Competitive Tax Climate
As one of North America’s most dynamic business environments, British Columbia offers strategic advantages that include a competitive tax climate, a culture of innovation and a desirable location.
Corporate Income Tax
British Columbia’s general corporate income tax rate is only 12%. When combined with the federal rate, British Columbia businesses pay a combined general corporate income tax rate of 27% — among the lowest in the G7.
Personal Income Tax
British Columbia has the lowest provincial personal income taxes in Canada for individuals earning up to $125,000.
British Columbia provides provincial tax credits and exemptions to encourage business investment and innovation.
In Canada, including British Columbia, tax credits are legislated and are available equally to all eligible businesses for qualifying activities. They are not negotiated on a taxpayer-by-taxpayer basis.
More information on tax credits and incentives can be found on the B.C. government website
INVESTMENT CAPITAL INCENTIVES
Investors are eligible for tax credits for investing in Venture Capital Corporations, Eligible Business Corporations and Employee Share Ownership Plans.
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 30% non-refundable tax credit on their investment. Individual investors may receive a refundable tax credit for 30% of their investment up to $120,000 a year.
Under the Employee Share Ownership Plan, employees residing in B.C. can invest in their employer’s business and claim a 20% non-refundable tax credit, up to an annual maximum of $2,000. The business must be a Canadian company with at least 75% of its wages and salaries going to B.C. resident employees.
BRITISH COLUMBIA TRAINING TAX CREDITS
Training tax credits are available to eligible employers based on the wages paid to an eligible apprentice, to a maximum credit of $4,000 per apprentice per year for the first two years of an apprenticeship program and $2,500 per apprentice per year for completing level 3 and $3,000 for level 4. Eligible apprentices can receive tax credits too — up to $2,500 depending on the apprenticeship level they complete. Enhanced credits are available if the apprentice is an indigenous person or has a disability.
SCIENTIFIC RESEARCH AND EXPERIMENTAL DEVELOPMENT
The federal Scientific Research and Experimental Development (SR&ED) Tax Incentive Program, Canada’s largest program supporting R&D, may provide qualifying Canadian-controlled private corporations with a federal tax credit of up to 35% of qualified expenses for Scientific Research and Experimental Development carried out in Canada. Other Canadian corporations may be able to receive a 15% federal tax credit.
The SR&ED program 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 qualifying corporations that carry on scientific research and experimental development in B.C. with a refundable tax credit up to $300,000 and a non-refundable tax credit of up to 10% of qualified British Columbia SR&ED expenses in excess of the refundable BC SR&ED claimed.
PROPERTY TAX EXEMPTIONS AND CREDITS
Certain industrial businesses can claim industrial property tax credits for school property taxes. An owner of class 4/major industry property is entitled to a credit equal to 60% of the school taxes levied in the taxation year on the class 4 property.