Small-business owners in British Columbia will benefit from a cut to the small-business corporate income tax rate from 2.5 per cent to two per cent, retroactive to April 1, 2017.
The tax cut is part of the Budget Measures Implementation Act, 2017, which passed on Nov. 2. The reduction makes B.C.’s small-business corporate income tax rate the second lowest in Canada, tied with Alberta and Saskatchewan.
“Small business forms the backbone of our economy and we need to do all we can to support its continued growth,” said Jobs, Trade and Technology Minister Bruce Ralston, in a press release. “That’s why we are lowering the small-business corporate income tax rate by 20 per cent, so B.C.’s small-business owners can keep more of their hard-earned revenue and reinvest it back in their communities.”
Credit unions are also benefiting from the passage of the act, with the restoration of the tax benefit for credit unions, retroactive to Jan. 1, 2017. Credit unions will be taxed at lower rates so they have access to more of the credit union’s funds to re-invest into local economies and small businesses.
“This tax reduction will help small-business owners put more of their hard earned income to work inside their business,” said Richard Truscott, Canadian Federation of Independent Business vice-president, B.C. and Alberta. “The relief will enable entrepreneurs to grow their business, create more jobs, and support their local community.”
Small businesses are a critical part of B.C.’s economy, providing stable jobs and adding to sustainable, long-term economic growth throughout the province.
“Encouraging economic growth, and supporting tax fairness for small businesses owners, is always welcome,” said Val Litwin, president and CEO of the BC Chamber of Commerce. “This tax break is positive, and will help reduce operational costs, as well as inspire growth and spur job creation in communities in every region of British Columbia.”