MINERAL AND PETROLEUM RESOURCES ROYALTY

What's New?

  • 13 September 2019 - Payment changes
    MPRR Payments can now only be made via eFiling into the SARS account and each payment must be accompanied by a completed return (MPR3). Payments can be made via the eFiling 'Additional Payments' function (also referred to as 'Ad Hoc' payment) to the 'MINR' tax type.

What must a taxpayer do to comply with the eFiling channel requirements?

  • If already using eFiling and making payments via eFiling: 
    • Continue to use ONLY the eFiling process for making MPRR payments
  • If not already using eFiling or not making payments via eFiling:
    • Discontinue making EFT payments through online banking or Over the Counter payments at bank branches process
    • Register for eFiling if not already registered to file other taxes via eFiling
    • Capture and submit your  banking details on eFiling for payments to SARS
    • Provide any requested information to SARS to confirm banking details.
  • 6 September 2019 - The new MPRR form (FV 2019.03.00) has been published on the SARS website and should be used for all submissions going forward. Taxpayers are requested to not use older versions of the MPR3 form. 
  • 18 June 2019 - The MPRR form has been published on the SARS website and should be used for all submissions from 18 June 2019 onwards.

  • 28 January 2019 - Master data system release (RAV01)
    This release includes the registration and subscription of existing MPRR taxpayers on to the new system, as well as the creation of the taxpayer’s account. These steps are dependent on the master data to be cleansed (complete and correct). New Legal Entity registrations and/or new subscriptions for MPRR will be generated via the RAV01 form, which replaces the old MPR1 form. A new MPRR account number (also referred to as the MPRR tax reference number) will be generated and will start with “814….”.

  • 01 October 2018 - Mineral and Petroleum Resource Royalties Return (MPR3)
    SARS rolled out a new form for Mineral and Petroleum Resources Return and Payment advice. The form is available to download from 01 October 2018 and the existing MPRR taxpayers will be expected to complete the new MPRR return and payment data form:
    • The old Mineral and Petroleum Resources Payment advice (MPR2) and Mineral and Petroleum Resources Return (MPR3) have been incorporated into one Mineral and Petroleum Resources Return (MPR3) to declare you must complete the new Return (MPR3).
    • The return MPR3 has been updated with the type of mineral type, unit of measure and volume transferred (quantity) of mineral sold which was previously not included in the MPR3.
    • The MPR3 form has been standardised to cater for all the attributes namely filing, payment and return obligations below:
 
Section of MPR3 Return​ Filing ​Obligation               Payment​ Obligation                              
First 
Estimate​
​First Estimate return must be submitted on or before the end of six (6) months, on or after the start of the year of assessment.
​First payment – 50% of estimated total liability for the year of assessment – payment is due six (6) months on or after start of tax year-end.
Second
Estimate ​
​Second Estimate return must be submitted on or before the end of the year of assessment. ​Second payment – balance of estimated total liability for the year of assessment – payment is due on or before tax year-end.
Return
of Excess
​An optional third top-up return, referred to as the “Return of Excess”, can be used to declare additional liability for the year of assessment, that was not catered for in the first and second estimate returns. To be submitted on or before the end of six (6) months after the end of the year of assessment. ​Optional Top-up Third Payment – Amounts not catered for in first and second estimate for the year of assessment is due on or before six (6) months after the end of the year of assessment.
 
Annual Declaration ​An annual return must be submitted twelve (12) months after the end of the year of assessment for final reconciliation purposes. ​Final liability settlement – last top-up payment is due six (6) months after the end of the year of assessment. Any payments relating to the particular tax year after this date will attract additional interest
 

What is MPRR?

In the past, mineral and petroleum resources were privately owned, meaning that payment for the extraction of these resources was payable to the State only under certain circumstances, e.g. where mining had been conducted on State-owned land.
 
To bring South Africa in line with prevailing international norms, the Department of Minerals and Energy promulgated the Mineral and Petroleum Resources Development Act, 2002 (MPRDA) in terms of which these resources are recognised as the common heritage of all the people of South Africa with the State as custodian thereof for the benefit of all South Africans. 
 
The Minister of Finance must, in terms of section 3(4) of the MPRDA determine and levy the State royalty by means of an Act of Parliament. This the Minister did by promulgating the Mineral and Petroleum Resources Royalty Act, 2008 as well as the Mineral and Petroleum Resources Royalty (Administration) Act, 2008, both of which are administered by SARS.
 
The royalty is triggered on the transfer of a mineral extracted from within the Republic. As is the case for all other taxes, duties, levies, fees or money collected by SARS, the royalty collected is paid to the National Revenue Fund.

Who is it for?

The following persons/entity must register for the payment of the royalty to SARS:
  • Any persons/entity who holds a prospecting right, retention permit, exploration right, mining right, mining permit or production right or a lease or sublease in respect of such a right; or
  • Any persons/entity who wins or recovers a mineral resource extracted from within the Republic.

