Commitment to finalize LNG income tax framework fulfilled

Balanced Budget 2015

Minister of Finance Michael de Jong announced on March 25, 2015 Bill 26, the Liquefied Natural Gas Income Tax Amendment Act 2015, which will fulfil the government’s commitment to set out the remaining elements of a competitive LNG income tax framework. Photo courtesy of Province of British Columbia/Flickr.

 

The administration and enforcement component of the Liquefied Natural Gas Income Tax Act provides proponents with clarity and British Columbians with confidence, announced Minister of Finance Michael de Jong on March 25, 2015.

The introduction of Bill 26, the Liquefied Natural Gas Income Tax Amendment Act 2015, fulfils the government’s commitment to set out the remaining elements of a competitive LNG income tax framework.

The bill gives industry information about their obligations and rights under the act including their obligation to register, file returns and pay the tax and their right to appeal. It also sets out government’s powers to enforce the act including the powers to audit, assess penalties and collect the tax. In addition, the bill includes anti-avoidance rules, transitional rules and clarifying provisions.

The bill amends the Natural Gas Tax Credit under the British Columbia Income Tax Act to allow for the credit rate on the cost of natural gas to be adjusted above the existing 0.5 per cent rate by regulation. This flexibility allows the Province to respond to the fluctuating cost of natural gas to maintain a competitive tax structure. The maximum effective reduction of B.C. general corporate income tax rate from 11 per cent to eight per cent remains unchanged.

The Province committed to providing proponents with certainty through the introduction of the Liquefied Natural Gas Income Tax Act in the fall of 2014. This phase adds the administration and enforcement of the Liquefied Natural Gas Income Tax. The Province will continue to consult with LNG industry stakeholders in developing the regulations.

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