Highlights of the 2017 BC Budget Business Tax Measures
On February 21, 2016, British Columbia’s Minister of Finance, the Honorable Michael de Jong presented the 2017 provincial budget, which has been balanced for the fifth consecutive year and surpluses are anticipated over the next 3 years as follows:
|Fiscal Year||Estimated Surplus|
Amongst the tax measures discussed further below, the 2017 budget also provides for new investments for classrooms, mental health services, support for families, children and those most in need. The budget also cuts Medical Services Plan premiums in half for a majority of British Columbians.
Business Tax Rates
The small business corporate tax rate has been reduced from 2.5% to 2.0%. Effective April 1, 2017, the corporate tax rates will be as follows:
|BC||Combined BC & Federal|
|Taxable income up to $500,000||12%||12.5%|
|Taxable income over $500,000||11%||26%|
Interactive Digital Media Tax Credit (“IDMTC”)
The IDMTC is for eligible registered corporations that develop interactive digital media products in BC. The credit is calculated as 17.5% of eligible salary and wages incurred in the tax year.
Effective for tax years that end on or after February 22, 2017 the IDMTC has been expanded as follows:
• Qualifying BC labour expenses for employment in the development of augmented reality and virtual reality products will be eligible for the IDMTC
• Corporations participating in the small business venture capital program will be eligible for the IDMTC
• Corporations that have annual qualifying BC labour expenses in excess of $2 million and are not in the principal business of the development of digital media products will be eligible for the IDMTC
Regional Film Tax Credit
The film and television tax credit is for eligible corporations that produce eligible film or video productions in BC. For productions with principal photography beginning on or after January 25, 2017, the borders for the Regional Film Tax Credit have been adjusted to include the entire City of Langley and the Township of Langley. This change applies to both the Production Services Tax Credit and the Film Incentive BC Tax Credit.
Business Tax Credits
In addition to the above credits, the following BC tax credit have been extended:
• The SR&ED tax credit has been extended by five years to August 31, 2022
• The training tax credit has been extended by three years to December 31, 2020
• The book publishing tax credit has been extended by two years to March 31, 2019
• The mining flow-through share tax credit has been extended to the end of 2017
PST on Electricity
Effective October 1, 2017, the tax rate on electricity will be reduced to 3.5% (from the current rate of 7%) and then will be fully exempt from PST effective April 1, 2019. Residential electricity is already exempt from PST so this measure will only apply to corporations.
For information on how these changes may impact you, please contact us at 604-936-4377, or send us an email at email@example.com.