- T101A Renunciation of Canadian exploration expenditures (CEEs) and Canadian development expenditures (CDEs)
Filing forms T101A, B, C AND D
Forms T101A, B, C and D have a checklist to help you prepare a complete return. An authorized officer must sign and date in the "Certification" area each form that is filed.
Who is required to file Forms T101A, B, C and D
A PBC is required to complete and file the appropriate T101 forms to renounce resource expenses (T101A), to reduce or reclassify an amount previously renounced (T101B), to remit any applicable Part XII.6 tax (T101C) or to allocate an amount of assistance among investors (T101D).
Filing deadlines and other dates
The filing deadlines outlined in Forms T101A, B, and C are summarized in Figure 1 on page 4. Year 1 is the year that the agreement was entered into or FTWs exercised as the case may be.
Figure 1: Filing deadlines and other dates
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Year 4
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Effective date of renunciation when using look-back rule – must be December 31 of Year 1 | ||||||||||||||||||||||||||||||||||||||
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Renunciation period when using the look-back rule – must be January, February or March of Year 2 | ||||||||||||||||||||||||||||||||||||
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Latest date to
file a renunciation using the look-back rule without being subject
to penalties if the renunciation was made in March (note: Form T101A must be filed in the month following the month the renunciation was made). |
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Latest date to file Part XII.6 tax without being subject to penalties – before March of Year 3. | ||||||||||||||||||||||||||||||||||||||
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Latest date to renounce expenditures that were incurred in the 24 months following the agreement – before March of Year 4. | ||||||||||||||||||||||||||||||||||||||
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Latest date to file a renunciation made in February of Year 4. | ||||||||||||||||||||||||||||||||||||||
Date of renunciation: This is the date that the renunciation is made, which is generally the earliest date that Form T101A was signed or certified, or when the T101 slips were sent to the investors. This date is relevant since the renunciation must be filed in the month following the month that the renunciation was made.
Consequence of the failure to file Forms T101A or D
If a corporation fails to file Form T101A for expenses renounced pursuant to the provisions of the Act (subsection 66(12.7)), the renunciation will not become effective in accordance with subsection 66(12.7001). In addition, where a corporation receives or is entitled to receive assistance as an agent for the holders of its FTSs and fails to file Form T101D pursuant to the provisions of the Act (subsection 66(12.701)), the expenses relating to the assistance are deemed not to have been incurred by the corporation in accordance with subsection 66(12.702).
T101A – Renunciation of Canadian Exploration Expenditures (CEE) and Canadian Development Expenditures (CDE)
Total number of T101 information slips attached: Enter the number of T101 information slips issued to investors.
Identification number previously issued: Enter the SITIN or TIN that the corporation obtained from the CRA after it filed Form T100A or C in accordance with subseciton 66(12.68). You cannot renounce an amount if an identification number has not been issued to you.
Part 2 – Exploration and development project information
To better evaluate the performance of the FTS program, please identify the mineral that your exploration program was or will be focused on.
If you are renouncing expenses in the mining sector, enter the percentage that was or will be surface and underground exploration. In cases where the look-back rule is used, you may have to estimate the level of activity that will be carried out. If the renunciation relates to both the mining and the oil and gas sectors, enter the percentage for each sector.
If you are renouncing CRCE, select the energy source that best describes the activity you will be engaged in.
Part 3 – Renunciation of eligible resource expenditures
Step 1: Enter the effective date of renunciation. Renounced expenses are deemed to be incurred on the effective date of renunciation by the person to whom they are renounced, and never to have been incurred by the corporation. The corporation may choose an effective date of renunciation that allows an investor to claim expenses before the actual date of renunciation.
For example, if the corporation renounces amounts on February 13 of Year 2 using the general rule, the corporation may elect to have the effective date of renunciation occur on any day after the agreement date in Year 1, up to February 13 of Year 2 provided the expenses were incurred. The effective date of renunciation will determine the year that the deduction can be claimed by an investor.
When the look-back rule is used however, the effective date of renunciation must always be December 31 of Year 1. The "effective date of renunciation" should not be confused with the "date of renunciation" discussed previously.
