JERUSALEM, Nov 22 (Reuters) - Israel Chemicals (ICL) said on Sunday it expects the annual impact on its bottom line from a new law that boosts mining taxes to be less than previously expected given lower potash prices.

As part of the 2015-2016 budget approved by parliament on Thursday, taxes on mining companies - of which ICL is by far the largest - were sharply raised. A progressive tax of 25 percent will now be levied after the companies reach an annual return on investment of 14 percent, and that jumps to 42 percent for returns above 20 percent.

The government had aimed to bring in up to an extra 500 million shekels ($129 million) a year as part of the plan. ICL, which has exclusive permits to extract minerals from the Dead Sea, fought hard against the tax hike and, in protest, has frozen or put under review nearly $2 billion in domestic projects while expanding activities outside Israel.

ICL said on Sunday that the net impact of the legislation in future years could be less than previously estimated since it is significantly dependent on the prevailing prices of potash.

"If applied on 2015 average potash prices, the company estimates that the net impact of the new legislation on the company's annual profits is expected to be lower than the expected net impact of $90-$100 million - based on potash prices in 2013 - as previously disclosed by the company on Nov. 12," ICL said in a statement to the Tel Aviv Stock Exchange.

ICL is one of the three largest suppliers of the crop nutrient potash to China, India and Europe. It is controlled by conglomerate Israel Corp.

($1 = 3.8855 shekels) (Reporting by Steven Scheer; Editing by Digby Lidstone)