Reference to the CFA’s Advocacy Update from October 20, 2022

The BC government is expanding access to the small business tax rate in British Columbia.

Previously, access to the small business tax rate was gradually reduced when the taxable capital of businesses was more than $10 million. Access to the small business tax rate ended when businesses had $15 million or more of taxable capital. With the change, access to the small business tax rate will be gradually reduced when businesses have between $10 million and $50 million in taxable capital.

Growing B.C. businesses will be able to scale up by remaining eligible for the B.C. small business tax rate for longer, as the tax rate will not phase out until the $50-million taxable capital threshold ceiling. The change will benefit a wide range of businesses but will largely support those that are capital intensive.

This includes businesses that have taxable capital between $10 million and $15 million, where business owners may decide not to invest in their business to acquire new equipment in order to keep access to the small business tax rate. This may look like a company, such as a craft brewery, considering adding a production line to its operations, or a company needing to buy specialized equipment, such as a computer numerical control (CNC) machine.

The new, higher taxable capital ceiling will apply to taxation years that begin on or after April 7, 2022, which aligns with the federal approach, once passed.

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