Our Mineral Resources
Saskatchewan Mineral Exploration Tax Credit
The Saskatchewan Mineral Exploration Tax Credit Program (SMETC) offers a non-refundable 10 per cent tax credit to Saskatchewan taxpayers who invest in eligible flow-through shares (FTS) issued by mining or exploration companies after March 31, 2012. This provincial tax credit follows the eligibility rules of the federal Investment Tax Credit for Exploration.
To encourage long-term, sustainable development of Saskatchewan's mineral resources and to enhance Saskatchewan's competitiveness in mineral exploration, a temporary tax credit (the SMETC) was introduced by the Government of Saskatchewan in October 2000, and reintroduced on April 1, 2008. The reintroduction demonstrates the government's commitment to encourage investment in the mineral exploration sector.
To be eligible for the SMETC, individuals, other than trusts, must have purchased eligible FTS (in accordance with section 66 of the federal Income Tax Act) from an approved mining exploration corporation after March 31, 2012.
Investments by partnerships must be broken down to individuals, and tax credit is based only on eligible flow-through exploration funds slated for expenditure within Saskatchewan.
Application to issue FTS
A mineral exploration company wishing to issue FTS or flow-through warrants and take advantage of the tax credit must submit the following items to:
1. The business number of the corporation;
After the share sale, parts II and III of form T100 are submitted to CRA and copied to Saskatchewan Ministry of the Economy (ECON). Further, a completed Certificate of Planned Exploration Expenditure outlining the amount and value of the work to be conducted on each Saskatchewan disposition must be submitted to ECON. If the work is of a reconnaissance nature over undisposed land, then the National Topographic System (NTS) reference of the survey area must be indicated.
To be eligible for the SMETC, exploration companies must apply to ECON. If the application is subsequently approved, the company will receive permission to issue up to a certain maximum amount of tax credits to its Saskatchewan investors. The company will issue credits on "SK-METC" forms which will be provided by ECON upon approval. Copies of the completed forms are to be forwarded to ECON. In the case of partnerships that have purchased eligible FTS, and have received a tax credit, it is the partnerships' responsibility to ensure that each of their members be issued the completed SK-METC form including each member's name, social insurance number, complete address and share in the tax credit. All documents issued by the partnerships to their members are to be copied to ECON.
Subsequently, at the appropriate times, the corporation which has issued FTS must complete and file the appropriate areas of form T101 parts I, II and III with CRA and copies to ECON. Further, a completed Certificate of Incurred Exploration Expenditure is required by ECON when the project is complete.
Mineral Exploration Tax Credit Regulations
For further details regarding the Saskatchewan Mineral Exploration Tax Credit Program, please refer to the Mineral Exploration Tax Credit Regulations, found on the Queen's Printer at www.publications.gov.sk.ca/details.cfm?p=1261.
Instructions to Complete the SK-METC Form
Mineral exploration companies and Partnership Investors are required to complete the SK-METC Form to comply with the Mineral Exploration Tax Credit Regulations, and provide one completed copy to ECON.
It is the responsibility of the corporation to ensure that tax credits issued do not exceed amounts stipulated by the regulations.
Please address any questions to Victor Zhang at (306) 787-1581 or e-mail firstname.lastname@example.org.