1 (1) In this Act:
"administrator" means the person designated as the administrator by the minister for the purposes of this Act;
"aggregate paid up capital" means
(a) subject to paragraph (b), aggregate paid up capital within the meaning of section 7, and
(b) in relation to an authorized foreign bank, aggregate paid up capital within the meaning of section 7.1;
"amount" means an amount of money or the dollar value of a right or thing;
"assessment" includes reassessment;
"associated" has the same meaning as in section 256 of the Income Tax Act (Canada);
"authorized foreign bank" has the same meaning as in section 2 of the Bank Act (Canada);
"bank" includes an authorized foreign bank but does not include a bank in respect of which an application under section 344 of the Bank Act (Canada) has been approved under section 345 (2) of that Act;
"B.C. paid up capital" means the result obtained by subtracting from a financial corporation's net paid up capital the deduction, if any, made by the financial corporation under section 12;
"business" means an undertaking of any kind, and includes
(a) any profession, calling, trade or manufacture,
(b) any adventure in the nature of trade,
(c) any concern in the nature of trade, and
(d) any arrangement or endeavour conducted with a view to earning revenue or profit from an activity or an investment;
"credit union" means a credit union or extraprovincial credit union as defined in the Financial Institutions Act;
"deferred credit" includes, in respect of a financial corporation, government assistance, government grants, investment tax credits or tax incentives that are reported or accounted for in the financial statements of the financial corporation;
"financial corporation" means
(a) a bank, trust company or credit union, and
(b) the agent, assignee, trustee, liquidator, receiver or other official in whose hands, or under whose control, all or any part of the property of a bank, trust company or credit union is placed;
"generally accepted accounting principles" means generally accepted accounting principles used in Canada;
"jurisdiction" means
(a) a province of Canada, or
(b) a state outside Canada having sovereign power;
"net paid up capital" means the result obtained by subtracting from a financial corporation's total paid up capital the deduction, if any, made by the financial corporation under section 11;
"permanent establishment" means a permanent establishment as determined under section 2;
"property" means property of any kind and includes
(a) a right to or interest in property,
(c) a chose in action, and
"return" means a return in the form established by the minister;
"share" means a share of the capital stock of a corporation;
"tax" includes all penalties and interest that are, or may be, added to the tax under this Act;
"tax payable" by a financial corporation includes the tax payable by the financial corporation as fixed by assessment or reassessment or varied on appeal, in accordance with this Act;
"threshold amount" for a taxation year of a financial corporation means the applicable amount indicated opposite the taxation year as follows:
| Taxation year | Threshold amount |
| Ending after December 31, 2000 and on or before March 31, 2003 | $5 million |
| Ending after March 31, 2003 | $10 million; |
"total paid up capital" means the result obtained by subtracting from a financial corporation's aggregate paid up capital the deduction, if any, made by the financial corporation under section 10;
"trust company" means a trust company as defined in the Financial Institutions Act or the B.C. Community Financial Services Corporation established under the Community Financial Services Act, and includes
(a) an extraprovincial trust corporation as defined in the Financial Institutions Act, and
(b) a corporation that is a subsidiary of a bank and is a loan company to which the Trust and Loan Companies Act (Canada) applies.
(2) [Repealed 2001-30-2.]
(3) [Repealed 2002-10-2.]
(4) For the purposes of this Act,
(a) financial corporations are associated financial corporations if they are associated corporations within the meaning of section 256 of the Income Tax Act (Canada), and
(b) a financial corporation is associated with another financial corporation at the end of the first mentioned financial corporation's taxation year if the financial corporations were, at any time during that taxation year, associated financial corporations.
(5) Except as otherwise provided in this Act, for the purposes of determining the carrying value of the assets of a financial corporation, or any other amount relevant to the computation of a financial corporation's B.C. paid up capital for a taxation year, the amounts that must be used are the amounts reflected in the financial statements of the financial corporation for the taxation year that have been
(a) prepared in accordance with generally accepted accounting principles, and
(b) presented to the shareholders of the financial corporation.
(6) Despite subsection (5), the equity and consolidation methods of accounting, other than the proportionate consolidation method for joint ventures, must not be used for the purposes referred to in that subsection.
(7) If the financial statements referred to in subsection (5) were not prepared, the amounts that would have been reflected in those financial statements if they had been prepared must be used for the purposes referred to in that subsection.
1.1 (1) In this section, "corporation" means a corporation, as defined in this Act as it read on August 31, 2002.
