What's New Income Tax Section - 2008	To Receive Updates

Each time we change the information on our website, we record that change on this page. This lets you see at a glance what changes have been made.

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International Financial Activity Regulation

Further to changes to the International Financial Activity Act announced in Budget 2008, the regulation has been amended as follows:

OIC 394, June 6, 2008

1) Defines "qualifying business" in relation to the definition of  "international financial business" to mean

• an active business,
• a business carried on as a separate business within a corporation that carries on an active business, where that separate business earns income principally from property (such as treasury activities), other than from property used in the active business, or
• a business carried on by a corporation that is affiliated with another corporation that carries on an active business and the corporation pays at least $300,000 in annual salary and wages to employees employed in the active conduct of the corporation's business and has at least $10 million in capital employed in the business in British Columbia;

2) Defines prescribed securities for a non-securities corporation as short term debt securities that are not derivatives. These are commonly referred to as short term financial instruments or money market securities.  The terms "debt securities" and "derivatives" have the same meaning as in the CICA Handbook as it read February 19, 2008; and

3) Defines a prescribed foreign currency agreement to provide for the purchase, sale or exchange of foreign currency that is reasonably considered to have been made to reduce the risk of currency fluctuations related to an international financial activity.

OIC 497, June 27, 2008

1) Defines prescribed management services to include:

• strategic management services provided by the head office of the corporation; and
• the following human resource services provided by the head office of the corporation:
1. payroll;
2. benefits management;
3. recruitment and selection;
4. training and development.

2) Expands the listing of life science patents to include green energy patents.  These patents are those that relate to renewable power generation from such sources as wind, hydro, solar, wave and tidal energies.  The patent classifications are:

	Description	Classification
	Wave or tidal power	E02B 9/08; F03B 13/06, 13/08, 13/10, 13/12, 13/14, 13/16, 13/18, 13/20, 13/22, 13/24, 13/26
	Wind power	F03D
	Solar power	F03G 6/00; F24J 2/00; H01L 31/04
	Geothermal	F03G 4/00; F24J 3/00

For more information, please see the International Financial Activity Program.

Bulletin CIT 010-SR2, British Columbia Production Services Tax Credit has been revised to clarify the definition of a BC-based individual, for purposes of determining BC labour expenditure for the Production Services Tax Credit.

The Taxpayer Fairness and Service Code has been updated to reflect improvements in the typical small business audit process.

Bulletin CIT 013, Training Tax Credits for Employers, the Table of Eligible Programs and Completion Requirements has been updated to include Industrial Instrument Mechanics with Instrumentation and Control Technicians.

Bulletin PIT 002, Training Tax Credits for Apprentices, the Table of Eligible Programs and Completion Requirements has been updated to include Industrial Instrument Mechanics with Instrumentation and Control Technicians.

Bulletin CIT 009-SR2, Special Release, British Columbia Film and Television Tax Credit, provides information on the Budget 2008 changes to the British Columbia Film and Television Tax Credit.

Bulletin CIT 010-SR2, Special Release, Production Services Tax Credit, provides information on the Budget 2008 changes to the Production Services Tax Credit.

The provincial government announced its 2008 Budget on
February 19, 2008. Statutes administered by the Income Taxation Branch are amended as a result. The changes are described in ITB Budget Bulletin, Changes to Legislation Administered by the Income Taxation Branch.

February 1, 2008:

Bulletin IPT 001, Insurance Premium Tax for Taxable Insurers, has been revised to clarify the definition of 'a taxable insurer' in accordance with the Insurance Premium Tax Act.