What Is at Stake for the Mining Sector in the Global Digital Tax Reforms?

The paper analyzes how the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) proposals—specifically Pillar 1 and Pillar 2—could affect the mining industry. It argues for the exclusion of the entire mining value chain from Pillar 1's 'Amount A' to protect the taxing rights of resource-rich countries and expresses concern that 'Amount B' and 'Amount C' could legitimize offshore marketing hubs and shift profits away from source countries. Regarding Pillar 2 (Global Anti-Base Erosion), the author supports a minimum tax to reduce costly tax competition but emphasizes that the rate must align with the mining sector's typically higher statutory rates (25% to 35%) and that mineral royalties should be excluded from the minimum effective rate calculation.

• The mining sector and its entire value chain, including smelters, refineries, traders, and companies selling consumer-facing products like petrol or diamonds, should be excluded from Pillar 1's 'Amount A' to ensure taxing rights remain in resource-rich countries.
• Pillar 1's 'Amount B' and 'Amount C' could negatively impact resource-rich countries by reducing their tax base and potentially legitimizing the use of offshore marketing hubs, which are often used for profit shifting.
• The author supports a global minimum tax under Pillar 2 to curtail tax competition, provided it accounts for mining-specific realities such as long lead times to production.
• For a global minimum tax to effectively change taxpayer behavior in the mining sector, the rate must be aligned with the sector's typical statutory tax rates, which generally range between 25% and 35%.
• There is a conflict regarding the sequencing of Pillar 2 rules; developing countries, represented by voices like ATAF, prefer the 'undertaxed payment rule' to take priority over the 'income inclusion rule' to better collect revenue from undertaxed foreign income.
• The document recommends that mineral royalties be excluded from the calculation of the minimum effective tax rate under Pillar 2, as they serve as compensation for the right to extract non-renewable resources.

APA

Lassourd,, A. R. (2020). What Is at Stake for the Mining Sector in the Global Digital Tax Reforms? International Institute for Sustainable Development. https://www.iisd.org/articles/policy-analysis/what-stake-mining-sector-global-digital-tax-reforms

Chicago

Lassourd,, Alexandra Readhead,Thomas. What Is at Stake for the Mining Sector in the Global Digital Tax Reforms? International Institute for Sustainable Development, 2020. https://www.iisd.org/articles/policy-analysis/what-stake-mining-sector-global-digital-tax-reforms.

Wikipedia

{{cite report |last1=Lassourd, |first1=Alexandra Readhead,Thomas |title=What Is at Stake for the Mining Sector in the Global Digital Tax Reforms? |publisher=International Institute for Sustainable Development |date=12 March 2020 |url=https://www.iisd.org/articles/policy-analysis/what-stake-mining-sector-global-digital-tax-reforms |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{lassourd2020what, author = {Lassourd,, Alexandra Readhead,Thomas}, title = {{What Is at Stake for the Mining Sector in the Global Digital Tax Reforms?}}, institution = {International Institute for Sustainable Development}, year = {2020}, month = mar, url = {https://www.iisd.org/articles/policy-analysis/what-stake-mining-sector-global-digital-tax-reforms}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }