Corporate Tax Rate
The small business corporate income tax rate will be reduced from 2.5% to 2% effective April 1, 2017. This means that the combined Federal and Provincial tax rate for small business income, up to $500,000 per year, will be 12.5% in British Columbia (subject, of course, to any changes coming in the Federal Budget).
The Government projects this measure to reduce tax revenue by approximately $70 million per year. Overall corporate tax revenue is between $3 and $3.5 billion per year; total provincial revenue is in the order of $50 billion per year.
Tax Credits Extended
The following tax credits have all been extended:
- Scientific Research and Experimental Development Tax Credit – to August 31, 2022.
- Mining FlowThrough Share Tax Credit – to the end of 2017.
- BC Training Tax Credit – to the end of 2020.
- Book Publishing Tax Credit – to March 31, 2019.
Tax Credits Expanded
The Interactive Digital Media Tax Credit has been expanded to include qualifying BC labour employed in the development of augmented reality and virtual reality products. Moreover, for corporations with qualifying expenses greater than $2 million, their principal business no longer need be the development of interactive digital media.
The Mining Exploration Tax Credit has been expanded to include costs incurred (after February 28, 2015) for environmental studies and community consultation.
As a result of the change to the small business corporate tax rate, the dividend tax credit on ineligible dividends will be decreased from 17% to 15% effective for 2017 onwards.
Gareth is a partner with our Tax Group. He brings more than 10 years of tax experience to the group having worked at Deloitte & Touche LLP, PricewaterhouseCoopers LLP and as the Director of Tax for a private real estate company.
Len’s practice focuses on taxation including both income and commodity taxation, in a transactional context. Len provides tax advice to Canadian pension plans in connection with their acquisitions and divestments both inside ...
Max has a taxation practice and assists in advising clients on:
- Income and sales taxation matters arising in connection with private equity funds and a variety of other transactions;
- Tax compliance issues affecting various types of ...
Reinhold advises clients on both international and domestic income taxation matters, mergers and acquisitions, corporate finance, corporate reorganizations, and cross-border transactions. He regularly provides taxation ...
Lawson Lundell's Business Law Blog covers a wide range of topics relevant to businesses of all sorts, including corporate governance, corporate commercial law, corporate finance and securities, mergers and acquisitions, procurement, private equity and venture capital, intellectual property, and business taxation. Please also see our litigation, project law, China law, and real estate law blogs.