British Columbia mining exploration tax credit
A corporation that has incurred qualified mining exploration expenses in British Columbia may qualify for the British Columbia mining exploration tax credit. The corporation must have maintained a permanent establishment in the province at any time in the tax year.
The expenditures have to be incurred in the tax year for determining the existence, location, extent, or quality of a mineral resource in British Columbia.
Qualified mining exploration expenses may include expenses incurred in the course of:
- carrying out geological surveys
- digging test pits
- preliminary sampling
Exploration expenses may also include expenses incurred for environmental studies and community consultation to get a right, licence or privilege for determining the existence, location, extent or quality of a mineral resource in BC.
Any flow-through mining expenditure renounced under the federal Income Tax Act does not qualify for the credit.
This credit also applies to partnerships. Taxpayers who are active members of a partnership, other than specified members (such as limited partners), can each claim their proportionate share of the partnership's tax credit.
The credit is equal to 20% of the amount by which:
- the total qualified mining exploration expenses incurred in the tax year
is more than
- the total assistance for amounts included in the total qualified mining exploration expenses for the tax year
Prospecting, drilling, trenching, digging test pits and preliminary sampling expenses incurred after May 17, 2018, are qualified mining exploration expenses only to the extent the expenses exceed any revenues resulting from those expenses before the mine comes into production in reasonable commercial quantities.
A corporation can claim an additional 10% of the total qualified mining exploration expenses incurred in prescribed mountain pine beetle affected areas. These expenses must be reduced by the total assistance attributable to them.
The credit is fully refundable, but must first be applied against total taxes payable.
Claiming the credit
File Schedule 421, British Columbia Mining Exploration Tax Credit, with your return.
You must claim this credit no later than 18 months after the end of the tax year, for a tax year that ends on or after January 1, 2017. It was previously 36 months.
To claim your proportionate share of a partnership's tax credit, also file Schedule T1249, British Columbia Mining Exploration Tax Credit Partnership Schedule.
For more information about this credit, see the schedules and section 25.1 of the British Columbia Income Tax Act.
On line 673 of Schedule 5, Tax Calculation Supplementary – Corporations, enter the amount of credit you are claiming.
Forms and publications
- British Columbia (provincial site)
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