead,Thomas}, title = {{Global Tax Reforms Proceeding with Major Mining Implications}}, institution = {International Institute for Sustainable Development}, year = {2021}, month = jan, url = {https://www.iisd.org/articles/policy-analysis/global-tax-reforms-proceeding-major-mining-implications}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }