Net revenue tax for coal and other mines

You pay 13% tax on your net revenue once you’ve recovered the capital invested in your mine and your Cumulative Expenditure Account (CEA) doesn’t have a balance. You pay this tax on the profit you earn in excess of the capital invested in your mine.

When you do have a balance in your CEA you pay Net Current Proceeds (NCP) Tax.

How to calculate

To calculate your net revenue, take your total revenue and deduct your CEA balance. If your CEA balance more than covers your revenue, the remainder is carried forward to the next year. You can reduce your tax payable by claiming a Cumulative Tax Credit

Total revenue

When calculating your total revenue, include:

  • Gross revenue
  • Government grants, subsidies and other assistance you received for capital assets
  • Insurance payments you received for capital assets
  • Revenue from the recovery of capital asset costs
  • Proceeds from the disposal of capital assets
  • The fair market value of assets used less or discontinued

CEA balance

There are three general criteria for including expenditures in your CEA Balance. They must be:

  • Incurred by an operator of the mine
  • Incurred for the purpose of earning revenue from the operation of the mine
  • Reasonable in amount

Specifically, your CEA balance can include:

  • Opening balance in your Cumulative Expenditure Account (CEA)
  • Pre-production discovery  or development costs
  • New mine allowance
  • Current operating costs
  • Increases or decreases in mineral product and supplies inventories
  • Equipment lease or rental costs
  • Capital asset purchasing costs
  • Exploration costs
  • Research costs
  • Reclamation costs
  • Investment allowance

Your CEA balance cannot include:

  • Amounts paid for the right to minerals from a mine
  • Services rendered or goods delivered after the end of the mine’s fiscal period
  • Interest, dividends and costs of financing or arranging financing
  • Costs of incorporation, organization or reorganization
  • Costs and losses on hedging transactions
  • For corporations, compensation in excess of $75,000 paid to a significant shareholder of the corporation or an affiliated corporation
  • Costs incurred after the sale price of the mineral product is determined
  • Any amount that is a reserve, contingency, allowance or bad debt expense