(2) Despite the Corporation Capital Tax Amendment Act, 2001 and the Corporation Capital Tax Amendment Act, 2002, this Act and the regulations under this Act, as they read on August 31, 2002, continue to apply to a corporation for a taxation year that began before September 1, 2002.
(3) Despite subsection (2), the definition of "threshold amount" as re-enacted by the Budget Measures Implementation Act, 2003 applies to financial corporations with taxation years beginning before September 1, 2002.
2 (1) In this section:
"charter" includes
(a) an Act, a statute, an ordinance, letters patent, a certificate, a declaration or any other instrument or provision of law by or under which a financial corporation is incorporated, amalgamated or continued,
(b) the memorandum, articles or bylaws, by whatever name called, of a financial corporation, and
(c) in relation to a credit union, its constitution and rules;
"fixed place of business" includes a branch, an office and an agency;
"subsidiary controlled corporation" means a corporation more than 50% of the issued share capital of which, having full voting rights under all circumstances, belongs to the financial corporation to which it is subsidiary.
(2) A financial corporation that has a fixed place of business has a permanent establishment at that place.
(3) A financial corporation that has no fixed place of business has a permanent establishment at the principal place in which the financial corporation's business is conducted.
(4) A financial corporation that does not otherwise have a permanent establishment in Canada has a permanent establishment at each of the following:
(a) the place, if any, designated as its head office in
(i) its charter, or
(ii) any other record or resolution by which the designation of a head office for the financial corporation can be effectively made;
(b) the place, if any, designated as its registered office in
(i) its charter, or
(ii) any other record or resolution by which the designation of a registered office for the financial corporation can be effectively made.
(5) If a financial corporation carries on business through an employee or agent, established in a particular place, who has general authority to contract for the employer or principal, the financial corporation is deemed to have a permanent establishment at that place.
(6) A financial corporation that uses substantial machinery or substantial equipment in a particular place at any time has a permanent establishment at that place.
(7) A financial corporation that otherwise has a permanent establishment in Canada is deemed to have a permanent establishment on land it owns, or has a right to or interest in, in Canada.
(8) [Repealed 2002-10-4.]
(9) The fact that a financial corporation has business dealings through a commission agent, broker or other independent agent does not by itself mean that the financial corporation has a permanent establishment.
(10) The fact that a financial corporation has
(a) a subsidiary controlled corporation at a place, or
(b) a subsidiary controlled corporation engaged in a trade or business at a place
does not by itself mean that the financial corporation has a permanent establishment at that place.
(11) and (12) [Repealed 2002-10-4.]
3 (1) A financial corporation must, for each taxation year that the financial corporation has or had a permanent establishment in British Columbia, pay to the government a tax calculated in accordance with this Act if the financial corporation has, at the end of that taxation year,
(a) in the case of a financial corporation that is not associated with one or more other financial corporations, net paid up capital that is equal to or greater than the threshold amount, or
(b) in the case of a financial corporation that is one of 2 or more associated financial corporations, net paid up capital that, when added to the net paid up capital of every financial corporation with which it is associated, is in total equal to or greater than the threshold amount.
(2) If a financial corporation has, at the end of an applicable taxation year, net paid up capital of more than $1 billion, the tax imposed on and payable by the financial corporation under subsection (1) for the taxation year is,
(a) in the case of a financial corporation that, at the end of the applicable taxation year, is based in British Columbia and has its head office in British Columbia, an amount equal to 1% of the B.C. paid up capital of the financial corporation for that taxation year, or
(b) in any other case, an amount equal to 3% of the B.C. paid up capital of the financial corporation for that taxation year.
(2.1) If a financial corporation has, at the end of an applicable taxation year, net paid up capital of $1 billion or less, the tax imposed on and payable by the financial corporation under subsection (1) for the taxation year is, subject to sections 3.1 and 3.2, an amount equal to 1% of the B.C. paid up capital of the financial corporation for that taxation year.
(3) and (3.1) [Repealed 2001-30-6.]
(4) If a financial corporation is one of 2 or more associated financial corporations, the amounts of net paid up capital of the associated financial corporations that are to be added together for the purposes of subsection (1) (b) must be computed by using the taxation year for each associated financial corporation that ends in the same calendar year as the taxation year of the financial corporation for which the tax payable is being determined.
(5) [Repealed 2001-30-6.]
(6) The Lieutenant Governor in Council may make regulations
(a) defining when a financial corporation is considered to be based in British Columbia, and
(b) defining "head office"
for the purposes of subsection (2) (a).
