This paper compares and evaluates the impact of income tax and value-added tax on the decision to explore for minerals or to develop a mine in four countries: Australia, Papua New Guinea, Argentina and Indonesia. Three aspects are considered in depth: - domestic tax rules applicable to mining projects; - taxation of foreign mining investment and foreign providers of expertise; - taxation of project finance (other than equity) from foreign sources._x000D_
Specific tax issues discussed include tax deductibility of various costs, treatment of tax losses, special tax incentives, comparative treatment of various corporate structures, non-resident withholding taxes, and tax costs of various forms of project finance. The paper also illustrates the comparative impact of income tax on rates of return by means of a simulation of a mining project in each of the four countries. The simulation demonstrates why the highest rate of return may be obtained in Argentina and the lowest in Australia._x000D_
Relevant features of the income tax systems in each country (at 15 February 1990) are summarized and compared in several tables annexed to the naner.