Bill 10 introduces a new tax credit for liquid natural gas (LNG) development in the province
British Columbia Bill 10 received third reading on April 4, 2019. It received first reading on March 27, 2019, and has since been amended to remove the repeal of the Liquefied Natural Gas Project Agreements Act. Bill 10 introduces a new tax credit for liquid natural gas (LNG) development in the province. This natural gas tax credit will be effective for taxation years beginning on or after January 1, 2020. According to a provincial news release, the credit will be calculated at 3% of the cost of natural gas (legislation in Bill 10 refers to 0.5%, plus a percentage which will be prescribed by regulation, of the corporation's eligible cost of natural gas). Qualifying corporations may be able to use this tax credit to reduce their provincial corporate income tax rate to as low as 9% (from 12%).
Bill 10 also repeals the Liquefied Natural Gas Income Tax Act, eliminating the current two-tier tax on net income from LNG facilities in British Columbia.
The corporate income tax measures in Bill 10 are considered substantively enacted for purposes of IFRS and Accounting Standards for Private Enterprise (ASPE) on April 4, 2019, the date the bill received third reading (as British Columbia has a minority government).
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Information is current to April 09, 2019. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500