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Mining in the Nordic Countries

A comparative review of legislation and taxation

image of Mining in the Nordic Countries

The last few years have seen a lot of activity within the Nordic mining industry. New mines have opened, but there have also been cases of bankruptcies. Heightened activity has in turn led to discussions on the role of legislation and taxation in ensuring that mining contributes to sustainable development. At the same time, a number of voluntary sustainability initiatives have appeared.For historic reasons, the Nordic countries share a lot of similarities with regards to legislation. And not least with regards to environmental laws, the EU has contributed to further harmonisation, even among the non-member states Iceland and Norway. Yet important differences exist. Legal revisions are sometimes the result of much-publicised problems, so experiences in each country plays an important role.An overview of taxation also indicates both similarities and differences.

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Taxation review

Taxation of mining deserves a particular comment. Generally, it is difficult to compare the level of mining taxation in different countries. One common method is to compare levels of corporate tax, royalties, VAT, environmental taxes and so forth, which is also summarised in appendix A. However, the actual amount paid by companies also depends on available tax deductions. Many countries allow companies to carry forward losses, i.e. where losses in one year can be used to offset future taxes. Therefore, in order to give a more correct and comparable assessment of tax level, studies have been done that compare aggregate tax level throughout the lifetime of a standardised model-mine with the same physical properties and same production method, but in different jurisdictions. Currently, there are no such studies available that cover all the Nordic countries. From those that exist, however, it is possible to draw some conclusions, especially considering that the Nordic tax levels, with the possible exception of Greenland, are on a more or less comparable level.

English

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