, Tax law related to mining in Honduras

Tax law related to mining in Honduras

The General Mining Law, approved by Decree No. 238-2012 was published in the Official Gazette on April 2 2013 and since then has been in effect in Honduras. This law supersedes in its entirety the previous law dating from 1998. The bylaws were published on September 4, 2013.

The mentioned law creates the competent authority Honduran Institute of Geology and Mines, identified with the initials “INHGEOMIN” as a decentralized entity of the State under the Presidence of the Republic, with exclusive competence to execute the National Policy of the mining sector in general, with authority to develop programs, projects and plans and create administrative, technical and operational units required.

The law provides what the mining right is, the mining activities authorized in the country, also it defines what prospecting, exploration, exploitation, processing is about.

The law identifies the rights and obligations of the parties, the procedure of a mining concession for each of the permitted activities and how the close or remedial measures must be done in case of suspension of mining activities on a temporary, progressive or permanently basis.

It also states the penalties that may fall to the holders of mining concessions and what the grounds for annulment of the same are as well as it establishes the cause of cancellation of a concessions.

Important to mention is the applicable tax law related to the General Mining Law in Honduras, namely:

1. The provisions of the Law on Income Tax;
2. The provisions of the Sales Tax Act;
3. Tax Net Assets;
4. Fees for services and taxes established in the Law of Municipalities and the Municipal Tax Plan.
5. Security Fee as described in the Seven (7) and eight paragraphs (8)
6. Effective law or Surface (Surface Territorial Canon)
7. The non-metallic mining and industrial character of gems or precious stones, pay two point five percent (2.5%) based on the FOB value or value based on ex-factory or plant as appropriate.
8. The metal mining, including oxides and sulfides which metals are extracted, you pay six percent (6%) on the value of sales or exports.

The taxes established in paragraphs 7 and 8 shall not apply to holders of artisan farms.

Honduras has an impressive potential in mining, not only of nonmetallic minerals as the opal but also of zinc, copper and iron which constitute metallic minerals.

CENTRAL LAW Honduras has a full domain of the Mining Law and the concession procedure as well as experience in filing and following up applications filed before the competent authorities. Its lawyers have specialized in tax law which is applicable to mining activity too.

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