Interpretation

110.1   (1) In this Part:

"annual rate" means the following percentages, as applicable:

(a) 15% in relation to eligible expenditures incurred on or after April 1, 2026 and before April 1, 2031;

(b) 12.5% in relation to eligible expenditures incurred on or after April 1, 2031 and before April 1, 2032;

(c) 10% in relation to eligible expenditures incurred on or after April 1, 2032 and before April 1, 2033;

(d) 7.5% in relation to eligible expenditures incurred on or after April 1, 2033 and before April 1, 2034;

(e) 5% in relation to eligible expenditures incurred on or after April 1, 2034 and before April 1, 2035;

(f) 2.5% in relation to eligible expenditures incurred on or after April 1, 2035 and before April 1, 2036;

"annual rate period" means a period, beginning on April 1 of one calendar year and ending on March 31 of the following calendar year, in which a single annual rate applies;

"available for use" has the same meaning as in section 13 (26) of the federal Act;

"designated assistance" means

(a) government assistance, and

(b) non-government assistance, within the meaning of section 127 (9) of the federal Act;

"eligible expenditure" means an amount of an expenditure of a qualifying corporation that meets the following criteria:

(a) the expenditure forms part of the capital cost, within the meaning of the federal Act, of an eligible property;

(b) the expenditure is incurred on or after April 1, 2026 and before April 1, 2036;

(c) the expenditure has not been claimed by the corporation

(i) as an eligible expenditure under this Part in a preceding taxation year, or

(ii) as a BC qualified expenditure under Part 6 in the current taxation year or in a preceding taxation year;

"eligible property" means property, other than excluded property, that meets the following criteria:

(a) the property is

(i) property described in paragraph (q) of Class 1 of Schedule II of the Income Tax Regulations (Canada) to which section 1100 (1) (a.1) of those regulations applies as a result of an election made under section 1101 (5b.1) of those regulations,

(ii) property that would be included in Class 43 of Schedule II of the Income Tax Regulations (Canada) if the description for the Class were read without reference to paragraph (b) of the description, or

(iii) of a type or class prescribed by regulation;

(b) the property

(i) was acquired by the corporation after March 31, 2026 and before April 1, 2036, and

(ii) became available for use by the corporation

(A) after March 31, 2026 and before April 1, 2036, and

(B) in the taxation year for which a credit under this Part is claimed in respect of the property;

(c) the property has not been used, or acquired for use or lease, for any purpose whatever before it was acquired by the corporation;

(d) the property is to be

(i) used by the corporation in British Columbia primarily for the purpose of manufacturing or processing goods for sale or lease, or

(ii) leased by the corporation, for a term of at least 72 months, to a lessee that

(A) is a qualifying corporation, and

(B) can reasonably be expected to use the property in British Columbia primarily for the purpose of manufacturing or processing goods for sale or lease;

"excluded property" means any of the following:

(a) property acquired by a qualifying corporation in a taxation year in the course of earning income if any of the income in the taxation year is exempt income, as defined in section 248 (1) of the federal Act, or is exempt from tax under Part 1 of the federal Act;

(b) property that was first acquired, or that incorporates other property that was first acquired, by a person or partnership with which the qualifying corporation did not deal at arm's length at the time at which the qualifying corporation acquired the property;

(c) a property leased to a person described in section 149 (1) of the federal Act;

(d) prescribed property;

"government assistance" means assistance from a government, municipality or other public authority, whether as a grant, subsidy, forgivable loan, deduction from tax, investment allowance or as any other form of assistance, but does not include

(a) an amount deemed to have been paid under section 110.7,

(b) a deduction under section 127 (5) or (6) of the federal Act,

(c) an excluded loan, as defined in section 12 (11) of the federal Act, or

(d) a prescribed type of assistance;

"manufacturing or processing" does not include the following:

(a) any of the activities listed in

(i) subparagraphs (i) to (iv) of section 127 (11) (a) of the federal Act, or

(ii) subparagraphs (i) to (vi) of section 127 (11) (b) of the federal Act;

(b) the liquefaction of natural gas;

(c) a prescribed activity;

"net eligible expenditure" means the amount by which an eligible expenditure exceeds the amount of designated assistance received or receivable by the corporation, or by a related entity, in respect of the eligible expenditure;

"qualifying corporation" means, for a taxation year, a corporation that

(a) is a Canadian-controlled private corporation throughout the taxation year, and

(b) has a permanent establishment in British Columbia at any time during the taxation year,

but does not include a corporation that

(c) is exempt from tax under section 27 of this Act,

(d) is controlled directly or indirectly in any manner whatever by one or more persons all or part of whose taxable income is exempt from tax under section 27 of this Act or under Part 1 of the federal Act,

(e) is an employee venture capital corporation registered under section 8 of the Employee Investment Act,

(f) is a small business venture capital corporation registered under section 3 of the Small Business Venture Capital Act, or

(g) is of a type or class of corporation prescribed by regulation;

"related entity", in relation to a corporation, includes

(a) an associated corporation,

(b) a partnership of which the corporation is a partner, and

(c) another partner of a partnership referred to in paragraph (b);

"total net eligible expenditure amount", in relation to an annual rate period, means the total of all amounts each of which is a net eligible expenditure incurred by a qualifying corporation in the annual rate period.

