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British Columbia provides provincial tax credits, exemptions and deductions to encourage business investment and innovation. Certain incentives target particular industries (film, mining, new media, and international financial services). British Columbia’s tax incentives are provided as “entitlements” – they do not have to be negotiated – and are available equally to all eligible businesses for qualifying activities. Federal government incentives are also available that in many cases mirror provincial measures.

Incentives for Research and Development

 R&D Tax Credits (Provincial and Federal):
10% non-refundable BC income tax credit for eligible expenditures on qualified R&D 20% non-refundable federal income tax credit for eligible expenditures on qualified R&D. Eligible expenditures: salaries and wages, materials, supplies, overheads and capital equipment used directly in qualified R&D activities

 R&D Tax Deductions (Provincial and Federal):
100% immediate deduction of eligible R&D expenditures (see above) to reduce BC and federal taxable income

Incentives for Machinery and Equipment Investment

 Sales Tax Exemptions (Provincial):
Purchase of eligible machinery and equipment is exempted from BC sales tax Eligible expenditures: machinery and equipment used in manufacturing, software development, mining and mineral exploration, petroleum and natural gas production, and logging Labour component of construction costs is exempt from BC sales tax

 Property Tax Exemptions (Provincial and Local):
Tangible personal property, such as production machinery, business equipment, furniture, and inventories, is exempt from BC provincial and local property taxes

 Separate Class Election for Depreciating Machinery & Equipment (Provincial & Federal):
Companies may elect to put individual capital assets in separate classes for income tax depreciation purposes instead of pooling them into broad classes established for claiming Capital Cost Allowances (the benefit is accelerated realization of “terminal losses” when disposing of specific assets having a short economic life) Eligible assets: Production machinery and equipment, computer equipment, and telecom equipment

Sector-Specific Incentives

 Mining Exploration Tax Credit (Provincial):
20% refundable provincial income tax credit for “grassroots” mineral exploration in BC

 International Financial Business Tax Refund (Provincial):
Refund of provincial corporate income tax paid by eligible companies on earnings from international financial services performed within British Columbia Refund of provincial personal income tax paid by specialists from outside of Canada working in British Columbia's international financial sector Eligible companies and employees are required to register under the BC International Financial Business (Tax Refund) Act

 Film Production Tax Credits (Provincial and Federal):

Provincial

Film and Television Tax Credit Program (BC controlled production companies*)

Basic Credit (30% of eligible labour costs) Regional Credit (12.5% prorated labour costs for photography outside of Metro Vancouver Training Credit (lesser of 15% of trainee salaries or 3% of eligible labour costs) Digital Animation or Visual Effects Credit (15% of eligible labour costs) *International treaty co-productions may be eligible

Production Services Tax Credit Program (available to non-BC controlled production companies)

Production Services Credit (18% of eligible labour costs) Regional Credit (6% prorated labour costs for photography outside of Metro Vancouver) Digital Animation or Visual Effects Credit (15% of eligible labour costs)

Federal

Canadian Film or Video Production Tax Credit (Canadian controlled production companies*)

25% of qualified labour costs for an eligible Canadian production *International treaty co-productions may be eligible

Film or Video Production Services Tax Credit (available to non-Canadian controlled production companies)

11% of qualified labour costs for an eligible production

New Media Tax Credit (Provincial) 30% non-refundable provincial income tax credit for venture capital corporations investing in an eligible new media business

Source: investing in British Columbia
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