15. INCOME TAXES
Deferred Income Tax Liability
The tax effects of temporary differences between amounts recorded in the Company’s accounts and the corresponding amounts as computed for income tax purposes gives rise to deferred tax liabities as follows:
|
|
December 31, 2017 | December 31, 2016 | December 31, 2015 | ||||||
|
Royalty interest |
$ | (4,159,013 | ) | $ | (8,090,497 | ) | $ | (9,053,435 | ) |
|
Tax loss carryforwards |
2,261,886 | 3,212,368 | 2,433,008 | ||||||
|
Other |
76,820 | 124,805 | 118,541 | ||||||
|
|
$ | (1,820,307 | ) | $ | (4,753,324 | ) | $ | (6,501,886 | ) |
As at December 31, 2017, no deferred tax assets are recognized on the following temporary differences as it is not probable that sufficient future taxable profit will be available to realize such assets:
|
|
December 31, 2017 | December 31, 2016 | December 31, 2015 | Expiry Date Range | ||||||||
|
Tax loss carry forwards |
$ | 42,094,000 | $ | 39,318,000 | $ | 37,728,000 | 2026 - 2037 | |||||
|
Exploration and evaluation assets |
1,485,000 | 2,137,000 | 10,022,960 | No expiry | ||||||||
|
Other |
$ | 10,425,000 | $ | 11,371,000 | $ | 8,385,770 | No expiry |
Income Tax Expense
|
|
December 31, 2017 | December 31, 2016 | December 31, 2015 | ||||||
|
Current tax expense |
$ | - | $ | - | $ | - | |||
|
Deferred tax recovery |
(2,489,902 | ) | (1,439,332 | ) | (3,431,230 | ) | |||
|
|
$ | (2,489,902 | ) | $ | (1,439,332 | ) | $ | (3,431,230 | ) |
The provision for income taxes differs from the amount calculated using the Canadian federal and provincial statutory income tax rates of 27.00% (2016 – 26%; 2015 – 26.00%) as follows:
|
|
December 31, 2017 | December 31, 2016 | December 31, 2015 | ||||||
|
Expected income tax (recovery) |
$ | (2,569,654 | ) | $ | (886,149 | ) | $ | (2,679,842 | ) |
|
Effect of lower tax rates in foreign jurisdictions |
(1,534,592 | ) | (474,971 | ) | (2,393,803 | ) | |||
|
Permanent differences |
1,007,427 | 1,010,562 | 2,594,459 | ||||||
|
Change in unrecognized deductible temporary differences and other |
260,595 | (1,428,442 | ) | (60,006 | ) | ||||
|
Foreign exchange |
346,322 | 339,668 | (892,038 | ) | |||||
|
|
$ | (2,489,902 | ) | $ | (1,439,332 | ) | $ | (3,431,230 | ) |
In September 2017, the British Columbia (BC) Government proposed changes to the general corporate income tax rate to increase the rate from 11% to 12% effective January 1, 2018 and onwards. This change in tax rate was substantively enacted on October 26, 2017. The relevant deferred tax balances have been remeasured to reflect the increase in the Company's combined Federal and Provincial (BC) general corporate income tax rate from 26% to 27%.
In December 2017, the United States Government proposed changes to the Federal corporate income tax rate to reduce the rate from 35% to 21% effective January 1, 2018 and onwards. This change in tax rate was substantively enacted on December 22, 2017. The relevant deferred tax balances have been remeasured to reflect the decrease in the Company's Federal income tax rate from 35% to 21% applicable to the Company's US subsidiaries.