September 11, 2017 admin

NDP’s BC Budget Update

The new NDP Government of British Columbia just announced its first Provincial Budget.  The budget included changes to tax rates, among other things.  Please take note of the following tax increases effective 2018:


Increase in personal income tax rate:

  • Effective for 2018 and subsequent years, tax rate increases to 16.8% from 14.7% on taxable income exceeding $150,000.
  • The combined federal and provincial personal income tax rate, applicable to those who earn in excess of the federal top tax bracket ($202,800 in 2017, to be indexed for 2018) will be 49.80% on every dollar earned thereafter up from 47.7% in 2017.


Increase in eligible dividend tax credit:

British Columbia provides a dividend tax credit to prevent double taxation of dividend income that is subject to corporate level taxation. As a result of increasing the general corporate rate (discussed below), the budget update increases the dividend tax credit accordingly.


Increase in general corporate income tax rate:  

  • Effective January 1, 2018 corporations earning income subject to the general tax rate will pay provincial tax at a rate of 12%, increasing from 11%. This is the effective tax rate without the $500k Small Bus Deduction.
  • Corporations that do not have a calendar year-end will have a blended rate based on the number of days in each calendar year.
  • This brings the combined statutory federal and provincial general tax rates for income taxable in BC to 27% from 26%.


If you have any questions on how these changes could affect you or your corporation, please call our office and speak with our Tax Partners Jamie Nguyen, Annelie Vistica or Les Fabian at 604-687-0947.