Refund of up to 100% of BC taxes paid on qualifying international business activities.
International Business Activity (IBA) Program
AdvantageBC promotes a unique British Columbia tax incentive available under the International Business Activity (IBA) Program, which can be applied to qualifying international business activities conducted in BC by a corporation registered under the program.
The tax incentive is a refund of up to 100% of the BC taxes paid on qualifying international business activities (75% for patent activities). It can result in an effective corporate income tax rate of 15% – lower than Hong Kong’s 16.5% tax rate and lower than Singapore’s 17.5% tax rate.
The program is focused on international business conducted from BC and is well suited for businesses including:
- Large Exporters
- Banking and Financial Services
- Wealth and Asset management
- Life Sciences and International Patent Activities
- Film and Television Distribution
Tax Incentives for Employees: International Business (IB) Specialists
The Program also includes a personal income tax incentive for international employees. A registered corporation in the IBA program can also apply to register employees as IB Specialists or Executive Specialists. Specialists qualify for a refund of Provincial personal income tax at the rate of 100% for Years 1 and 2; 75% for Year 3; 50% for Year 4; and 25% for Year 5.
Among the World’s Lowest Corporate Tax Rates
British Columbia’s Tax Advantages
- British Columbia has no capital tax.
- British Columbia’s corporate tax rate is 11% (2015)
- A number of major personal income tax reductions have also been enacted in British Columbia, reducing income tax rates by 40% since 2001. As a result, British Columbia has the lowest personal income tax rates in Canada for incomes up to $120,000.
Canada’s Tax Advantages
- Over the past eight years, the Federal government has reduced corporate tax rates in Canada by 30%. The most recent reduction was announced in 2007: the federal corporate tax rate was reduced to 15% in 2012.
- Other measures undertaken by Canada to improve the business environment:
- The corporate surtax was eliminated for all corporations January 1, 2008.
- The federal capital tax on large corporations was eliminated January 1, 2006.
- Eligible arm’s length interest payments are not be subject to domestic withholding tax as of January 1, 2008.
- Eligible corporations can report their income for Canadian tax purposes in a functional currency other than the Canadian dollar.
Vancouver ranked 1st globally for corporate services out of 55 major international cities; KPMG’s 2014 Competitive Alternatives Report on Tax.
The Special Report: Focus on Tax 2014, part of KPMG’s Competitive Alternatives 2014 report, ranked 55 major cities in terms of a Total Tax Index (TTI), which includes corporate income taxes, capital taxes, sales taxes, property taxes, miscellaneous local business taxes, and statutory labour costs. The TTI is expressed as a percentage of total taxes paid by corporations in the United States (the U.S. has a TTI of 100.0), so a lower score means lower taxes relative to the U.S.
Canada ranked number 1, with a Total Tax Index (TTI) of 53.6, which is 46.4 percent lower than the United States at a TTI of 100.
Vancouver has a TTI of 54.5 across all four business sectors – Digital, R&D, Manufacturing and ranks 1st across all cities for Corporate Services.
KPMG’s Competitive Alternatives 2014 report and its Special Report: Focus on Tax are available here.
The International Business Activity (IBA) program is administered by the BC Ministry of Finance. For more information regarding the legislation or provincial registration, please visit their website. The information on this website is provided for convenience and guidance only and is not a replacement for the legislation. Businesses considering accessing the benefits under the International Business Activity Act should consult with their professional advisors on the applicability of the legislation to their particular circumstances.