Tax Insights
from Tax Services
Issue 2015-18
2015 British Columbia budget:
Tax highlights
February 18, 2015
In brief
On February 17, 2015, British Columbia’s Minister of Finance, the Honourable Michael de Jong,
presented the province’s budget.
The budget does not change corporate tax rates. Certain business tax credits were extended or enhanced,
including entertainment and media industry tax incentives, training tax credits, the small business
venture capital tax credit and the BC Mining Flow-Through Share Tax Credit.
As expected, the province’s top personal income tax rate will decline in 2016. Starting 2015, a new tax
credit for fitness equipment purchased for children will be available, but Medical Services Plan premiums
will increase.
This Tax Insights discusses these and other tax initiatives introduced in the budget. It also considers the
upcoming referendum for the proposed Metro Vancouver Congestion Improvement Tax (page 4).
In detail
2014 and 2015
BC
Combined
federal + BC
General and M&P income
11%
26%
active business
income to $500,000
2.5%
13.5%
investment income
11%
45.67%
Business tax measures
Corporate income tax rates
BC’s budget does not change
corporate income tax rates,
which are outlined in the table
to the right.
Entertainment and media tax
credits
The budget extends and/or
enhances the following
entertainment and media tax
credits:

BC interactive digital media
tax credit – extended three
years to August 31, 2018
Canadian-controlled
private corporations
(CCPCs)

Digital animation or visual
effects (DAVE) tax credit –
expanded to apply to
eligible post-production
expenditures for
productions if principal
photography begins after
February 28, 2015
BC training tax credits
As previously announced, the
BC training tax credits, which
are available to BC apprentices
and their employers, are
extended by three years to
December 31, 2017.
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Tax Insights
Small business venture capital tax
credit
The budget provides a one-year
increase of $3 million to the small
business venture capital tax credit
program. This will allow for up to
$10 million in additional equity
financing for qualifying new
corporations in 2015.
Personal tax measures
Personal income tax rates and
brackets
The budget confirms that, in 2016, the
provincial personal income tax rate on
taxable incomes above $150,000 will
drop from 16.8% to 14.7% – the rate
that was in effect in 2013 – fulfilling
the government’s promise that the 2.1
percentage point increase would apply
for 2014 and 2015 only. The rate
reduction is reflected in the table
below.
Top combined federal/BC rates
2014 2015
2016
Ordinary income &
interest
45.80%
43.70%
Capital gains
22.90%
21.85%
eligible
28.68%
25.78%
noneligible
37.99%
35.51%
Canadian
dividends
BC tax reduction credit
Starting 2015, the BC tax reduction
credit is enhanced, by increasing:

the tax reduction credit to $432
(from $412)

the phase-out threshold to
$19,000 (from $18,327)

the phase-out rate to 3.5% (from
3.2% in 2014) of net income
2
As a result, BC taxpayers with taxable
incomes of up to approximately
$19,000 will pay no provincial income
tax in 2015.
Children’s fitness equipment credit
Starting 2015, parents can claim a new
non-refundable children’s fitness
equipment tax credit equal to 50% of
the BC children’s fitness credit
amount claimed for their children.
Therefore, the new credit will provide
an additional benefit of up to $12.65
per child. Receipts for equipment
purchases are not required.
BC training and education savings
grant
As previously announced, starting in
August 2015, parents or guardians can
apply at participating financial
institutions for the BC training and
education savings grant – a one-time
payment of $1,200 for every BC
resident child who:

is born after 2006

is six years old, and

has a registered education savings
plan established on his or her
behalf
BC early childhood tax benefit
As previously announced, starting
April 1, 2015, the BC early childhood
tax benefit will provide eligible
families up to $55 per month ($660
annually) for each child under six.
The benefit will start to phase out
when net family income is $100,000
and will be eliminated when it reaches
$150,000. It will be administered
through the Canada child tax benefit
system.
BC education coaching tax credit
Teachers and teaching assistants who
perform at least ten hours of
extracurricular coaching activity in the
year can claim a new tax credit that
provides up to $25.30 per eligible
taxpayer. The credit is available for
the 2015, 2016 and 2017 tax years, at
which time it will be reviewed.
Home owner grant
The threshold for the phase-out of the
home owner grant will remain at
$1,100,000 for 2015.
The grant is reduced by $5 for every
$1,000 in assessed value exceeding
this threshold.
Medical Services Plan
Effective January 1, 2016, Medical
Services Plan maximum monthly
premiums will increase for:

single individuals – by $3 to $75

two-person families – by $5.50 to
$136

families of three or more – by $6
to $150
Premium assistance will be enhanced
to ensure those receiving assistance
will be unaffected.
Child support payments
Starting September 1, 2015, child
support payments will be fully exempt
from income assistance calculations
(in respect of government income and
disability assistance programs).
Tax credit for farmers
The government will explore options
to give farmers credit for donations of
agricultural goods to help those in
need.
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Tax Insights
Mining industry

sales tax is paid in another
jurisdiction in respect of the other
tangible personal property, and

there is no eligibility for a refund,
credit or rebate
The budget confirms the following
previously announced measures.
Mining incentives
The following mining incentives have
been extended:

