Mining tax is imposed on profits from the extraction of mineral substances raised and sold by the operators of Ontario mines. It is levied on profits from the extraction of ore, e.g., "pit's mouth" profit, determined under the provisions of the Mining Tax Act and regulations.
Tax Rates
For mines that are not remote mines, the rate is 10% of an operator's profit in excess of $500,000 for 2004 and subsequent years. The annual profit exemption of $500,000 must be shared by associated corporations. The mining tax rates are prorated for taxation years which straddle the effective dates. There are adjustments for part ownership of a mine or a short production year. The applicable mining tax rates are as follows:
| pre-May 2, 2000 | May 2, 2000 | Jan 1, 2001 | Jan 1, 2002 | Jan 1, 2003 | Jan 1, 2004 |
|---|---|---|---|---|---|
| 20% | 18% | 16% | 14% | 12% | 10% |
Who Should Be Registered
Tax exemption for new mines or major expansions is earlier of 3 years or $10 million in profit from mine. Tax exemption for remote mines is earlier of 10 years or $10 million in profit from mine. After the 10-year mining tax exemption period for new remote mines, a 5% tax rate applies to profits from the operation of a remote mine.
Tax is imposed on every operator who realizes a profit from one or more mines. The tax is based on the operator's share of the profit from each mine in which it has an interest. The definition of an operator includes members of partnerships and joint ventures that operate a mine.
Reporting & Remitting Tax
Provisions affecting the filing of returns, assessments, interest and penalty charges and refunds are similar to those provided under the Corporations Tax Act.
