Low Tax Rates
British Columbia has one of North America’s most competitive tax climates for businesses. Personal tax rates are also competitive.
Corporate Income Tax
Effective corporate tax rate for many industries is significantly lower than in other West Coast jurisdictions. In the digital media sector, for example, British Columbia’s rate is 11.8 per cent. Similar businesses on the west coast of the United States typically pay more than 30 per cent.
In addition, British Columbia’s general corporate income tax rate is 11 per cent, among the lowest in Canada. BC combined federal-provincial rate is 26 per cent, among the lowest in G7 countries.
Corporate Income Tax Rates – 2013
British Columbia 26.00%
Source: PwC research, December 15, 2014
British Columbia – Provincial corporation tax
Tax Rates and Business Limits
Corporate income tax rates are expressed as a percentage of taxable income earned in the province.
B.C. has two rates of corporation income tax – the general rate and the lower small business rate.
The lower small business rate is applicable to Canadian-controlled private corporations (CCPCs) with active business income eligible for the federal small business deduction.
Generally, active business income is income earned by a corporation from a business other than a specified investment business or a personal service business.
On the first $500,000 of business income, British Columbia taxes businesses at just 2.5 per cent. Since 2002, this $500,000 threshold has increased 150 per cent, allowing businesses to pay less tax on a larger amount of income.
The lower small business rate applies to active business income up to the B.C. business limit of:
$500,000 effective January 1, 2010
$400,000 effective January 1, 2005 to December 31, 2009
$300,000 from April 1, 2002 to December 31, 2004
The general rate applies to income over $500,000 and any income that is not eligible for the lower small business rate (e.g. investment income).
When the rate or the business limit changes during the tax year, you have to base your calculation on the number of days in the year that each rate or limit is in effect.
General Corporate Income Tax Rate
Effective April 1, 2013 11.0%
January 1, 2011 – March 31, 2013 10.0%
January 1, 2010 – December 31, 2010 10.5%
July 1, 2008 – December 31, 2009 11.0%
July 1, 2005 – June 30, 2008 12.0%
January 1, 2002 – June 30, 2005 13.5%
July 1, 1993 – December 31, 2001 16.5%
Small Business Corporate Income Tax Rate
Effective December 1, 2008 2.5%
July 1, 2008 – November 30, 2008 3.5%
January 1, 2001 – June 30, 2008 4.5%
July 1, 2000 – December 31, 2000 4.75%
July 1, 1999 – June 30, 2000 5.5%
January 1, 1999 – June 30, 1999 8.5%
International Business Activity
The International Business Activity (IBA) program provides eligible corporations and specialists who work for those corporations a refund of the B.C. income tax paid on income related to the corporation’s international business carried on in B.C.
An eligible corporation must register itself, and any specialists it employs, to qualify for a refund under the IBA program. A refund will be paid to a registered corporation or an IB specialist only after all B.C. and federal income taxes for the tax year are paid.
Please note: In 2010 the International Finance Activity Act was renamed the International Business Activity Act and the program is now known as the International Business Activity (IBA) program.
To qualify for the International Business Activity (IBA) program, the corporation must meet certain requirements and must conduct an international business in B.C.
An international business includes the following types of businesses:
International financial business
International film distribution business
International patent business
Each type of international business has specific eligibility requirements.
The government has proposed to expand the definition of international business to include the following types of businesses:
International digital media distribution business,
International carbon trading and certification business, and
International clean technology business.
Tax Credits and Exemptions
Along with affordable base rates, BC offer tax credits and exemptions to many industries. These include research and development, mining exploration, oil and natural gas production, film and TV production, new media (digital animation and game development), and international business.
British Columbia does not levy provincial payroll, franchise or capital taxes. BC also has no provincial sales tax on most production machinery and equipment.
Personal Income Tax
British Columbia has the lowest provincial personal income taxes in Canada for people earning up to $121,000.
What separates us from our competitors is that our services don’t end with the registration of your company. We offer a wide range of additional services others can’t or just won’t offer, such as lifetime free support.
Whilst most providers either specialise on personalized consultation at relatively high rates or run bulk registration factories without any support, we want to offer the positive aspects of both types.
Therefore TBA combines professional advice, worldwide registration services, reasonable fees, customized order processing, lifetime support and fast processing. Where others see company formation services as a bulk registration with no support and no individual assistance, we do care about your business needs.
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You may call or email us, and we will be happy to assist you in a fast and efficient manner.
You can also come and visit us at our Limassol offices to discuss issues face to face if you prefer. Just arrange an appointment and we will be happy to meet with you.