PROTÉGER LES DROITS D'IMPOSITION DES REVENUS MINIERS

The document examines how bilateral tax conventions can lead to significant revenue losses for resource-rich developing countries in the mining sector. It analyzes common pitfalls—such as the use of 'treaty shopping' and narrow definitions of immovable property—and provides specific drafting recommendations. Key strategies include adopting the UN Model over the OECD Model, implementing broader definitions of 'immovable property' in domestic law, and creating specific articles for extractive industries to ensure the right to tax indirect transfers and subcontractors.

• Tax conventions can significantly reduce the revenue resource-rich countries collect from the mining sector, as investors may use these treaties to avoid or reduce taxes, sometimes leading to losses of hundreds of millions of dollars.
• The OECD Model tax convention is designed for developed countries and prioritizes the elimination of double taxation and the reduction of taxation in source countries, whereas the UN and ATAF models provide a better compromise by preserving more taxing rights for the source state.
• Indirect transfers of mining assets—where shares of a foreign company owning a mine are sold abroad—often escape taxation because only 35% of sampled tax conventions include the right to tax such indirect transfers.
• Mining subcontractors often avoid paying taxes in the source state by structuring their activities to stay below the time thresholds required to create a 'permanent establishment' (PE), particularly during short-term exploration phases.
• The 'treaty shopping' phenomenon allows investors to route payments through third-party countries with favorable treaties to avoid withholding taxes; for example, Paladin Energy used a Dutch entity to avoid withholding taxes in Malawi, costing the country 27.5 million USD.
• To protect taxing rights, countries should adopt a broad domestic definition of 'immovable property' that explicitly includes exploration rights, exploitation rights, and payments based on production value.
• The most effective way to secure taxing rights over the entire mining value chain is to negotiate a standalone 'extractive industries article' in the treaty, which can set lower time thresholds for permanent establishment and specific rules for indirect transfers.
• Management and technical service fees are a major source of revenue leakage; the document recommends adopting a specific article for 'fees for technical services' (similar to UN Model Article 12A) to allow taxation on a gross basis without needing to prove a permanent establishment.

APA

Readhead, A., & Taquiri, J. (2022). PROTÉGER LES DROITS D'IMPOSITION DES REVENUS MINIERS. International Institute for Sustainable Development. https://www.iisd.org/system/files/2022-01/protecting-tax-income-mining-countries-fr.pdf

Chicago

Readhead, Alexandra, and Jaqueline Taquiri. PROTÉGER LES DROITS D'IMPOSITION DES REVENUS MINIERS. International Institute for Sustainable Development, 2022. https://www.iisd.org/system/files/2022-01/protecting-tax-income-mining-countries-fr.pdf.

Wikipedia

{{cite report |last1=Readhead |first1=Alexandra |last2=Taquiri |first2=Jaqueline |title=PROTÉGER LES DROITS D'IMPOSITION DES REVENUS MINIERS |publisher=International Institute for Sustainable Development |date=November 2022 |url=https://www.iisd.org/system/files/2022-01/protecting-tax-income-mining-countries-fr.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{readhead2022protger, author = {Readhead, Alexandra and Taquiri, Jaqueline}, title = {{PROTÉGER LES DROITS D'IMPOSITION DES REVENUS MINIERS}}, institution = {International Institute for Sustainable Development}, year = {2022}, month = nov, url = {https://www.iisd.org/system/files/2022-01/protecting-tax-income-mining-countries-fr.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }