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  INFORMATION BULLETIN 

For Immediate Release

2006FIN0204-001208

Oct. 10, 2006

Ministry of Finance

 

PROPOSED DIVIDEND TAX CREDIT RATE ANNOUNCED

 


VICTORIA – British Columbia is releasing details on its Budget 2006 commitment to introduce a new, enhanced dividend tax credit for individuals, Finance Minister Carole Taylor announced today.

 

Subject to legislative approval, the proposed personal income tax credit rate for dividends eligible for the federal enhanced dividend tax credit will be 12 per cent, effective for the 2006 and subsequent tax years.

 

The purpose of the tax credit is to reduce the double taxation of income in the corporate and personal income tax systems. The proposed changes stem from the Government of Canada’s November 2005 proposal to create an enhanced personal income tax credit to help equalize the tax treatment of dividends and other forms of investment. The federal proposal relies on the participation of provinces to provide parallel enhanced dividend tax credits.

 

In Budget 2006, British Columbia announced it would introduce an enhanced dividend tax credit once the federal details were known. The federal government released its draft legislation in support of the new credit in June, which allowed the Province to finalize its design for the tax credit.

 

While the legislation to implement the change will be tabled with the next provincial budget, the Province is announcing additional details at this time to inform British Columbians of the anticipated tax implications and to allow them to make informed investment decisions.

 

For additional details on the Enhanced Dividend Tax Credit, please visit www.fin.gov.bc.ca/scp/tp/edtc.htm online.

 

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Media

contact:

Rob Duffus

Public Affairs Bureau

250 387-5013

 

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