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.
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A Guide to Canadian Mining Taxation