Mining Exploration Tax Credit for Personal Income Tax
If you conduct grassroots mineral exploration in B.C., you may qualify for the mining exploration tax credit (METC).
To be eligible, you must incur qualified mining exploration expenses before January 1, 2020 for determining the existence, location, extent or quality of a mineral resource in B.C.
The credit applies to exploration for all base and precious metals, coal and some industrial minerals. Drilling expenses for oil and gas do not qualify.
Qualified mining exploration expenses may include expenses incurred in the course of:
- carrying out geological surveys
- digging test pits
- preliminary sampling
Qualified mining exploration expenses, provided they were incurred after February 28, 2015, may also include expenses for environment studies and community consultations to obtain a right, licence or privilege to determine the existence, location, extent or quality of a mineral resource in B.C.
Prospecting, drilling, trenching, digging test pits and preliminary sampling expenses incurred after May 17, 2018 are qualified mining exploration expenses only to the extent the expenses exceed any revenues resulting from those expenses before the mine comes into production in reasonable commercial quantities.
The credit is calculated as 20% of qualified mining exploration expenses less the amount of any assistance received or receivable. Assistance includes reimbursements you have received or are entitled to receive, as well as grants, subsidies, rebates and forgivable loans.
- For more details on the METC, see the bulletin Mining Exploration Tax Credit (CIT 006) (PDF)
Mineral Exploration in Mountain Pine Beetle Affected Areas
An enhanced rate of 30% is available for qualified mineral exploration undertaken in prescribed Mountain Pine Beetle affected areas.
Claiming the Credit
You claim the credit when you file your T1 Income Tax Return, by completing and attaching the British Columbia Mining Exploration Tax Credit (Individuals) form (T88).
To claim a share of a partnership's tax credit, members of a partnership must also file a completed British Columbia Mining Exploration Tax Credit Partnership Schedule (T1249).
For tax years ending on or before December 31, 2016, you must claim the credit no later than 36 months after the end of the tax year. For tax years ending on or after January 1, 2017, you must claim the credit no later than 18 months after the end of the tax year. The credit is fully refundable but must first be applied against total income tax payable. There are no carry-forward or carry-back provisions.
The following legislation applies to the METC: