Ontario resource tax credit
As of April 23, 2015, to harmonize with the federal government and other provinces, the Ontario resource tax credit and the additional tax on Crown royalties are eliminated and replaced with a deduction for royalties and mining taxes. You can carry forward unexpired unused Ontario resource tax credits for the first five tax years beginning after April 23, 2015. The credit and the tax are calculated on a prorated basis for tax years that include April 23, 2015.
The Ontario resource tax credit is based on the corporation's:
- notional resource allowance for the year, as determined in subsection 7(3) of Ontario Regulation 37/09 to the Taxation Act, 2007 (Ontario)
- adjusted Crown royalties for the year, as defined in subsection 36(2) of the Taxation Act, 2007 (Ontario)
- Ontario allocation factor, as defined in subsection 1(1) of the Taxation Act, 2007 (Ontario)
The Ontario resource tax credit is used to offset Ontario corporate income tax otherwise payable. Unused amounts (the resource tax credit balance at the end of the year) can be carried forward to the following year.
Complete Schedule 504, Ontario Resource Tax Credit and Ontario Additional Tax re Crown Royalties, if the corporation:
- has a permanent establishment in Ontario at any time in the tax year;
- is not exempt from corporate income tax;
- owns a Canadian resource property as defined in subsection 66(15) of the federal Income Tax Act; or
- produces in Canada petroleum, natural gas, related hydrocarbons, coal, sulphur, base or precious metals, certain minerals, or iron to the pellet stage from an oil or gas well, a mine, or tar sands in Canada;
- earned adjusted resource profits for the year and has a notional resource allowance for the year as determined in subsection 7(3) of Ontario Regulation 37/09 to the Taxation Act, 2007 (Ontario); or
- paid or incurred an adjusted Crown royalty for the year as defined in subsection 36(2) of the Taxation Act, 2007 (Ontario).
Claiming the credit
File a completed Schedule 504, Ontario Resource Tax Credit and Ontario Additional Tax re Crown Royalties, with your return.
For more information on the tax credit, see the schedule and section 37 of the Taxation Act, 2007 (Ontario).
On line 404 of Schedule 5, Tax Calculation Supplementary – Corporations, enter the amount of the credit you are claiming.
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