Tax Alerts
Income Tax Rates to Fall in British Columbia
On October 27, 2010, Premier Gordon Campbell announced that income tax rate reductions will apply in 2011.
For individuals, the tax rate for the first two brackets will be reduced as laid out in the chart below. These cuts result in a 15% reduction in the tax rates that apply to these tax brackets.
Personal Income Tax Rates -2011 Tax Year |
Tax bracket |
Current rate |
New rate |
$0 to $36,146 |
5.06% |
4.30% |
$36,146 to $72,293 |
7.70% |
6.525% |
$72,293 to $83,001 |
10.50% |
10.50% |
$83,001 to $100,787 |
12.29% |
12.29% |
Over $100,788 |
14.70% |
14.70% |
According to government calculations, an individual earning $40,000 will save $236 annually and an individual earning $72,293 or more will save $616 annually. For a two-income family earning $120,000, the tax reduction will save them up to $944 annually.
Update: On November 17, 2010, it was announced that the BC Government’s Executive Council has decided to suspend the planned 15 % reduction in personal income tax rates for the first $72,293 of personal income.
There was good news on the corporate income tax front as well, as the Premier confirmed that previously announced corporate income tax reductions will proceed on schedule. The small business income tax rate will fall to 0% by April 1, 2012 and the general corporate income tax rate will fall to 10% on January 1, 2011.
If you have any questions on how these income tax changes will affect you, contact your BDO advisor.