Step 2: Enter the amounts that you wish to renounce to your investors. Indicate the total amount of CEEs (including CRCEs and DCEEs) and CDEs renounced under subsections 66(12.6), 66(12.601) and 66(12.62).
Line 60 – General rule: For renunciations under the general rule, enter the expenses incurred up to the effective date of renunciation and within the period commencing on the date the FTS agreement was signed and ending 24 months after the end of the month in which that FTS agreement was signed.
Line 61 – Look-back rule: For renunciations under the look-back rule, enter the expenses incurred or to be incurred in Year 2 that can be renounced. The expenditures eligible for the look-back rule are certain CEEs (including CRCEs pursuant to a FTS agreement entered into after July 26, 2002 for expenses incurred after 2002) and deemed CEEs. The corporation may be subject to a Part XII.6 tax (Form T101C).
The look-back rule may be used if the following conditions are met:
- the consideration for the shares to be issued under the FTS agreement is paid by the subscriber in money before the end of Year 1;
- the corporation and the subscriber deal with each other at arm's length throughout Year 2;
- the corporation renounces eligible expenditures to the subscriber in January, February or March of Year 2; and
- the effective date of renunciation is December 31 of Year 1.
Line 65 – Total amount renounced: Enter the sum of lines 60 and 61. The total amount renounced (including previous renunciations) cannot exceed the total subscription proceeds raised (line 40 of Form T100B) or FTWs exercised (line 47 of Form T100C) as the case may be. Any excess may be subject to a penalty of 25% on the over renounced amount in accordance with subsections 163(2.2) or 163(2.21).
Step 3: Enter the amounts according to the location of the activities. The expenditures identified on line 65 should be allocated to the province(s) and territory(ies) where they have been or will be incurred. You may have to estimate the amount(s) if the look-back rule is used.
Step 4: Enter the eligible resource expenditures qualifying for an ITC and provincial tax credits according to the location of the activities. The expenditures should be allocated to the province(s) and territory(ies) where they have been or will be incurred. You may have to estimate the amount(s) if the look-back rule is used. The amount(s) qualifying for a federal ITC, or a portion, may also qualify for a provincial tax credit.
Line 68 - Total amount qualifying for ITC: Enter the total of the amounts allocated to the provinces or territories that qualify for the ITC under subsection 127(9). Only certain expenses related to preliminary mineral exploration activities conducted from or above ground qualify.
Expenses incurred in the following areas do not qualify for an ITC: oil and gas, coal, bituminous sands or oil shale sectors, expenses incurred to explore underground or for the purpose of bringing a mine into production and CRCEs.
The amount must have been renounced in favour of an individual (directly, or indirectly through a partnership of which the individual is a member) pursuant to a FTS agreement. The ITC was extended where the investor and the corporation entered into a FTS agreement on or before March 31, 2009. Under the "look-back" rule, funds raised with the benefit of the credit in 2009, for example, can be spent on eligible exploration up to the end of 2010.
Part 4 – Penalty calculation
Form T101A should be filed in the month following the month in which the renunciation was made. If the form is not filed by the filing deadline, it will be deemed to have been filed on time pursuant to subsections 66(12.74) and 66(12.741) when the penalty under subsection 66(12.75) is paid on filing and the form is filed either within 90 days of the filing deadline or at a later date where, in the opinion of the Minister, it would be just and equitable to permit such filing. The penalty is calculated on the total amount renounced (line 65).
Changes to the T101 information slips
If you prepare amended, or cancelled T101 information slips, send our copies of the informaiton slips and any other forms, with a covering note explaining the changes, to the Ottawa Technology Centre.
Amended T101 information slips – If you have to change some of the data on a T101 information slip for a certain investor, prepare another. Select the appropriate box on the right side of the amended information slip and send two copies to the recipient.
Cancelled T101 information slips – If you issued a T101 information slip by mistake and you want to cancel it, prepare another one with the same data as on the original T101 information slip. Clearly print the word CANCELLED at the top of the information slip and send two copies to the recipient.
Duplicate T101 information slips – If you issue a T101 information slip to replace one that a partner has lost or destroyed, prepare another one with the same data as on the original information slip. Select the "Duplicate" box on the right side of the revised information slip and send two copies to the recipient. You do not have to send us our copies of the duplicate T101 information slips.