CHAPTER 7 FINANCIAL AND TAX DEVELOPMENTS AND PROPOSALS AFFECTING NATURAL RESOURCES IN LATIN AMERICA

• Jurisdiction: United States

Mining And Oil & Gas Development In Latin America
(2001)
CHAPTER 7
FINANCIAL AND TAX DEVELOPMENTS AND PROPOSALS AFFECTING NATURAL RESOURCES IN LATIN AMERICA
Pedro Deutsch
PricewaterhouseCoopers
Santiago, Chile

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CHILE

• PROPOSED CHANGES IN LEGISLATION

Current Legislation

[ ] Exploration expenses / Pre-stripping

[ ] Interest expenses

[ ] Depletion

[ ] Development expenses

[ ] Preparation expenses

[ ] Accelerated depreciation

Exploration and Pre-stripping

[ ] Exploration expenses are capitalized

[ ] Overhead in exploration

[ ] Deduction on abandonment

[ ] Treatment as start-up expenses of exploration in successful projects and pre-stripping expenses

Interest Deduction

[ ] During construction.

[ ] Effect on tax prepayments.

[ ] After start-up of commercial production.

Depletion

[ ] On a unit of production basis.

[ ] Cost of extracted mineral.

[ ] Based on acquisition value of the mine.

Preparation Expenses

[ ] Definition

[ ] Treated as cost of extracted mineral

[ ] Timing of deduction

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Accelerated Depreciation

[ ] Definition.

[ ] Only applicable to new assets.

[ ] IRS guidelines on useful lives.

[ ] Option of taxpayer.

[ ] Depreciation and carry forward of losses.

Decree Law 600 and the Tax Regime of Mining

[ ] Article 11 bis.

[ ] Freezing of rules on depreciation, carry forward of losses and start-up...