On Feb. 18, 2020, British Columbia Finance Minister Carole presented the province’s fiscal 2020–21 budget. The minister anticipates a surplus for the next 3 years ($203 million for 2020 and projects surpluses of $227 million for 2021 and $179 million for 2022).
There are no changes to the corporate income tax rates. But the budget does introduce a new provincial tax bracket for the province’s top 1% of earners.
Taxable income over $220,000 will now be taxed at 20.5%. Our tax analysts have reviewed the budget updates and listed the highlights below.
New tax bracket for high-income earners
The budget proposes adding a new bracket for income above $220,000 at a rate of 20.5%.
Note: There were no changes for 2018/19. As a result, B.C.’s personal income tax rates effective January 1, 2020 are as follows:
The charitable donation tax credit will also increase to 20.5% for charitable donations over $200 for taxpayers in the new bracket.
The 2019/2020 British Columbia personal tax rates are summarized as follows:
B.C. non-refundable tax credits
The government confirmed that personal tax credits for 2020 will be indexed by 1.026%.
The maximum tax credit amounts and actual BC tax credits for 2019 and 2020 are set out below:
Corporate income tax rates
No changes are proposed to the corporate tax rates or the $500,000 small business limit.
B.C.'s 2020 corporate tax rates are summarized as follows:
Other budget measures
Farmers' food donation tax credit
The budget extends the farmers’ food donation tax credit to the end of 2023 (from 2020). Farmers who donate agricultural products to registered charities are eligible for this tax credit.
Training tax credit
Do you employ an apprentice enrolled in an apprenticeship program? You are eligible for a refundable income tax credit. The budget extends the training tax credit for three years from 2019 to the end of 2022.
PST refund for real property contractors
If you're a real property contractor who performs value-added work to goods and installs them into real property outside B.C., you can apply for refunds of PST paid on those goods.
Carbonated beverages are now PST-taxable
Effective July 1, 2020, carbonated beverages containing sugar, natural or artificial sweeteners no longer qualify for the PST exemption for food products for human consumption. PST will also apply to all beverages that are dispensed through soda fountains, soda guns and vending machines (except vending machines that dispense coffee or water).
Disclaimer: The material above is provided for educational and informational purposes only. Always consult a tax professional like FBC regarding your specific tax situation.