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
|
