MERN - Québec Mines - Tax incentives related to natural resources are upgraded







        ISSN en ligne :
        1499-383X





June 2004
 

BUDGET NEWSFLASH
Tax incentives related to natural resources are upgraded

Jocelyne Lamothe
Direction du développement minéral

In the Budget Speech delivered on March 30, 2004, the government acknowledged the fact that mineral exploration is an important activity that needs its consistent support. Not only is the government making the flow-through share regime permanent, but it has also improved the tax credit for resources.

The main changes brought about by the new tax support measures are as follows:

Before
budget

After
budget

Flow-through share regime

 

Permanent regime

Basic deduction of eligible exploration expenditures

100%
100%

For an individual, in addition to the basic deduction:

First additional deduction (expenditures in Québec)

10.42%
25%

Second additional deduction (surface expenditures)

20.83%
25%

 

 
------------
----------

Total deduction (surface expenditures incurred in Québec)

131.25%

150%

Deduction related to certain issuance expenditures

Moratorium
Permanent

Additional capital gains exemption for certain resource-related assets

Moratorium
Permanent
Tax credit for resources

 

 

Companies not mining a mineral resource

Expenditures related to a mineral resource in the Near or Far North

Refundable credit

33.75%
38.75%

Non-refundable credit

11.25%
6.25%
 
------------
------------

Total

45%
45%

Expenditures related to a mineral resource elsewhere in Québec

Refundable credit

30%

35%

Non-refundable credit

15%
10%
 
---------
--------

Total

45%
45%

Amount of time for which the non-refundable credit may be deferred

7 years
10 years

See also

Budget speech

 














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