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Base Erosion and Profit Shifting in Mining

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Developing countries’ revenue losses from tax base erosion and profit shifting (BEPS) is USD 200 billion annually, across all sectors. With a long list of Sustainable Development Goals (SDGs) to finance, it is more important than ever that resource-rich developing country governments ensure existing and future mining projects contribute their full share to government budgets.

This is why the Intergovernmental Forum on Mining, Mineras, Metals, and Sustainable Development (IGF) has partnered with the Organisation for Economic Co-operation and Development (OECD) Centre for Tax Policy and Administration to deliver the BEPS in Mining Program. Combining their respective mining and tax expertise, the IGF and OECD will equip resource-rich developing country governments with the knowledge, skills and tools to build and administer robust mining tax systems.

The IGF and OECD also offer a range of implementation support for governments, including:

  • Training and capacity building
  • Legal and policy advisory services
  • Experienced tax auditors to assist with mining tax audits via the OECD-UNDP Tax Inspectors Without Borders

Building on global efforts to combat corporate tax avoidance, the IGF­­–OECD BEPS in Mining Program aims to provide sector-specific solutions to some of the most pressing base erosion challenges facing resource-rich developing countries.

Some of these challenges include:

  • Excessive interest deductions
  • Transfer mispricing
  • Undervaluation of mineral exports
  • Tax incentives
  • Tax stabilization
  • International tax treaties
  • Indirect transfer of mining assets
  • Metals streaming
  • Abusive hedging arrangements; and
  • Inadequate ring-fencing.

The program has funding from the UK Department for International Development (DFID), Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH (GIZ), the Canadian government, and the Australian government.