- Corporate Income Taxes – No changes proposed to the BC corporate income tax rates or the $500,000 small business deduction. Small Business Rate = 2%; General Rate = 12% for 2018 & 2019.
- Employer Health Tax – starting in calendar year 2019, the government will implement an employer health tax of 1.95% on payrolls of $500,000 or more. Payrolls between $500,000 and $1.5 million will phase in gradually.
- Mining Flow-Through Share Tax Credit – extended for one year to end of 2018.
- Interactive Digital Media Tax Credit – extended for five years to August 31, 2023.
- Personal Income Tax Rates – no further adjustments to personal tax rates proposed. Combined Federal and B.C. top personal tax rate on ordinary income above $205,842 set at 49.8%; capital gains – 24.9%; eligible dividends – 34.2%; ineligible dividends – 43.73%.
- Medical Service Plan premiums – to be eliminated effective January 1, 2020.
- Personal Tax Credits: Caregiver Tax Credit – effective 2018, caregiver tax credit and infirm dependent tax credit are replaced with a new B.C. caregiver credit to parallel federal caregiver credit announced 2017.
- Provincial Sales Tax: Luxury Cars – effective April 1, 2018, luxury surcharge on passenger cars increased from 10% to 15% on sales between $125,000 and $149,999 with the rate increasing from 10% to 20% on vehicles sold for $150,000 or more.
- Property Transfer Tax – effective February 21, 2018, increase of 2% to the tax rate on the fair market value that exceeds $3 million, resulting in a total of 5% tax for the portion above the threshold. Property tax paid by foreign entities also increased from 15% to 20% with an expansion of the tax to areas of central and southern interior of B.C.
- New Speculation Tax – the government will introduce legislation in 2018 to implement a speculation tax on residential property in B.C. The target will be foreign and domestic homeowners with high worldwide income yet do not pay income tax in B.C. Annual tax rate will be 0.5% of assessed value in 2018 and 2% in 2019 and subsequent, for regions of Metro Vancouver, Fraser Valley, Nanaimo Regional District, Kelowna and West Kelowna.
If you have any questions or would like to speak with one of our tax professionals, call us at 604-687-0947.
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. Please contact our tax group if you have any questions on the impact of these proposed changes.