Tax on extraction of certain minerals
Tax on extraction of certain minerals
Introduction
Tax on extraction of certain minerals is levied in Poland since 18 April 2012 when the Act of 2 March 2012 on Tax on Extraction of Certain Minerals entered into force. The tax constitutes a state budget income and is collected by the National Revenue Administration.
The tax on extraction of certain minerals has been initially levied on the extraction of copper and silver. Then from 1 January 2016 - due to the amendments introduced by the Act of 25 July 2014 on a special hydrocarbon tax to the Act on tax on extraction of certain minerals - this tax encompasses also the extraction of natural gas and crude oil. The tax on the extraction of natural gas and crude oil will be collected from 1 January 2020, but from the beginning of 2016 the taxpayers are obliged to fulfil the measurement and keeping records obligations as well as obligations associated with the submission of tax returns.
Subject of taxation
The extraction of copper, silver, natural gas, crude oil is subject to taxation.
Taxpayer
The taxpayer is a natural person, legal person or an organizational unit without legal personality, including a partnership where shareholders obtained the concession on the basis of the Act of 9 June 2011 - Geological and Mining Law, extracting in course of business activity: copper, silver, natural gas or crude oil.
Tax liability As far as the extraction of copper and silver is concerned, the tax liability arises on the date of production of concentrate from the extracted copper ore. If the taxpayer does not produce concentrate from the extracted copper ore, the tax liability arises on the day of the extraction of copper ore.
As far as the extraction of natural gas or crude oil is concerned, the tax liability arises when natural gas or crude oils is introduced into transmission network or into distribution network or when the natural gas or crude oils is loaded onto other means of transport.
Tax base and tax rate
a) with respect to copper and silver
The tax base is the amount of copper and silver contained in the produced concentrate. If the taxpayer does not produce concentrate from extracted copper ore, the tax base is the amount of copper and silver contained in the copper ore. The tax rates are set separately for one tone of copper and for one kilogram of silver. The tax rates are calculated per month on the basis of an average market price of copper and silver on stock exchanges in London and an average exchange rate of US dollar (USD) to Polish zloty (PLN).
b) with respect to natural gas and crude oil
The tax base in the field of natural gas or crude oil is the value of extracted natural gas or crude oil. The percentage tax rates are set both for natural gas and crude oil and are calculated from the values of extracted natural gas or crude oil. The value of extracted natural gas or crude oil is the product of the amount of extracted mineral and its average price. The average price of natural gas is determined per each month on the basis of the average daily market price on the Polish Power Exchange S.A. The average price of crude oil is determined per each month on the basis of the average daily price of crude oil set by the Organization of the Petroleum Exporting Countries (OPEC) and an average exchange rate of US dollar (USD) to Polish zloty (PLN). The level of tax rates of natural gas and crude oil depends on the type of deposits resulting from its properties i.e. due to its permeability and porosity. The extraction of natural gas and crude oil from wells with low productivity is exempt from taxation.
Tax authorities
The competent authorities for copper and silver are Head of Fiscal Office in Legnica and Director of Fiscal Administration Chamber in Wroclaw, while for natural gas and crude oil, competence of heads of Fiscal Offices and directors of Fiscal Administration Chambers is determined according to the address of taxpayers' seats.
Tax return and terms of payment
The taxpayer is obliged to submit monthly tax return to the competent head of fiscal office and pay tax to the account of the Fiscal Office in Nowy Targ no later than the 25th day of the month following the month in which the tax liability arose.
Starting from1 January 2016, tax returns should be submitted electronically. The model of tax return is defined in the Regulation of the Minister of Development and Finance of 17 February 2017 amending regulation on the model of tax returns for the tax on extraction of certain minerals.
Measurement of minerals
a) with respect to copper and silver
The taxpayer is obliged to measure the amount of extracted minerals and keep the appropriate records. The measurements of the amount of extracted copper are made daily and those of silver are made monthly (based on daily samples).With effect from 1 November 2014, measuring obligation encompasses also copper ore transferred for research purposes (including copper ore subject to processing before transferring for research purposes).
b) with respect to natural gas and crude oil
The taxpayer is obliged to measure, using measuring devices, the amount (respectively) of natural gas or crude oil which were introduced in a given month into the transmission network or into the distribution network or loaded onto another means of transport.
The measuring obligation applies also to natural gas and crude oil transferred in a given month for research purposes, as well to those extracted from appraisal or extraction drilling.
Measurements shall be made at the time of the introduction of natural gas or crude oil into the network or at the time of their loading onto other means of transport.