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Dáil Éireann díospóireacht -
Tuesday, 12 Mar 1991

Vol. 406 No. 3

Written Answers. - Mining Activity Tax Liability.

Michael Finucane

Ceist:

125 Mr. Finucane asked the Minister for Finance if he will outline the tax implications for a person who wishes to get involved in a mining activity.

The tax provisions relating to mining activities are both extensive and very detailed and, accordingly, cannot be comprehensively covered in this reply. However, the following is an outline of the principal features:

(i) Section 245 of the Income Tax Act, 1967, provides for a mine development allowance in respect of certain capital expenditure incurred in connection with a mine including, subject to certain exceptions, the expenditure on development of the mine. The mine must be concerned with any scheduled mineral, mineral compound or mineral substance as defined in section 2 of the Minerals Development Act, 1940.

(ii) The Finance (Taxation of Profits of Certain Mines) Act, 1974, provides for tax allowances in respect of expenditure incurred in exploring for scheduled minerals but only where the exploration is done in conjunction with the working of a mine. Scheduled minerals are defined as meaning those in Schedule 13 to the Income Tax Act, 1967.

(iii) Section 39 of the Finance Act, 1990, provides for the deduction of exploration expenditure (incurred on or after 1/4/90) of prospecting companies from any future income of those companies from a trade of working a mine. Exploration company is defined as a company, the business of which for the time being consists primarily of exploring for scheduled minerals.
(iv) Where the person working the mine is a company, the company will be chargeable in the normal way to corporation tax at the rate of 43 per cent (40 per cent from 1/4/91) on its mining profits.
In the case of an unincorporated person working a mine, the individual will be chargeable to income tax in the normal way at the appropriate rate(s) on the excess of his income over his allowable expenses, tax-free allowances and reliefs.
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