BIR rolls out interim filing system for mining royalty
The Bureau of Internal Revenue (BIR) has issued temporary guidelines for the quarterly royalty tax of large-scale metallic mining companies under the government’s new mining fiscal regime.
The issuance is while the release of a dedicated tax return and electronic filing facility is pending.
Under Revenue Memorandum Circular No. 058-2026, the BIR directed affected firms to temporarily use BIR Form No. 0605 for the filing and payment of quarterly royalties.
Taxpayers enrolled in the Electronic Filing and Payment System (eFPS) must file electronically, while non-eFPS taxpayers may file manually.
The BIR said filings and payments made through the form would be treated as “advance or initial compliance” with quarterly royalty obligations. They will remain subject to adjustments once the prescribed royalty return and implementing revenue issuances become available.
Mining contractors and operators are required to file quarterly royalty returns and pay the corresponding royalty within 60 days after the close of each calendar or fiscal quarter.
They must also maintain and preserve supporting schedules, computations and other documents necessary to substantiate royalty payments.
The circular likewise requires separate filing and payment for each mining agreement held by a contractor or operator under the ring-fencing provision of the law.
This means companies holding two or more mineral agreements, financial or technical assistance agreements or operating agreements must separately compute, report and account for royalty liabilities for each project instead of consolidating them.
The quarterly royalty shall be computed based on the gross output base, allowable deductions and the applicable royalty rate.
While the BIR has yet to issue implementing revenue regulations detailing the computation methodology, covered taxpayers were instructed to temporarily follow the provisions under Section 151-A of the National Internal Revenue Code and the implementing rules and regulations (IRR) issued by the Department of Finance (DOF).
Republic Act No. 12253, or the Enhanced Fiscal Regime for Large-Scale Metallic Mining Act, was enacted in September 2025, while its IRR was issued by the DOF in December.
Royalty rates for large-scale metallic mining operations are set at 5 percent for projects located within mineral reservations. Projects outside mineral reservations are subject to a margin-based royalty on income, with rates ranging from 1 percent to 5 percent for profit margins exceeding zero up to 60 percent.
The IRR also imposes a windfall profits tax ranging from 1 percent to 10 percent for profit margins between 30 percent and 75 percent.
