Mining 2025

PORTUGAL Law and Practice Contributed by: Manuel Protásio and Catarina Coimbra, VdA

4. Taxation of Mining and Exploration 4.1 Mining and Exploration Duties, Royalties and Taxes Taxes Companies carrying out exploration and mining activities in Portugal will be subject to the gen - eral provisions provided in the Corporate Income Tax Code. However, pursuant to the Company Tax Code, the provisions made retained against the costs in connection with the environmental damage of the mining site are tax deductible. Royalties Financial contributions are required for prior assessment, prospecting, research, and experi - mental exploration activities. These contribu - tions will be annual, and based on the initially allocated area, with potential premiums for securing an exploitation concession. For mineral deposit exploitation, the payment of annual royalties will be set contractually, usually at a minimum of 3% of the ore’s value at the mine’s gate. Calculations can be based on inter - national market quotations, reference prices set by the DGEG, or total sales values, with deduc - tions allowed for up to 5% for costs related to treatment, processing, storage, and transporta - tion. This percentage may be reduced to 2% under specific conditions involving domestic industrial processing of the ore. However, any significant change in these conditions reverts the financial contribution to the original 3% criterion. Where several mineral deposits are being exploited simultaneously in the same conces - sion, the value of the royalties will be the sum

of the values individually determined for each mineral deposit. No royalties will be due if the concessionaire’s taxable income for the previous year is 150% lower than the amount of the due royalties. A portion of royalties, typically between one- third to half, must be paid to the municipalities where the resource is located, with the remain - der being state revenue to be allocated to the Geological Resources Fund ( Fundo dos Recur- sos Geológicos ). In cases involving multiple municipalities, pay - ments must be proportionally allocated. Finally, licensing fees, royalties, premia and other considerations are usually negotiated and estab - lished in concession agreements on a case-by- case basis. 4.2 Tax Incentives for Mining Investors and Projects In Portugal, mining activities are subject to the general tax provisions, meaning that there are no specific tax incentives for mining investors or projects. Furthermore, stabilisation agreements, either in tax or any other matters, are not com - monly offered. 4.3 Transfer Tax and Capital Gains on the Sale of Mining Projects The tax system in Portugal imposes transfer and capital gains taxes on the transfer or sale of a mining project. However, there is no specific tax exclusively for the transfer of mining projects. When a mining project is sold, any capital gains realised are subject to taxation. For companies, these gains are included in taxable income and taxed at the standard corporate tax rate, while, for individuals, capital gains tax rates may vary.

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