(2) For the purposes of this Part, the following rules apply:

(a) the capital cost to a corporation of a property is to be computed as if no amount were added to that cost by virtue of section 21 of the federal Act;

(b) the capital cost to a corporation of a property is deemed to be the capital cost to the corporation of the property determined without applying section 13 (7.1) and (7.4) of the federal Act.

BC manufacturing and processing investment tax credit

110.2   (1) Subject to section 110.6, a qualifying corporation may claim a tax credit for a taxation year under this Part equal to the amount calculated in accordance with subsections (2) to (5) of this section.

(2) Subject to subsection (3), the BC manufacturing and processing investment tax credit of a qualifying corporation for the taxation year is the amount determined by the following formula:

(3) If a corporation claims a tax credit under this section in respect of eligible expenditures incurred in more than one annual rate period, the BC manufacturing and processing investment tax credit of the corporation for the taxation year is the total of all amounts each of which is an amount, for an annual rate period in which eligible expenditures are incurred, determined by applying the formula under subsection (2) in respect of the annual rate period.

(4) Subject to section 110.3, the sum of all total net eligible expenditure amounts claimed in a taxation year by the corporation for the purposes of a tax credit under this section may not exceed $2 million, and the amount of any net eligible expenditure in excess of the $2 million limit is excluded from the calculation of a tax credit under subsection (2) or (3).

(5) A corporation may not claim a tax credit under this section other than in the taxation year in which the eligible property becomes available for use.

Expenditure limit allocation for associated corporations

110.3   (1) In the case of qualifying corporations that are associated, within the meaning of section 256 of the federal Act, in the taxation year with one or more other qualifying corporations, the amount allocated to the corporations for the purposes of the limit under section 110.2 (4) of this Act is nil, subject to subsection (2) of this section.

(2) If all the qualifying corporations that are associated with each other in a taxation year each file with the minister an agreement that allocates for the purpose of this section an amount to each of them for the taxation year, for the purposes of section 110.2 (4), the limit of each of the corporations is the amount allocated to the corporation in the agreement, provided that the total of the allocated amounts does not exceed $2 million.

Amalgamations and wind ups

110.4   (1) If, on or after April 1, 2026, a qualifying corporation amalgamates with another corporation within the meaning of section 87 (1) of the federal Act,

(a) the new corporation is deemed, for the purposes of this Part, to be a continuation of each of its predecessor corporations, and

(b) the new corporation may not claim a credit under section 110.2 of this Act for any expenditure incurred in respect of eligible property by a predecessor corporation that was not a qualifying corporation at the time the expenditure was incurred.

(2) If, on or after April 1, 2026, a subsidiary corporation that is a qualifying corporation is wound up within the meaning of section 88 (1) of the federal Act, the parent corporation is deemed, for the purposes of this Part, to be a continuation of the subsidiary corporation.

Repayment

110.5   (1) This section applies to a qualifying corporation in relation to a particular eligible property if

(a) the corporation claimed a credit under this Part for the taxation year or any of the preceding 5 taxation years in respect of the acquisition of the eligible property, and

(b) the corporation, on or after April 1, 2026 and in the taxation year, did any of the following:

(i) disposed of the eligible property;

(ii) converted or changed the use of the eligible property such that the property is no longer an eligible property for the purposes of this Part;

(iii) removed the property from British Columbia.

(2) The qualifying corporation must add the amount determined under subsection (3) to its tax otherwise payable for the taxation year in which the disposition, conversion, change or removal described in subsection (1) (b) occurs.

(3) For the purposes of subsection (2), the repayment amount is the lesser of

(a) the amount included in the corporation's tax credit under this Part in respect of the particular eligible property, and

(b) the amount determined by the following formula:

tax credit ×		FMV
		capital cost

Filing requirements

110.6   (1) A qualifying corporation that wishes to claim a tax credit under this Part in respect of a taxation year must file, with the return of income filed by the corporation under section 29 for that taxation year, an application for the tax credit in the form, and containing the information, required by the Commissioner of Income Tax.

(2) In calculating its tax credit under section 110.2, a qualifying corporation is not entitled to a tax credit under this Part in respect of an eligible property unless the corporation files the form containing the information required under subsection (1) of this section in respect of that amount within 18 months after the end of the taxation year in which the property became available for use by the corporation.

Deemed payment

110.7   A corporation that has claimed and is eligible for a tax credit under this Part for a taxation year is deemed to have paid, at the time referred to in section 157 (1) (b) of the federal Act, as that section relates to that taxation year, the amount of that credit on account of its tax payable under this Act.

Power to make regulations

110.8   (1) Without limiting section 48 (1) and (2), the Lieutenant Governor in Council may make regulations as follows:

(a) prescribing a type or class of property for the purposes of paragraph (a) (iii) of the definition of "eligible property" in section 110.1 (1);

(b) prescribing property for the purposes of paragraph (d) of the definition of "excluded property" in section 110.1 (1);

(c) prescribing a type of assistance for the purposes of paragraph (d) of the definition of "government assistance" in section 110.1 (1);

(d) prescribing activities for the purposes of paragraph (c) of the definition of "manufacturing or processing" in section 110.1 (1);

(e) prescribing a type or class of corporation for the purposes of paragraph (g) of the definition of "qualifying corporation" in section 110.1 (1).

(2) Regulations made under subsection (1) may be made retroactive to April 1, 2026 or a later date and, if made retroactive, are deemed to have come into force on the specified date.