Mineral Exploration Tax Credits
January 26, 2023
On January 25, 2023 an Order in Council was made amending the Mineral Exploration Tax Credit Regulations under the Mineral Resources Act. The amendments are deemed to have been in force, retroactively from April 7, 2022.
Subclause 2(2)d(ii) of the Mineral Exploration Tax Credit Regulation is replaced by the following:
“(ii) for any flow‑through mining expenditures incurred on or after April 1, 2008, flow‑through mining expenditures as defined subsection 127(9) of the ITA, except that on and after April 7, 2022 that definition is to be read as if it does not include paragraph (e)”.
Saskatchewan residents can invest in mineral exploration activities within the province by purchasing eligible flow-through shares issued by approved mineral exploration companies under the Saskatchewan Mineral Exploration Tax Credit (SMETC) program. The tax credit is 25 per cent (10 per cent provincial and 15 per cent federal).
Flow-through shares allow mineral exploration companies to renounce or “flow through” tax expenses associated with their Saskatchewan exploration activities to investors, who can deduct the expenses in calculating their own taxable income.
The Saskatchewan Mineral Exploration Tax Credit (SMETC) offers a non-refundable 10 per cent tax credit to Saskatchewan taxpayers who invest in eligible flow-through shares issued by mining or exploration companies.
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