Canada’s British Colombia has finalized the details of its Liquefied Natural Gas Income Tax.
“The administration and enforcement component of the Liquefied Natural Gas Income Tax Act provides proponents with clarity and British Columbians with confidence,” B.C.’s Minister of Finance Michael de Jong said in a statement on Wednesday.
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, according to the statement.
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% 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% to 8% remains unchanged, the statement said.
The Province introduced the Liquefied Natural Gas Income Tax Act in the fall of 2014.