On April 18, 2018 the Centre for Tax Policy and Administration Secretariat of the OECD in cooperation with the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF) released a draft practice note titled: “Limiting the impact of excessive interest deductions on mining revenues” for consultation. The practice note has been prepared as part of a wider effort to address some of the challenges developing countries are facing in raising revenue from their mining sectors.


The OECD and the IGF invite interested stakeholders to provide comments on the draft practice note. Comments can be submitted until May 18, 2018. Comments can be submitted per e-mail to This email address is being protected from spambots. You need JavaScript enabled to view it..


Subjects discussed in the draft practice note include:

·   Introduction

o  Domestic resource mobilisation in developing countries

·   Mining Businesses and the Use of Debt Financing

o  Introductory Briefing: The Capital Intensive Nature of Mining

o  Financing sources

o  Company financing decisions and access to external capital

o  Financing decisions within MNEs

·   Challenges Faced by Developing Countries

o  Introductory Briefing: Base Erosion Using Interest Deductions

o  Current issues for developing countries

§   Case Study 1 – Debt “Push Down”

§   Case Study 2 – Loan Terms Contingent on Host Country Tax Law

§   Case Study 3 – Interest Rate Mark-Ups

§   Case Study 4 – Use of Hybrid Instruments

§   Case Study 5 – Asset Purchases That Embed Financing

·   Interest Limitation Rules Including BEPS Action 4

o  Introductory Briefing

o  Initial Policy Considerations

o  BEPS Action 4 on Interest Deductions

o  Implementing Action 4

o  Other measures to regulate the use of interest

o  Supporting provisions and arrangements

·   Conclusions and Best Practices


Click here to be forwarded to the draft practice note titled: “Limiting the impact of excessive interest deductions on mining revenues” as released on April 18, 2018 by the OECD and the IGF.



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