Provincial Mining Tax

British Columbia

British Columbia’s Mineral Tax Act imposes a two-part mineral 
tax on operators of mines in the province, consisting of:

• a 2% net current proceeds tax and
• a 13% net revenue tax.

BC mineral tax is levied on a mine-by-mine basis. An operator 
cannot transfer tax attributes of one mine to another (with 
the exception of certain exploration expenses in limited 
instances). Net current proceeds tax is fully deductible from 
net revenue tax so that, in effect, only one part of the tax or 
the other will be payable. Tax is payable in advance, in monthly 
instalments based on the operator’s estimated tax liability 
for the year. If the amount paid by instalment exceeds the 
actual tax liability, the operator is credited with interest on the 
amount of the excess payment.

Net Current Proceeds Tax

The net current proceeds tax serves as a minimum tax on the 
net current proceeds of an operator of a mine. The net current 
proceeds of an operator are the amount by which the operator’s 

gross revenue from the mine exceeds the current operating 
costs (excluding capital costs). Net current proceeds tax is 
levied at a rate of 2% on the net current proceeds for the year. 

An operator’s gross revenue from a mine includes:

• the revenues from the sale of mineral production and 
• any cost recoveries or government assistance received in 

respect of the operation of the mine.

Gains and losses from commodity or currency hedging are 
excluded from the calculation of gross revenue. Current 
operating costs are expenses incurred relating directly to the 
operation of the mine and to the processing and distribution 
of production, including reclamation expenditures, provided 
that such costs are not capital costs. Foreign exchange gains 
and losses associated with mining operations are taxable or 
deductible, as the case may be. Capital costs include:

• exploration and pre-production discovery costs,
• certain pre-production development costs, 
• equipment leasing costs, and
• the cost of inventories.

© 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.

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 A Guide to Canadian Mining Taxation