The BC government released the 2020 Budget on February 18, 2020. The major change on the income tax side was the creation of a new tax bracket for individuals that earn more than $220,000 a year. This change is effective January 1, 2020, and as a result the new top marginal tax rates are as follows:
|Personal Combined Federal/British Columbia Top Marginal Rates for 2020|
|Before Budget||After Budget|
|Interest and regular income||49.80%||53.50%|
There were no changes to the corporate tax rate. The combined BC and federal corporate tax rates remain as follows:
|Small business tax rate||General corporate tax rate||Investment income|
The small business tax rate applies to the first $500,000 of active business income.
The Budget did extend the tax credits for training and mining activities as well as increase the BC Film and Production tax credit to $10,000.
The Budget also contained some PST changes. Some of the main items are:
- Starting July 1, 2020 foreign entities selling software or telecommunication services will be required to charge PST if their BC revenue exceeds $10,000. As part of the new registration requirements, there will also no longer be a requirement that the entity be located in Canada. This change would capture net streaming services (‘Netflix’ tax).
- Effective February 19, 2020, real property contractors who perform value-added work to goods and then install those goods into real property outside of BC can apply for refunds of the PST paid on those goods.
- Starting July 1, 2020, carbonated beverages that contain sugar, natural sweeteners or artificial sweeteners will no longer qualify for a PST exemption.
Full details of the Budget can be viewed here.
For more information on how any of the proposed changes may impact your business or you, contact your Rise Advisor.