THE LEADING PAN-ASIA MINING INVESTMENT CONFERENCE AND EXHIBITION

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Canadas Tax Rates

FederalCorporate income tax 15%

Provincial/TerritorialCorporate income taxesMining taxes (generally profit-based)

Rates vary from 10% to 16%Rates vary from 10% to 18%

MunicipalProperty tax Varied

Since 2003, Canadas federal corporate income tax rate has dropped from 29.12% (includes the 1.12% corporate surtax eliminated on January 1, 2008) to 15% in 2015.

Canadas internationally competitive tax regime features incentives such as the Canadian Exploration Expense (100% deduction), Canadian Development Expense (30% deduction), and a 3-year loss carry-back and 20-year loss carry-forward provision. In addition to the existence of a number of provincial/territorial tax and non-tax incentives for mineral exploration, royalties or mining taxes, for the most part, are profit-based rather than based on tonnage or revenue.

A unique feature of Canadas tax regimes is flow-through shares (FTS). Flow-through shares enable a company to transfer eligible exploration and development expenses to investors. These expenses or deductions can be used by investors to reduce their taxable income from Canadian sources. Because the shares carry a tax deduction, they are sold at a premium compared to regular shares, enabling a junior company to raise relatively more funds to continue its exploration activities.

In 2000, the federal government introduced the Mineral Exploration Tax Credit (METC), a 15% income tax credit related to surface or above-surface exploration. The METC works in conjunction with Canadas FTS mechanism and offers investors a 15% tax credit (reduction of taxes payable) in addition to a 100% write-off of exploration expenses.

Canada has excellent mineral potential, a stable and favourable investment climate for

mineral capital, and is open for business.

Source: Natural Resources CanadaAdditional information is available on the Internet at: www.nrcan.gc.ca/mining-materials

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