BC introduces new two-tier tax on income from LNG facilities

The province of British Columbia this week introduced its much-anticipated legislation for a new two-tier tax on net income from liquefied natural gas (LNG) facilities. The legislation, which was originally announced in the provincial budget in February, introduced a two-tier income tax that would apply a minimum 1.5% ‘Tier 1’ tax on LNG profits before the recovery of capital investment costs and a 3.5% ‘Tier 2’ tax on LNG profits once capital payback had been achieved. The Tier 2 tax would rise to 5% in 2037.