BC Mining Flow-Through Share
Tax Credit – by one year to
December 31, 2015

New Mine Allowance – by four
years to December 31, 2019
Mine permit fees
Mine permit fees will be introduced,
but will not be imposed on exploration
companies.
Provincial sales tax (PST)
measures
Taxation of tangible personal
property
Starting February 18, 2015, the use of
tangible personal property includes
using tangible personal property that
is brought, sent or delivered into
British Columbia to make other
tangible personal property that is then
transported outside of the province to
fulfill a contract for improvements to
real property situated outside of
British Columbia.
A tax refund will be made for tax paid
on tangible personal property:

purchased in British Columbia, or

brought, sent or delivered into
British Columbia
that is used to make other tangible
personal property that is then
transported outside of British
Columbia to fulfill a contract for
improvements to real property
situated outside of the province if:
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Exemption for lift chairs
Effective February 18, 2015, a lift chair
designed to facilitate standing up or
sitting down will be exempt from PST
if sold on a medical practitioner’s
prescription.
Multijurisdictional vehicle tax
The tax payable on multijurisdictional
vehicles licensed after 2014 will be
calculated using:

a set travel ratio for each
jurisdiction for new fleets, and

the actual travel ratio for existing
fleets
hotel rooms) provided in British
Columbia, unless there is a specific
exemption.
A 2% MRDT also applies, in the same
way as the 8% PST, on behalf of
municipalities, regional districts and
eligible entities to sales of short-term
accommodation provided in
participating areas of British
Columbia.
The MRDT rate will increase to 3% if
an application by a municipality,
regional district or eligible entity has
been approved by regulation.
Property tax rates
In 2015, British Columbia will
continue to apply its longstanding
rate-setting policies for:

residential school property taxes

non-residential school property
taxes

residential rural property taxes

non-residential rural property
taxes
PST registration obligations
Starting September 1, 2015, persons
located outside of British Columbia
(whether in or outside of Canada) that
in the ordinary course of business:

accept orders for taxable goods
from a location in British
Columbia

sell or provide taxable goods to a
person in British Columbia, and

hold inventory in British
Columbia at the time those goods
are sold
must register for PST before the sale.
Voluntary registrations will be
accepted before September 1, 2015,
after which late registration penalties
may apply.
Municipal and Regional District Tax
(MRDT) rate on accommodations
Carbon tax and motor fuel tax
Obligations related to fuel imported
by ship
The obligations of collectors, retail
dealers and purchasers for fuel
imported by ship into British
Columbia are amended to further
streamline the compliance burden on
importers.
Due date for natural gas returns
Natural gas returns in respect of tax
payable on natural gas used in a
stationary internal combustion engine
during a month will be due the last
day (extended from the 15th day) of
the following month.
Generally, 8% PST applies to sales of
short-term accommodation (such as
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Tax Insights
Coloured fuel
Effective July 1, 2015, the authorized
uses of coloured fuel will include use
in a locomotive.
Also, effective July 1, 2015, purchasers
of coloured fuel in certain
circumstances will be required to:

pay the clear fuel tax rate on the
purchases, and

collect tax at that rate
unless a completed certificate (form
will be available soon) is obtained
from the purchaser (at or before sale).
However, the purchaser may be
eligible for a refund of the difference
between the tax paid and the coloured
fuel tax that would have been payable
if the coloured fuel was used for an
authorized use.
The penalties for purchasing or using
coloured fuel for an unauthorized
purpose is set at three times the tax
payable if the fuel is not coloured to a
maximum of $1,000 per taxpayer, and
an additional penalty of up to a
maximum of $1,000 per vehicle.
4
Further, the budget provides
clarification concerning refunds of
security for deputy collectors and
retail dealers in respect of coloured
fuel.
Tobacco tax
Security scheme
Effective February 18, 2015, security is
payable on tobacco that a wholesale
dealer has brought or sent into British
Columbia.
Also, the application of the security
scheme for wholesale and retail
dealers has been clarified.
Green initiatives
The budget provides $22 million over
three years for an incentive program
for the cement industry to produce
cement in a cleaner manner. Over the
five-year program, the province will
offer up to $27 million in conditional
incentives to encourage cement
producers to meet or beat new
emissions intensity benchmarks.
In addition, the Clean Energy Vehicle
Incentive Program and a
fuelling/charging infrastructure
program will be reintroduced to
provide incentives to British
Columbians to make clean and green
transportation choices.
Other energy efficiency and
conservation initiatives will also be
implemented.
Metro Vancouver mail-in
referendum: Metro Vancouver
Congestion Improvement Tax
Not mentioned in the budget – If
approved in a mail-in referendum to
be held from March 16 to May 29,
2015, a new 0.5% Metro Vancouver
Congestion Improvement Tax would
apply on most goods and services that
are:

subject to the PST, and

sold or delivered within the Metro
Vancouver region,
increasing the general PST rate from
7% to 7.5%, within the Metro
Vancouver Region, on these goods and
services.
Details of the tax, which would fund
the Mayors’ Transportation and
Transit Plan, are being developed.
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Tax Insights
Let’s talk
For a deeper discussion of how these tax measures affect you or your business, please contact:
Bill Holms
+1 (604) 806 7052
[email protected]
Zaheer Jamal
+1 (604) 806 7221
[email protected]
James Capobianco
+1 (604) 806 7788
[email protected]
Ted Bell (Green Initiative)
+1 (604) 806 7705
[email protected]
2015 budgets: PwC will keep you up-to-date on tax changes in Canada's federal and provincial budgets.
Go to www.pwc.com/ca/budget
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