June 27, 2013 British Columbia budget: Tax highlights

Issue 2013-04

266 KB Download the budget highlights as a PDF file.

In brief

On Thursday, June 27, 2013, British Columbia’s Minister of Finance, the Honourable Michael de Jong, introduced the province’s post-election budget.

In detail

Previously announced measures

The June 27, 2013 budget reintroduces all the tax measures proposed in the province’s February 19, 2013 budget. For details, see our Tax memo ‘2013 British Columbia budget: Tax highlights’ at www.pwc.com/ca/budget.

Top personal tax rates

As a result of BC’s June 27 budget and the March 21, 2013 federal budget, top combined federal/BC rates will increase as shown in the table.

 

2012-2013

2014-2015

Ordinary income & interest 43.70% 45.80%
Capital gains 21.85% 22.90%
Canadian dividends - eligible 25.78% 28.68%
Canadian dividends - non-eligible 33.71% 37.99%1

1The 2013 federal budget increases the rate on non-eligible dividends starting 2014. See our Tax memo ‘2013 Federal budget: Staying the course’ at www.pwc.com/ca/budget.

New measures

The June 27 budget also proposes that:

  • BC’s personal charitable donations tax credit rate for annual donations over $200 will remain at 14.70% for 2014 and 2015 (i.e. the rate will not increase to match the top provincial personal income tax rate of 16.80% for those years)
  • the provincial sales tax transitional rules for legal services, related services and telecommunication services will be clarified, effective April 1, 2013
  • the carbon tax exemption for farmers proposed in the February 19, 2013 budget will apply to coloured gasoline and coloured diesel fuel purchased for the same farm purposes that farmers are authorized to use coloured fuel under the Motor Fuel Tax Act

Bill 2, Budget Measures Implementation Act, 2013

The increase in BC’s general corporate income tax rate (which also applies to manufacturing and processing income) from 10% to 11% on April 1, 2013, is implemented by Bill 2, Budget Measures Implementation Act, 2013, which received first reading on June 27, 2013.

Therefore this rate change is considered substantively enacted for Canadian GAAP as of June 27, 2013, but it is not yet enacted for US GAAP.