Controlled foreign affiliate
A foreign affiliate is a controlled foreign affiliate if a Canadian
resident owns more than 50% of the voting shares of the
foreign affiliate, or would own more than 50% of the voting
shares if it held all of the shares owned by related persons and
up to four arm’s-length Canadian residents and persons related
to them.
Corporation resident in
Canada
Includes all corporations incorporated in Canada.
Cumulative Canadian
development expense
See discussion on page 13.
Cumulative Canadian
exploration expense
See discussion on page 13.
Cumulative Canadian oil and
gas property expense
See discussion on page 14.
Cumulative eligible capital
Three-quarters of the cost of eligible capital property is added
to cumulative eligible capital and three-quarters of the proceeds
of disposition of eligible capital property is deducted from
cumulative eligible capital. A taxpayer may claim a deduction of
7% on a declining balance basis of its cumulative eligible capital.
Cumulative foreign resource
expense
See discussion on page 14.
Depreciable property
Capital property the cost of which can be deducted from income
over time. The amount that can be deducted in a year is limited
to the capital cost allowance for the particular class of property.
Eligible capital expenditure
The cost of eligible capital property.
Eligible capital property
Consists of intangible capital property such as goodwill,
franchises, incorporation fees, and customer lists.
Excluded property
Property the disposition of which by a foreign affiliate of a
Canadian resident does not result in foreign accrual property
income.
Exempt surplus
See discussion on page 38.
Farm-in/farm-out
See discussion on page 35 and following.
Farmee
A person who acquires an interest in a resource property of
another person (the farmor) in consideration for funding or
performing exploration and development work on the property.
Farmor
A person that has an interest in a resource property and grants
an interest in that resource property to another person (the
farmee) in consideration for the farmee’s either funding or
performing exploration and development work on the property.
© 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