Income Tax Regulations (C.R.C., c. 945)

Regulations are current to 2015-06-22 and last amended on 2015-06-19. Previous Versions

Additional Allowances in Respect of Certain Oil or Gas Wells

  •  (1) Subject to subsections (3) and (4) where a taxpayer has income for a taxation year from an oil or gas well that is outside Canada, or where an individual has income for a taxation year from an oil or gas well in Canada, in computing his income for the year he may deduct the lesser of

    • (a) the aggregate of drilling costs incurred by him in that year and previous taxation years in respect of the well (not including the cost of land, leases or other rights and not including indirect expenses such as general exploration, geological and geophysical expenses) minus the aggregate of all amounts deductible in respect thereof in computing his income for previous years; and

    • (b) that part of his income for the year that may reasonably be regarded as income from the well.

  • (2) Where a taxpayer has more than one oil or gas well to which subsection (1) applies, the allowance in respect of the drilling costs of each well shall be computed separately.

  • (3) Where an individual has income for a taxation year from an oil or gas well in Canada, no deduction may be made under this section in computing such income in respect of drilling costs of that well incurred after April 10, 1962.

  • (4) Where a taxpayer has income for a taxation year from an oil or gas well that is outside Canada, no deduction may be made under this section in computing such income in respect of drilling costs of that well incurred after 1971.

Additional Allowances in Respect of Certain Mines

  •  (1) Subject to subsection (3), where a taxpayer operates in Canada a mine for the production of materials from a resource he may deduct, in computing his income for a taxation year, such amount as he may claim not exceeding 25 per cent of the amount computed under subsection (2).

  • (2) The amount referred to in subsection (1) is the aggregate of all expenditures made or incurred by the taxpayer before 1972 that are reasonably attributable to the prospecting and exploration for and the development of the mine prior to the coming into production of the mine in reasonable commercial quantities, except to the extent that the expenditures were

    • (a) expenditures in respect of which a deduction from, or in computing, a taxpayer’s income tax or excess profits tax was provided by section 8 of the Income War Tax Act;

    • (b) expenditures in respect of which an amount was deducted in computing a taxpayer’s income under section 16 of chapter 63, S.C., 1947 or section 16 of chapter 53, S.C., 1947-48 or, if the expenditure was incurred prior to 1953, under section 53 of chapter 25, S.C., 1949 (Second Session);

    • (c) expenditures incurred after 1952 in respect of which a deduction was or is provided by section 53 of chapter 25, S.C., 1949 (Second Session), section 83A of the Act as it read in its application to the 1971 taxation year or section 29 of the Income Tax Application Rules,

    • (d) expenditures deducted in computing the income of the taxpayer in the year they were incurred;

    • (e) the cost to the taxpayer of property in respect of which an allowance is provided under paragraph 20(1)(a) of the Act; or

    • (f) the cost to the taxpayer of a leasehold interest.

  • (3) The amount deductible under subsection (1) shall not exceed the amount computed under subsection (2) minus the aggregate of

    • (a) amounts deducted under subsection (1) in computing the income of the taxpayer for previous taxation years; and

    • (b) similar amounts deducted in computing the income of the taxpayer for the purposes of the Income War Tax Act and The 1948 Income Tax Act (as defined in paragraph 12(d) of the Income Tax Application Rules).

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending regulations. SOR/94-686, s. 48.