Patents: Life Sciences and Green Technology Qualifying Activities

Life science and green-related patents qualify for the International Business Activity (IBA) program. Green-related are those related to power generation using forces of nature such as wind, solar and tidal. Wastewater treatment and fuel cell technology were added in 2009.

  • A complete list of eligible patents, defined by IPC code, can be found in the International Business Activity Act Regulations, which can be found by viewing the website of the BC Ministry of Finance.
  • Activities related to these patents are:
    • Selling, assigning, or licensing a prescribed patent to a non-resident.
    • Selling a good or service to a non-resident where the revenue is based on an invention for which a prescribed patent is owned by the corporation.
    • Licensing to a non-resident person includes a joint research and development licensing agreement that is directly related to a patent within an eligible class of patents.
    • A registered corporation may choose to claim a tax refund on a patent activity or another qualifying activity, but not both.

Both the provincial and federal government provide tax credits on scientific research and development through the SR&ED tax credit program. Read about the Canada SR&ED tax credit program and about the B.C. SR&ED tax credit program.

Case Study

  • A Co is a corporation incorporated in Canada with a fixed place of business in British Columbia.
  • A Co has developed a life sciences patent which has an eligible patent classification number assigned in accordance with the International Patent Classification, 8th edition, adopted under the Strasbourg Agreement Concerning the International Patent Classification under Item 5, Section C, Class 07. View the list of eligible patent classes on the website of B.C.’s Ministry of Finance.
  • A Co licenses its life sciences patent to its foreign affiliates.
  • A Co and its foreign affiliates conduct a transfer pricing study to ensure the non-arm’s length license fees are comparable to arm’s length transactions.


Life Sciences


  • A Co is eligible to apply for registration under the International Business Activity Act (IBAA) since it will be carrying on an “international business,” was incorporated in Canada and has a permanent establishment in British Columbia.
  • A Co will be required to become a member of AdvantageBC Society in order to remain registered.
  • A Co is carrying on a qualifying business. If the licensing of the life sciences patent is part of the active business of A Co, then it will be a qualifying business. On the other hand, if the licensing of the life sciences patent is considered to be a separate business whose income is principally income from property, it will also be considered to be a qualifying business.
  • A Co’s business qualifies as international business by means of licensing to non-resident persons a patent, which has been prescribed under the International Business Activity Act Regulation.
  • A Co will be eligible to claim a refund of 75% of its BC corporate income taxes paid up to a maximum of $8 million for each taxation year. (In 2012, B.C. corporate tax is 10%.)

Did you know?

  • All five of Canada’s largest banks have significant operations in BC.
  • British Columbia is one of the top two designated financial centres in Canada.
  • BC has a lower tax rate than Hong Kong and Singapore.
  • BC has some of the lowest corporate taxes in North America.
  • You may be eligible for a refund of BC corporate tax on income from international business activities.