In Canada, including British Columbia, tax incentives are legislated and are available equally to all eligible businesses for qualifying activities. They are not negotiated on a taxpayer-by-taxpayer basis.
Certain incentives target specific industries, including:
- Screen-based industries (film and television, interactive digital media)
- natural gas;
- life sciences;
- clean technology
Other incentives target specific business activities, such as certain international business activities, manufacturing, training, and research and development.
Small Business Venture Capital Programs
British Columbia’s venture capital programs
provide tax credit incentives to encourage early-stage investment in small businesses throughout the province. Corporations that invest in a registered venture capital corporation or a registered eligible business corporation may receive a non-refundable tax credit against British Columbia tax equal to 30 per cent of the investment.
International Business Activity (IBA) Program
British Columbia refunds provincial income tax paid on income earned on eligible international business activities. Corporations must register with AdvantageBC
and the BC Ministry of Finance
in order to qualify for the program.
British Columbia Training Tax Credit
Training tax credits
are available to employers based on the wages paid to an eligible apprentice to a maximum of $4,000 per apprentice per year depending on salary, program, and apprenticeship level. Eligible apprentice employees can receive tax credits too - $1,000 to $3,750 depending on the apprenticeship level they complete.
Capital Cost Allowances
Federal capital cost allowances
allow sole proprietorships and other small businesses to put eligible capital assets in separate classes for income tax depreciation purposes. Eligible assets include production machinery and equipment, computer equipment, and telecom equipment.
Machinery and Equipment
Qualifying businesses do not need to pay the provincial sales tax on purchases of eligible machinery and equipment.
Corporations can claim income tax depreciation of up to 50 per cent a year on certain manufacturing and processing equipment. This accelerates deductions, and encourages reinvestment in operations.
In addition, imports of advanced machinery and equipment are duty-free and there are no tariffs on manufacturing inputs. Input tax credits let manufacturers recover the 5 per cent federal value-added tax (GST) paid on inputs.
Property Tax Exemptions and Credits
Tangible personal property, such as production machinery, business equipment, furniture, and inventories, is exempt from property taxes in British Columbia. There are also certain exemptions for real property. For details, visit the British Columbia Assessment Authority.
Certain industrial businesses can claim industrial property tax credits for school property taxes. The credit is 60 per cent of school property taxes payable annually.
LiveSmartBC: Small Business Program
British Columbia offers product incentives, free energy assessments and funding to help small businesses reduce energy consumption and save money through LiveSmartBC
Scientific Research and Experimental Development
The federal Scientific Research and Experimental Development (SR&ED) Tax Incentive Program
provides tax incentives to encourage research and development in Canada. It is administered by the Canada Revenue Agency and is the largest single source of federal government support for industrial research and development. The program allows the deduction of eligible SR&ED expenditures to reduce income for tax purposes, and investment tax credits that can help reduce tax liability or, in some cases, yield a cash refund.
British Columbia’s SR&ED program
mirrors the federal program and provides an additional refundable 10 per cent tax credit against provincial tax for eligible research and development expenditures for eligible Canadian companies. Foreign companies may qualify for a 10 per cent credit, but it is on a non-refundable basis.