The BC government released the 2023 Budget on February 28, 2023. The budget did not include any changes to the B.C. corporate or personal income tax rates, which remain as follows:
|Personal Tax Rates (Combined B.C. and Federal)|
|Interest and regular income||53.50%|
|Corporate Tax Rates (Combined B.C. and Federal)|
|Small business tax rates||General corporate tax rate||Investment income|
This budget introduces the Renter’s Tax Credit, increases the B.C. Climate Action Tax Credit, and amends the provincial sales tax rules for online marketplace facilitators and services. Some of the highlights are noted below:
Corporate and Personal Income Tax:
- The budget introduces a new refundable Renter’s Tax Credit, effective January 1, 2023. Under this credit, households with adjusted income of up to $60,000 that rent and occupy a living accommodation in the province for at least six months in a calendar year can claim the maximum amount of $400 per year. The credit is gradually reduced where adjusted income exceeds $60,000, reaching zero when adjusted income is $80,000, based on the 2023 taxation year.
- The Farmer’s Food Donation Tax Credit, which is also available to individuals, has been extended to the end of 2026.
- The Interactive Digital Media Tax Credit has been extended to August 31, 2028.
- The budget increases the maximum annual B.C. Family Benefit to $1,750 for a family’s first child, $1,100 for a second child, and $900 for each subsequent child, effective July 1, 2023. The maximum annual benefit is phased out for families with adjusted family net income over $27,354.
- Increase of the annual Climate Action Tax Credit to $447 for an adult and $223.50 for a spouse or common-law partner, and to $111.50 per child, effective July 1, 2023.
Provincial Sales Tax:
- The budget amends the collection obligations of online marketplace facilitators and the taxation of online marketplace services, effective July 1, 2023. Specifically, online marketplace services are taxable when an online marketplace facilitator provides the online service to facilitate the sale or provision of non-taxable services.
Other Tax Changes:
- The budget exempts new purpose-built rental buildings from the further 2% property transfer tax applied to the fair market value of the residential component of a taxable transaction that exceeds $3 million, effective for transactions that occur on or after January 1, 2024.
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.
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