A copy of your federal income tax return and financial statements must be submitted with the logging tax return.
If the return indicates a balance of tax owing, a cheque or money order made payable to the Minister of Finance should accompany the return.
If logging operations cease, please notify the Commissioner of Income Tax in writing (same addresses as above). You will no longer be required to file a logging tax return unless you resume logging activities in the future.
Calculation of Tax
Logging income is calculated in accordance with Division B of the Income Tax Act (Canada) and is generally gross revenue from logging operations less related operating expenses.
If logging income is recorded as a capital gain, the logging tax applies to the taxable portion of the capital gain.
Where logs are manufactured into primary and secondary forest products, a processing allowance may be deducted.
The processing allowance is calculated as 8% of the original cost of assets used to produce primary and secondary forest products. The allowance may not exceed 65% nor be less than 35% of the net processing income (calculated as total income from all sources less income from the sale of logs or standing timber and non-logging income).
For each taxation year, a taxpayer must pay a tax equal to the lesser of:
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10% of the taxpayer's income from logging operations in British Columbia
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150% of the federal logging credit that would be allowable before political contributions and investment tax credits. |
The amount of logging tax paid is usually fully deductible as a credit from income taxes if claimed within three years of filing a federal income tax return.
Please contact the Canada Revenue Agency for more information (opens in new window).
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