British Columbia mining exploration tax credit

• The credit is calculated as 20% of qualified mining exploration expenses, less any assistance received or receivable.
• An enhanced rate of 30% applies to qualified mineral exploration expenses in prescribed Mountain Pine Beetle affected areas.
• The credit is fully refundable but must first be applied against total income tax payable.

• The applicant must be an eligible corporation or a corporation that is an active member of a partnership conducting grassroots mineral exploration in British Columbia.
• The applicant must incur qualified mining exploration expenses in B.C. for the purpose of determining the existence, location, extent, or quality of a mineral resource.
• The exploration must pertain to base and precious metals, coal, or certain industrial minerals (not oil and gas).
• Eligible expenses may include prospecting, geological surveys, drilling, trenching, digging test pits, preliminary sampling, and environmental studies required to obtain exploration rights.

Who is eligible?

• Eligible corporations conducting grassroots mineral exploration in British Columbia
• Corporations that are active members of partnerships conducting grassroots mineral exploration in British Columbia

Who is not eligible

• Limited partners in partnerships (they are not eligible to claim the credit).
• Companies conducting exploration activities related to oil and gas (drilling expenses for oil and gas do not qualify).

Eligible expenses

• Prospecting expenses for mineral exploration.
• Geological survey costs.
• Drilling expenses (excluding oil and gas drilling).
• Trenching and digging test pits.
• Preliminary sampling activities.
• Environmental studies and community consultations required to obtain rights, licences, or privileges for mineral resource determination.

Eligible geographic areas

• British Columbia

• Step 1: Calculate Qualified ExpensesDetermine and document all eligible mining exploration expenses incurred in British Columbia.
• Exclude any expenses related to oil and gas exploration after February 22, 2024.
• Step 2: Complete Required SchedulesFill out Schedule 421, British Columbia Mining Exploration Tax Credit, with details of qualified expenses and calculated credit amount.
• If applying as a member of a partnership, also complete the British Columbia Mining Exploration Tax Credit Partnership Schedule (T1249).
• Step 3: Prepare Corporate Tax ReturnEnter the credit amount on line 673 of Schedule 5, Tax Calculation Supplementary – Corporations.
• Step 4: Submit ApplicationSubmit Schedule 421, your completed T2 Corporation Income Tax Return, and all relevant schedules to the Canada Revenue Agency.
• Ensure submission is within 18 months after the end of the tax year.

• The mining exploration tax credit is fully refundable but must first offset income tax payable.
• There are no carry-back or carry-forward provisions; the credit must be claimed within 18 months after the tax year ends.
• An enhanced credit rate of 30% is available for exploration activities in Mountain Pine Beetle affected areas.
• Contact information for both eligibility questions and claim submissions is provided through designated provincial and federal offices.