About This Book
We have written this book for business entities that invest
in mining activities to help them understand the Canadian
tax regime and how it applies to such activities in Canada
and abroad. The book is a summary of the relevant Canadian
legislation and provides an overview of the broad principles
applicable to any particular mining activity. The statements of
the law are current to June 30, 2013. At that time, there was
legislation in draft or proposal form that had not been finalized.
For ease of discussion, we have assumed that all the relevant
legislation will become law. Where proposed legislation is not
enacted, the relevant government usually provides transitional
legislation for the benefit of those taxpayers that relied on
the proposed legislation. In a few instances, where there are
proposals which have not been reduced to legislation, we have
described the nature of the proposals.
This book concentrates on the federal, provincial, and territorial
taxes applicable to mining activities and does not consider
other taxes and charges, such as payroll taxes, to which
all taxpayers carrying on business may be liable. A person
contemplating carrying on business in Canada should consult
a tax adviser about the application of these other taxes.
The relevant tax rules are detailed and complex, and we
have not endeavoured to discuss the many nuances of such
legislation. We have eschewed the word “generally” and
the phrase “in general” in order to make the text simpler
and more readable. We accept that there may be esoteric
exceptions to many of our statements, but we consider it
more important to give readers straightforward statements
that may not be true in every factual circumstance than to
bog down the reader by forcing her or him to read unending
caveats. Therefore, this book should not be seen as a
substitute for consultation with a knowledgeable tax adviser.
For a more detailed and technical review of the federal
legislation, see Canadian Resource Taxation, General Editors,
Brian R. Carr and C. Anne Calverley, QC (Toronto: Carswell,
looseleaf).
We have attempted to make the content of the book user-
friendly by keeping specific references to legislative provisions
to a bare minimum. In addition, we have provided a glossary
at the end of the book that includes concise definitions of tax
and mining industry terms. Throughout the text, the tax terms
and abbreviations are highlighted in bold type the first time
they are used in a section, to refer the reader to the glossary.
We have provided cross-references where a particular concept
is more fully discussed in another section of the book; these
cross-references are colour-coded and underlined for easy
identification. Finally, an index is included to guide the reader
to the pages where specific topics are discussed.
© 2013 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Introduction
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