Large-scale metallic mining companies in the country have been granted up to two months after the close of each quarter to settle their royalty payments under the new fiscal framework, according to the Bureau of Internal Revenue (BIR).
The Marcos administration is implementing the extension to accommodate stricter, project-specific accounting requirements aimed at improving transparency in the extractive sector.
“Large-scale metallic mining contractors and operators shall file the corresponding return and pay the royalty within 60 days after the close of each calendar or fiscal quarter, as applicable,” the BIR said in a revenue memorandum circular (RMC) issued last week.
According to the BIR, these large-scale metallic mining entities will be subject to the Enhanced Fiscal Regime for Large-Scale Metallic Mining Act beginning February this year. Procedure for this fiscal regime was formalized under RMC No. 58-2026.
It bears noting that the rule also requires “ring-fencing,” which demands a granular level of accounting for every mining project.
In cases where a contractor holds multiple mineral or operating agreements, “the quarterly royalty return for each agreement shall be filed and paid separately,” according to the country’s main tax collection agency.
“Each agreement shall be treated as a distinct ring-fenced project for purposes of determining, reporting, and accounting for the corresponding quarterly royalty liability,” the BIR further clarified.
Mining firms are currently instructed to use BIR Form No. 605 for their payments since the government is still finalizing a dedicated tax return specifically for these royalties.
According to the RMC, the payments will be treated as advance compliance with quarterly royalty obligations, pending the filing of the required quarterly royalty return once it becomes available.
This interim process remains “subject to validation, monitoring, reconciliation, and necessary adjustment” once the final forms are issued.
For each ring-fenced project, the royalty due must be calculated using the gross output base, factoring in allowable deductions. Recall that the applicable royalty rates will vary “depending on whether the mining operations are conducted within or outside mineral reservations.”
To ensure transparency, the BIR requires mining firms to keep and submit, when needed, all schedules, computations, and supporting documents to justify royalty payments. This covers records used to compute gross output and claimed deductions.
Under the new regime, mines outside mineral reservations will face a five-tier royalty rate of one percent to five percent, while low-margin mines pay a minimum 0.1-percent royalty on gross output, and all large-scale metallic mines are subject to a five-tier windfall profits tax of one to 10 percent.
It also includes a safeguard limiting tax-deductible borrowing from related parties by enforcing a 2:1 debt-to-equity ratio, known as a thin capitalization rule.
Further, future guidelines will also be issued regarding a bond to secure the payment of the royalty, the BIR said.
It may be recalled that the Department of Finance (DOF) previously said ₱6.3 billion worth of annual revenues from existing mines is expected to be added to the state coffers from enhanced mining rules.