Tax Terms

Accelerated capital cost 
allowance

Rapid capital cost allowance for a specific class of property in 
specific circumstances. In the mining context, a taxpayer is 
entitled to accelerated capital cost allowance of up to 100% for 
property belonging to Class 41(a) or Class 41(a.1). 

Active business income

In the context of the foreign affiliate rules, active business 
income includes income earned from any business (other than 
an investment business or a non-qualifying active business) 
and certain income from property such as interest, royalties, 
and rent that is deemed by the foreign affiliate rules to be active 
business income.

Adjusted cost base

The cost of acquisition of a property as adjusted by the ITA.

Adjusted cumulative foreign 
resource expense

Consists of cumulative foreign resource expenses as adjusted 
to take into account a transaction subject to the successor 
corporation rules. 

Adjusted stub period accrual

See discussion page 33.

All or substantially all

The ITA does not define the term “all or substantially all.” The 
CRA takes the position that all or substantially all means 90% 
but does not provide a methodology to use in the calculation of 
all or substantially all. The limited jurisprudence available does 
not provide much guidance. 

Allowable capital loss

One-half of a capital loss.

Allowance for depreciation

Allowance for depreciation means an allowance for the 
undepreciated value of depreciable assets for certain provincial 
mining tax regimes. Depreciable assets include the costs of 
the mine, mill, plant, and equipment, as well as exploration and 
development expenses. The allowance is permitted as part of 
the calculation to determine the theoretical value of the ore, at 
the mouth of the mine, on which the mining tax is calculated. 

Allowance for processing

An allowance by way of return on capital employed in the 
secondary crushing, grinding, concentrating, chemical 
extraction, smelting, refining, or packaging of output. The 
allowance is permitted as part of the provincial mining tax 
calculation to determine the theoretical value of the ore, at the 
mouth of the mine, on which the mining tax is calculated. 

Canadian-controlled private 
corporation

A private corporation that is a Canadian corporation and that is 
not controlled by one or more non-residents of Canada, one or 
more public corporations, or any combination of them.

Canadian corporation

A corporation incorporated in any jurisdiction in Canada or 
resident in Canada.

Canadian development 
expense

See discussion on page 12.

© 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