(7) A regulation made under subsection (6) may be made retroactive to July 1, 1999 or such later date as the Lieutenant Governor in Council may determine, and a regulation made retroactive is deemed to come into force on the date specified in the regulation.
3.1 (1) For a financial corporation that
(a) is referred to in section 3 (2.1),
(b) is not one of 2 or more associated financial corporations, and
(c) has, at the end of the applicable taxation year, B.C. paid up capital that is less than the total of the threshold amount plus $250 000,
in the circumstances described in this section, the tax imposed on and payable under this Act by the financial corporation for that taxation year is the amount determined under this section rather than the amount of tax that would otherwise be payable by the financial corporation under section 3.
(2) If, at the end of a taxation year, the financial corporation has B.C. paid up capital that is
(a) equal to or greater than the threshold amount, and
(b) less than the total of the threshold amount plus $250 000,
the amount of tax imposed on and payable by the financial corporation for the taxation year is to be determined in accordance with the following formula:
| Amount = tax otherwise payable – [(notch – capital) X 1.6%] |
| where | ||
| tax otherwise payable | = | the amount of tax otherwise payable under section 3 for the taxation year by the financial corporation, if this section did not apply; |
| notch | = | the total of the threshold amount plus $250 000; |
| capital | = | the financial corporation's B.C. paid up capital for the taxation year. |
(3) If, at the end of a taxation year, the financial corporation has B.C. paid up capital that is
(a) equal to or greater than $1.5 million, and
(b) less than the threshold amount,
the amount of tax imposed on and payable by the financial corporation for the taxation year is to be determined in accordance with the following formula:
| Amount = [(capital - $1.5 million) X 1%] + $500 |
| where | ||
| capital | = | the financial corporation's B.C. paid up capital for the taxation year. |
(4) If, at the end of a taxation year, the financial corporation has B.C. paid up capital that is
(a) equal to or greater than $250 000, and
(b) less than $1.5 million,
the amount of tax imposed on and payable by the financial corporation for the taxation year is $500.
(5) If, at the end of a taxation year, the financial corporation has B.C. paid up capital that is less than $250 000, the amount of tax imposed on and payable by the financial corporation for the taxation year is the lesser of
(a) the amount of tax that would be payable under section 3 for the taxation year by the financial corporation, if this section did not apply, and
3.2 (1) For a financial corporation that
(a) is referred to in section 3 (2.1),
(b) is one of 2 or more associated financial corporations, and
(c) has, at the end of the applicable taxation year, B.C. paid up capital that, when added to the B.C. paid up capital of every financial corporation with which it is associated, is in total not more than the total of the threshold amount plus $250 000,
in the circumstances described in this section, the tax imposed on and payable under this Act by the financial corporation for that taxation year is the amount determined under this section rather than the amount of tax that would otherwise be payable by the financial corporation under section 3.
(2) If, at the end of a taxation year, the financial corporation has B.C. paid up capital that, when added to the B.C. paid up capital of every financial corporation with which it is associated, is in total
(a) equal to or greater than the threshold amount, and
(b) less than the total of the threshold amount plus $250 000,
the amount of tax imposed on and payable by the financial corporation for the taxation year is its proportionate share of the amount determined in accordance with the following formula:
| Amount = total tax otherwise payable – [(notch – total capital) x 1.6%] |
| where | ||
| total tax otherwise payable | = | the total amounts of tax that would be payable under section 3 for the taxation year by the financial corporation and every financial corporation with which it is associated, if this section did not apply; |
| notch | = | the total of the threshold amount plus $250 000; |
| total capital | = | the total of the B.C. paid up capital for the taxation year for the financial corporation and every financial corporation with which it is associated. |
(3) If, at the end of a taxation year, the financial corporation has B.C. paid up capital that, when added to the B.C. paid up capital of every financial corporation with which it is associated, is in total
(a) equal to or greater than $1.5 million, and
(b) less than the threshold amount,
the amount of tax imposed on and payable by the financial corporation for the taxation year is its proportionate share of the amount determined in accordance with the following formula:
| Amount = [(total capital – $1.5 million) x 1%] + $500 |
| where | ||
| total capital | = | the total of the B.C. paid up capital for the taxation year for the financial corporation and every financial corporation with which it is associated. |
(4) If, at the end of a taxation year, the financial corporation has B.C. paid up capital that, when added to the B.C. paid up capital of every financial corporation with which it is associated, is in total
(a) equal to or greater than $250 000, and
(b) less than $1.5 million,
the amount of tax imposed on and payable by the financial corporation for the taxation year is its proportionate share of $500.