What steps must I take?

The entity needs to be registered as a taxpayer by completing the RAV01 form and submitting the required supporting documents for eFiling. If you are registering with SARS for the first time and you do not have a tax number, you must do an entity registration at a SARS branch. The entity will be able to subscribe to MPRR on eFiling through completion of the RAV01 form’s MPRR section. You can also take the completed MPR1 to the SARS Branch.
 
Once registered for tax, the entity can subscribe for MPRR. For queries on registration, the SARS Contact Centre can be contacted on 0800 00 7277 or the nearest SARS branch should be visited. Once registration has been completed and a tax number is given, the entity can then register for eFiling, which is a free and convenient way of interacting with SARS.

Once registration and subscription is in place, the declaration process should be followed. The completed MPR3 return must be completed, scanned and emailed to mineralroyalty@sars.gov.za.

What is the rate for the royalty?

The rate for the royalty is determined according to a formula contemplated in subsections (1) and (2) of section 4 of the Mineral and Petroleum Resources Royalties Act, 2008 and differentiates between the refined and unrefined conditions of the mineral resource, and are currently as follows –
  • for refined mineral resources: minimum of 0.5% to a maximum of 5%
  • for unrefined mineral resources: minimum of 0.5% to a maximum of 7%.

When and how should the royalty be paid?

Payments can be made via the eFiling channel using the “Additional payment” option to the “MINR” tax type. Note that bank channels were discontinued for MPRR payments on 13 September 2019, which implies that all MPRR payments will only be payable by using the eFiling channel. An eFiling profile should be set up for each MPRR taxpayer, and all payments should be made via this channel to ensure no issues are experienced when banking channels are discontinued.

Note that each payment must be accompanied by a completed MPR3 form as required by legislation for the two provisional payments, the third excess payment and the final return (if a further payment is necessary).
 
​Phase ​Description Date of release​ ​Outcome of release
Phase 1
  • MPR3 Form (new)
New MPR3 return (form) released. The form includes the previous MPR2 payment advice/ return as well as the old MPR3. The RAV01 will still be used to register a legal entity (single registration), and the MPR1 for subscription to MPRR​. ​01 Oct 2018 ​Successfully released, published and in use from 01 October 2018. All MPRR returns must be submitted on this new MPR3, even for prior periods.

Phase 2

  • RAV01 for subscription to MPRR
  • System solution for registration and subscription
​Master data system release and registration of the taxpayer. Creation of the taxpayer’s account and confirmation of subscription to MPRR (dependency – master data must be cleansed). The account number (MPRR tax reference number) will start with “814….”. New registrations and subscriptions for MPRR will be submitted via the new RAV01 form (replacing the MPR1 form). Refer to the registration page on the SARS website for more details. ​25 January 2019 ​Implemented

​Phase 3

  • New eFiling payment channel for MPRR
  • Deactivation of current payment channels
​New eFiling payment channel release. De-activation of the other current payment channels - via EFT and Over the Counter payments at bank branches (Payments@Banks), as well as the current channel available via eFiling for MPRR payments. 13 September 2019 ​Implemented
Communications to taxpayers

Phase 4

  • New eFiling channel – returns submission​
​Release of the eFiling channel to submit returns and pay to the new 814-account number. A monthly statement of account will be available.
​Last quarter
2019 (tbc)
​Release date to be confirmed and communicated to the taxpayers

Phase 5

  • Full and final release
  • eAccount
  • Statement of Account​
​Release of the eAccount and interim Statement of Account on eFiling to enable the MPRR taxpayers to maintain the account. This is the full account functionality and final release.​ ​First quarter
2020 (tbc)
​Release date to be confirmed and communicated to the taxpayers
 
You can access the MPRR external guide and MPR3 form below:

To access this page in different languages click on the links below:
 
Last Updated: 20/09/2019 2:37 PM     print this page
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 Top FAQs

Will penalties be levied on underestimation of royalty payable?
Yes. If the royalty paid is underestimated by an amount of more than 20%, the Commissioner may impose a penalty that may not exceed 20%

Do I need to pay the Mineral Royalty even if I am making a loss?
Yes. A minimum royalty rate of 0.5% must be paid even if you are making a loss.

Is the Mineral Royalty payable on my profit?
No. The Mineral Royalty is payable on your gross sales for the particular mineral resource.

Who is exempt from the Mineral Royalty?
Certain small Businesses are exempt from Mineral Royalty. The following conditions must be met on an annual basis: The gross sales of the extractor in respect of all mineral resources transferred do not exceed R10 million during the year.

Will I receive a Mineral Royalty tax number on registration?
No. Your income tax reference number must be used for declaration of Mineral Royalty.