File and Pay Your Logging Tax
If you have logging operations in B.C., you must file an annual logging tax return. You must file a tax return even if you incurred losses or didn’t have any earnings from your logging operations.
Logging Tax Return of Income (FIN 542S)
Use this tax return if you have income from the sale of B.C. logs, the sale of standing timber, the sale of timber rights or the export of logs.
Logging Tax Return of Income for Processors (FIN 542P)
Only use this tax return if you process B.C. logs into primary or secondary forest products (e.g. lumber, shakes, shingles, poles, pulp, paper)
The tax return must be filed within six months of the end of the tax year in which the logging operations occurred.
If you owed more than $2,000 in logging tax in the previous tax year, you must make logging tax instalment payments in the current tax year. An instalment payment is a partial payment of the total amount of tax payable for the year.
Your first and second instalment payments must be equal to at least 50% and 25%, respectively, of the lesser of:
- The previous year’s tax
- The current year’s estimated tax
You must pay your instalments as follows:
- The 50% instalment payment by the end of the tax year
- The 25% instalment payment by the end of the third month following the end of the tax year
If your estimated logging tax payable for the current year becomes less than your previous year’s actual tax payable, you may change your instalment payment amount part way through the current year.
See an example below of how you may calculate your instalment payments if you’re in this situation.
The remaining tax payable is due with the logging tax return six months after the end of the tax year.
You may be charged interest if you:
- Don't make instalment payments
- Make late or insufficient instalment payments
- Choose to pay instalments based on 50% and 25% of the current year's estimated tax, and the current year's estimated tax is less than both your actual tax and the previous year's tax
However, as part of the B.C. COVID-19 Action Plan, interest won’t be charged from March 24 – September 30, 2020 on any outstanding balances. Interest will be charged again effective October 1, 2020. You’re still responsible for paying the outstanding balance.
- Online using eTaxBC
- Through your bank or financial institution
- By mail or courier
- At a government office
If you’re not required to make instalments, you must pay the entire balance of tax owing on or before the logging tax return due date, which is six months after the tax year end.
This is an example for how to calculate and pay your instalments if you change your instalment payment amount part way through the current year because your estimated tax payable for the current year is less than your previous year’s actual tax payable.
Your end of taxation year date is January 31.
Your previous year’s actual tax payable was $20,000 and you made an instalment payment of $10,000 (50% of $20,000) for January 31.
However, in March, your business operations changed and you now estimate your current year’s tax to be $10,000 – a significant decrease from your previous year’s actual tax payable.
You decide to change the method for calculating instalments for the current year to now be based on your current year’s estimated tax payable instead of your previous year’s actual tax payable.
Your first instalment payment is now $5,000 (50% of $10,000), rather than $10,000
Your second instalment payment is now $2,500 (25% of $10,000), rather than $5,000
Therefore, your breakdown of each instalment payment due for the current year is as follows:
January 31: $10,000, which you already paid based on your actual logging tax payable for the previous year
April 31: $0, because you overpaid your January 31 instalment by $5,000
Any remaining balance for the current year is payable when you file the tax return for the current year, which is due within six months of the end of the tax year in which the logging operations occurred.
You may still be charged interest from the instalment due date if you underpay your tax instalment payments for the current year. Tax instalments are considered underpaid if they’re less than your actual tax payable for both the current year and the previous year.
Other Reporting Requirements
If you are issued a Notice of Assessment, reassessment, or an additional assessment from the Canada Revenue Agency that changes an amount relevant to the calculation of logging tax payable, you must notify us within 90 days of receiving that notice by forwarding a copy, along with an amended logging tax return, to the mailing address below. Notifications not received within the 90 days may be rejected.
Ministry of Finance
Income Taxation Branch
PO Box 9444 STN Prov Govt
Victoria B.C. V8W 9W8