Canada's Natural Resources Network in the Asia Pacific 2016- Your Guide to Canada's Natural Resources Network in the Asia Pacific

2. THE LEADING PAN-ASIA MINING INVESTMENT CONFERENCE AND EXHIBITION

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Canada’s Tax Rates
Federal
Corporate income tax 15%
Provincial/Territorial
Corporate income taxes
Mining taxes (generally profit-based)
Rates vary from 10% to 16%
Rates vary from 10% to 18%
Municipal
Property tax Varied
Since 2003, Canada’s federal corporate income tax rate has dropped from 29.12%
(includes the 1.12% corporate surtax eliminated on January 1, 2008) to 15% in 2015.
Canada’s internationally competitive tax regime features incentives such as the Canadian
Exploration Expense (100% deduction), Canadian Development Expense (30%
deduction), and a 3-year loss carry-back and 20-year loss carry-forward provision. In
addition to the existence of a number of provincial/territorial tax and non-tax incentives
for mineral exploration, royalties or mining taxes, for the most part, are profit-based
rather than based on tonnage or revenue.
A unique feature of Canada’s tax regimes is flow-through shares (FTS). Flow-through
shares enable a company to transfer eligible exploration and development expenses to
investors.These expenses or deductions can be used by investors to reduce their taxable
income from Canadian sources. Because the shares carry a tax deduction, they are sold
at a premium compared to regular shares, enabling a junior company to raise relatively
more funds to continue its exploration activities.
In 2000, the federal government introduced the Mineral Exploration Tax Credit (METC), a
15% income tax credit related to surface or above-surface exploration.The METC works
in conjunction with Canada’s FTS mechanism and offers investors a 15% tax credit
(reduction of taxes payable) in addition to a 100% write-off of exploration expenses.
Canada has excellent mineral potential,
a stable and favourable investment climate for
mineral capital, and is open for business.
Source: Natural Resources Canada
Additional information is available on the Internet at: www.nrcan.gc.ca/mining-materials

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