Ontario taxpayers face corporate minimum tax

"Starting this year, corporations that conduct business in Ontario face a new tax a corporate minimum tax. This tax is in addition to the myriad of other taxes that make up a corporation's total tax burden including federal and provincial capital 1oXJ!S, payroll tax and sales taxes. Mining companies with gross revenues in excess of $10 million or total assets exceeding $5 million may be liable for this new tax. IntroductionOn December 8, 1993, the Ontario government introduced legislation to implement the corporate minimum tax (CMT promised in its May, 1993 budget. There are very few differences between the final legislation and the budget proposals.The CMT is effective for taxation years commencing after 1993. Subject to certain specific exemptions (detailed below), the tax applies to all corporations liable for Ontario Corporate Income Tax that have either gross revenues in excess of $10 million or total assets in excess of $5 million. These measurements apply to the aggregate gross revenues and total assets for all corporations in an associated group and a corporate partner's share of partnership assets and revenues must be included in the determination.In essence, the CMT is an income tax that is based on financial statement profit instead of an income amount that is determined separately under a statute. Accordingly mining companies (including so called ""junior"" exploration companies), which traditionally sheltered their taxable income by claiming generous exploration and development deductions, could find that they have a CMT liability."