KPMP TaxNewsFlash, May 25, 2011
British Columbia’s Finance Minister announced today that the province plans to reduce its harmonized sales tax rate to 10% (from 12%) in two stages to take effect July 1, 2012 and July 1, 2014. The province will also increase its general corporate income tax rate to 12% (from 10%), effective January 1, 2012.
B.C. Finance says the provincial portion of the HST will be reduced to 6% (from 7%), effective July 1, 2012. The second reduction to 5% (from 6%) will take effect on July 1, 2014. As a result, B.C. will continue to have one of the lowest sales tax rates across Canada.
Along with the increase to its general corporate tax rate, B.C. will postpone the reduction to its small business tax rate planned for April 1, 2012. According to B.C. Finance, these measures would be temporary “until the fiscal situation allows for further reductions”.
The proposed changes to the HST will only take effect should British Columbians vote to keep the HST. The referendum’s mail-in ballots must be returned to the B.C. government by July 22, 2011.
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Information is current to May 25, 2011. The information contained in this TaxNewsFlash-Canada is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG’s National Tax Centre at 416.777.8500.