The Cumulative Tax Credit Account is made up of Net Current Proceeds (NCP) tax that is paid in fiscal years when there is no Net Revenue.

Net Revenue Tax is paid only after the producer has recovered the investment in the mine and has earned a reasonable return on that investment. NCP tax is paid when the mine is more than covering its current operating costs, but has not yet earned enough to be liable for Net Revenue Tax.

Although actual interest expense cannot be deducted, it provides an allowance for return on capital invested in a mine, called an Investment Allowance. The balance in the Cumulative Expenditure Account (CEA) at any given time represents the allowable expenditures that have not yet been recovered, which is the same as invested capital.

The Investment Allowance is a prescribed percentage of the average CEA balance for the year. See the Investment Allowance Rates.

The purpose of the New Mine Allowance is to encourage new mine development. This allowance equals one-third of the capital costs of
new mines and expansion of existing mines. This means that 133.3%
of the qualifying capital expenditures can be added to the Cumulative Expenditure Account of the mine.

The mine must begin production in reasonable commercial quantities after December 31, 1994 and before January 1, 2016.

As of January 8, 1998, the Reclamation Regulation and Costs and Expenditures Regulation were amended. Current reclamation costs and contributions to a Mine Reclamation Fund are allowable as current operating costs, and capital reclamation costs can be added to the Cumulative Expenditure Account (CEA).

Before January 8, 1998, reclamation costs had to be added to the Reclamation Cost Account . Amounts could then be transferred to the CEA by filing an election. For operators who have accumulated balances under the old rules, any amounts added before the end of the 1998 fiscal year may still be transferred to the CEA by filing an election. If no election is made, the costs remain in the Reclamation Cost Account and are available to claim as a Reclamation Tax Credit.

Operators can still add reclamation costs to the Reclamation Cost Account in order to claim a Reclamation Tax Credit. A Reclamation Cost Election must be made within six months of the fiscal year end of the mine. This is usually done when a mine has paid Net Revenue Tax in the past, but has no revenue to claim costs against in the current year.

Reclamation Tax Credits provide for refunds of Net Revenue Tax.

The Earned Depletion Tax Credit is equal to the lesser of:

• 25% of the total of the Net Current Proceeds Tax payable and the Net Revenue Tax Payable
• the balance of the Earned Depletion Base Account

When a Mineral Tax Return is filed for the first time, any Earned Depletion Base remaining under the Mineral Resource Tax Act may be carried forward as the basis for a credit under the Mineral Tax Act . The amount carried forward is 1/3 of the remaining base at December 31, 1989 multiplied by 13%.

After the filing of the first return, any amount not claimed as a credit is carried forward in the Earned Depletion Base Account and available as a credit in the next fiscal year.

Each quarry operator may claim up to 25,000 tonnes production exemption. This maximum applies regardless of the number of quarries operated. Also, no more than 25,000 tonnes production exemption can be claimed at any one quarry, regardless of the number of quarry operators.

A moisture exemption is allowed for quarry materials with moisture
content greater than 15%, such as clay. The exemption reduces the taxable weight by the percentage of moisture over 15%. This exemption must be pre-approved by the Commissioner. Write to the Commissioner at:

Commissioner, Mineral Tax Act
PO BOX 9328 STN PROV GOVT
VICTORIA BC  V8W 9N3

Unless the Commissioner issues a demand for one, an operator does not have to file a Placer Gold Mine Mineral Tax Return if:

• the operator is an individual, and
• the fair-market value of the placer minerals produced from the mine in the calendar year is less than $50,000, and
• the total sales of placer minerals from the mine in the calendar year is less than $50,000

Under the Nisga'a Final Agreement Act, effective May 11, 2000, the Nisga'a Nation owns all mineral resources on or under Nisga'a Lands. The Nisga'a Lisims Government has the exclusive authority to determine, collect, and administer any fees, rents, royalties, or other charges in respect of mineral resources on or under Nisga'a Lands.