How do provincial potash mining taxes work in Saskatchewan?
The potash production tax is payable under the Mineral Taxation Act, 1983 (Saskatchewan). This tax consists of two components: a base tax of $11 (indexed) per K2O tonne of Saskatchewan potash sold and a profit tax of 15.0 to 35.0 percent on profits less certain credits. Where we fall within this range depends on several factors including potash price realizations, Canadian/US exchange rate, and the timing and amount of capital spending on potash projects in Saskatchewan. These taxes are deductible for Canadian income tax purposes and are charged to “Other Provincial and Mining Taxes”, below the gross margin line, on our income statement.
