Business Taxation
Business taxes in British Columbia are levied at the federal, provincial and local levels. The basic features of the tax system are similar to those of the United States.
| Federal |
General rate: 15 per cent
(Canadian-controlled private corporations pay 11 per cent on the first $500,000 of taxable income) |
Net income from financial statements adjusted to comply with the federal Income Tax Act |
| Provincial |
10 per cent
(Canadian-controlled private corporations pay 2.5 per cent on the first $500,000 of taxable income) |
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| Federal |
Rates vary by type of payment and country-specific tax treaties. Canada/U.S. Tax Treaty rates:
- Dividend payments 5 per cent.
- Interest payments zero.
- Most other payments 10 per cent.
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Payments of dividends, interest, royalties and fees to a non-resident by a Canadian subsidiary |
| Federal/Provincial |
HST rate in B.C. is 12 per cent consisting of a 7 per cent provincial portion and a five per cent federal portion.
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The HST allows businesses to recover most of the HST paid on purchases by claiming input tax credits. in 2013, the HST will be replaced with separately administered federal and provincial sales taxes. The Provincial Sales Tax (PST) will have specific exemptions for purchases of machinery, equipment and raw materials used in manufacturing. The Federal tax will flow through a company’s books like a value-added tax and be payable by the end consumer. Manufacturers will continue to recover the 5 per cent federal value added tax (GST) through input tax credits. |
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One per cent of the first C$200,000 plus two per cent of the balance |
Purchase price of real property
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| Federal |
4.95 per cent |
Net contributory earnings up to C$50,100 per employee (maximum annual premium contribution per employee C$2306.70)
|
| Federal |
1.83 per cent
(Employer 2.56 per cent) |
Insurable earnings up to C$45,900 per employee; (maximum annual premium per employee C$839.97 (Employer $1175.96) |
| Provincial |
Rates vary by industry and individual employer’s safety record*. Examples:
- Software development: 0.10 per cent
- Electronics manufacture: 0.20 per cent
- Motion-Picture post-production: 0.30 per cent
*Rates available online: WorkSafeBC
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Assessable earnings up to C$73,700 per employee. Maximum annual contribution per employee C$298.08. |
| Provincial |
Rate (percentage of assessed value) varies by type of activity
- Business Class 0.68 per cent
- Light Industry Class 0.68 per cent
- Major Industry Class 0.68 per cent
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Assessed value of real property (land and buildings).
“Tangible personal property” (e.g., machinery and equipment, inventories, furniture) is fully exempt from property taxes
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| Municipal |
Rate (percentage of assessed value) varies by type of activity and community. Example, City of Surrey (Greater Vancouver):
- Business Class: 0.73 per cent
- Light Industry Class: 0.63 per cent
- Major Industry Class: 1.13 per cent
See Community and Regional Profiles (Taxation) for community-specific rates
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Assessed value of real property (land and buildings).
“Tangible personal property” (e.g., machinery and equipment, inventories, furniture) is fully exempt from property taxes |