The Ministry of Finance and Economy released Prakas No. 175 on the Taxation of Mineral Resource Operations on March 20, 2024. The old Prakas No. 453 on the Guidelines for the Implementation of the Tax on Mineral Operations is intended to be replaced by this one. Apart from minor alterations in terminology and references to conform to the new Tax Law, there are, in general, no noteworthy modifications.

Main points of Prakas

• Rather than referring to every significant phrase in the law as stated in the previous Prakas, the definitions of key terms are now included in the new Prakas.
• Both the excess income tax rate and the 30% income tax rate are still in place.
• For interest deductions for mineral resource businesses, thin capitalization is still preferred above the conventional earnings stripping approach.
• Apart from financial institutions like banks, life insurers, and oil and gas companies, another industry where provisions are tax deductible is mineral resource operations, provided that the regulator approves the Site Rehabilitation Cost Reserve.
• Unlike the previous Prakas, which only permitted loss carry-forward for five years, the new Law on Taxation allows it for ten years.