(5) If, at the end of a taxation year, the financial corporation has B.C. paid up capital that, when added to the B.C. paid up capital of every financial corporation with which it is associated, is in total less than $250 000, the amount of tax imposed on and payable by the financial corporation for the taxation year is its proportionate share of the lesser of
(a) the total amount of tax that would be payable under section 3 for the taxation year by the financial corporation and every financial corporation with which it is associated, if this section did not apply, and
(6) For the purposes of this section, the proportionate share of an amount that is payable by a financial corporation under this section is the proportion that
(a) its B.C. paid up capital
(b) the total of the B.C. paid up capital of the financial corporation and every financial corporation with which it is associated that has a positive B.C. paid up capital.
(7) For the purpose of determining the tax payable by a financial corporation under this section, the amounts of B.C. paid up capital of the associated financial corporations and the amounts of tax otherwise payable under section 3 that are to be added together for the purposes of this section must be computed by using the taxation year for each associated financial corporation that ends in the same calendar year as the taxation year of the financial corporation for which the tax payable is being determined.
3.21 (1) In this section, "capital tax payable" means a financial corporation's tax payable under section 3, 3.1 or 3.2 for a taxation year.
(2) A financial corporation may deduct from the financial corporation's capital tax payable for a taxation year the amount determined by the following formula:
| CTP | = | the financial corporation's capital tax payable for the taxation year; |
| DT1 | = | the number of days in the financial corporation's taxation year that are after March 31, 2008 and before April 1, 2009; |
| DTY | = | the number of days in the financial corporation's taxation year; |
| DT2 | = | the number of days in the financial corporation's taxation year that are after March 31, 2009 and before April 1, 2010; |
| DT3 | = | in respect of the financial corporation's taxation year that includes and ends after March 31, 2010, the number of days in that taxation year that are after March 31, 2010. |
3.22 Sections 3 to 3.21 do not apply to a financial corporation in respect of a taxation year that begins after March 31, 2010.
3.3–3.5 [Repealed 2001-30-7.]
4 (1) If, in a taxation year of a financial corporation, the financial corporation's total taxable income, determined for the purposes of the Income Tax Act (Canada), is exempt from income tax under section 149 (1) or 149.1 of that Act, then, subject to subsection (2), that financial corporation is exempt from the tax under this Act for that taxation year.
(2) The exemption under subsection (1) does not apply to Crown corporations designated by regulation.
(3) The following financial corporations are exempt from the tax under this Act:
(a) the Credit Union Central of British Columbia;
(b) the Stabilization Central Credit Union of British Columbia;
(c) a bankrupt financial corporation from the date of its bankruptcy for as long as it remains a bankrupt.
(d) to (k) [Repealed 2002-10-8.]
5 (1) If a financial corporation has a taxation year of more or less than 365 days, the tax payable under this Act by the financial corporation for that taxation year is equal to that proportion of the tax otherwise payable under this Act for the taxation year that the number of days in the taxation year bears to 365 or, in a leap year, 366.
(2) If a financial corporation ceases to have a permanent establishment in British Columbia during a taxation year, the taxation year is deemed to consist of the number of days in the year during which the financial corporation had a permanent establishment in British Columbia, and subsection (1) applies to that taxation year.
(3) If a financial corporation begins having a permanent establishment in British Columbia during a taxation year, the taxation year is deemed to consist of the number of days in the year during which the financial corporation had a permanent establishment in British Columbia, and subsection (1) applies to that taxation year.
(4) If a financial corporation has a taxation year part of which is before April 1, 1992 and part of which is after March 31, 1992, the tax payable under this Act is equal to that proportion of the tax otherwise payable under this Act that the number of days in the taxation year after March 31, 1992 bears to the number of days in the taxation year.
(5) Subsections (2) and (3) do not apply to a financial corporation that is eligible for a deduction under section 12.
6 (1) [Repealed 1997-6-5.]
(2) The taxation year of a financial corporation for the purposes of this Act is the same as its taxation year, or deemed taxation year, under the Income Tax Act (Canada).
(2.1) [Repealed 2002-10-10.]
(3) If a financial corporation's taxation year, or deemed taxation year, under the Income Tax Act (Canada) changes, or is deemed to change or to have changed, in any way because of the operation of that Act, then the financial corporation's taxation year for the purposes of this Act is deemed to change, or to have changed, at the same time, in the same manner and to the same extent.
(4) If a financial corporation changes its taxation year, the financial corporation must advise the administrator of the new taxation year within 30 days after the change.
7 (1) The aggregate paid up capital of a financial corporation, other than an authorized foreign bank, means the aggregate of the amounts, computed at the end of its taxation year, of its
(a) capital stock,
(b) contributed surplus,
(c) retained earnings , and
(d) [Repealed 2002-10-11.]
( e ) accumulated other comprehensive income.
(2) Despite section 1 (5), for the purposes of subsection (1) of this section,
(a) subject to paragraph (b), the capital stock of a financial corporation includes all shares in the financial corporation, and
(b) the capital stock of a credit union does not include its non-equity shares as defined by the Financial Institutions Act.
7.1 (1) The aggregate paid up capital of an authorized foreign bank means the amount, if any, computed at the end of its taxation year, by which the aggregate of
(a) 10% of its total risk weighted assets, and
(b) its capital deductions,
exceeds the lesser of
(c) the total of all amounts that represent its subordinated indebtedness, and
(d) the total of the following amounts:
(i) 3% of its total risk weighted assets;
(ii) its capital deductions except those capital deductions required to be deducted from tier 1 capital under the capital adequacy guidelines issued by the Superintendent of Financial Institutions (Canada).
(2) [Repealed 2003-23-1.]
(3) [Repealed RS1996-73-7.1 (4).]
(4) [Spent. RS1996-73-7.1 (4).]
(5) [Repealed RS1996-73-7.1 (6).]
(6) [Spent. RS1996-73-7.1 (6).]
8–9 [Repealed 2001-30-10.]
10 At the end of a taxation year of a financial corporation other than an authorized foreign bank, the financial corporation's negative retained earnings, if any, may be deducted from its aggregate paid up capital.
11 (1) In this section, "total assets" means
(a) in relation to a financial corporation other than an authorized foreign bank, the aggregate of the carrying values of the financial corporation's assets on its balance sheet at the end of its taxation year and includes the amounts by which the carrying values of its assets have been reduced by liabilities or deferred credits, and
(b) in relation to an authorized foreign bank, the aggregate of the carrying values of the authorized foreign bank's assets on its balance sheet at the end of its taxation year that are used or held in the course of its Canadian banking business before the application of risk weights under the OSFI risk-weighting guidelines.
(2) A financial corporation, other than an authorized foreign bank, may deduct an investment allowance under subsection (2.01) if
(a) the financial corporation owns shares of another financial corporation that has a permanent establishment in British Columbia, other than a financial corporation referred to in section 4 (3), and
(b) the taxation year of the financial corporation and the other financial corporation end on the same date.
(2.01) A financial corporation may deduct from its total paid up capital an investment allowance equal to the proportion of the total paid up capital that the carrying value of those shares in the other financial corporation bears to the total assets of the financial corporation.
(2.1) An authorized foreign bank may deduct an investment allowance under subsection (2.2) if
(a) in the course of carrying on its Canadian banking business, the authorized foreign bank owns shares of another financial corporation that has a permanent establishment in British Columbia, other than a financial corporation referred to in section 4 (3), and
(b) the taxation year of the authorized foreign bank and the other financial corporation end on the same date.
(2.2) An authorized foreign bank may deduct from its total paid up capital an investment allowance equal to the proportion of the total paid up capital that the carrying value of those shares in the other financial corporation bears to the total assets of the authorized foreign bank.
(3) The investment allowance to which a financial corporation may be entitled under this section must not be greater than the aggregate of the carrying values of the investments referred to in this section that are made by the financial corporation.
(4) For the purposes of applying subsection (2.2) to an authorized foreign bank, the carrying values of the shares referred to in that subsection are the total value of those shares used or held in the course of its Canadian banking business at the end of its taxation year before the application of risk weights under the OSFI risk-weighting guidelines.
12 (1) At the end of a taxation year of a financial corporation other than an authorized foreign bank, there may be deducted from the net paid up capital of the corporation that portion of the net paid up capital that is allocated to jurisdictions outside British Columbia in accordance with prescribed rules.
(2) At the end of a taxation year of an authorized foreign bank, there may be deducted from the net paid up capital of the corporation that portion of the net paid up capital that is allocated to Canadian jurisdictions other than British Columbia in accordance with prescribed rules.
13–14 [Repealed 2001-30-14.]