Tax Incentives for Employees: The Executive Specialist

A company in the International Business Activity (IBA) program can apply to register a key decision maker as an Executive Specialist

Executive Specialist

  • The individual must be a member of the executive management of the corporation.
  • The individual has entered into a written contract that requires the individual to work in the international business of the corporation.
  • The individual must have been non-resident before entering into the contract, or must have previously been an IB specialist.
  • The individual must have been a non-resident of Canada at the end of the year before the year of application.
  • The individual must enter into the written employment contract on or after March 3, 2010.
  • The individual, and any person related to the individual, must deal at arm’s length with the registered corporation.
  • There is no requirement for executive specialists to devote a certain per cent of their time to the international business of the corporation. However, a corporation may only apply to register a maximum of two executive specialists for the corporation, including all affiliated corporations.
  • The employee’s annual compensation must be greater than $250,000. (Compensation is salaries, wages, commissions, and other remuneration, but does not include any amount described in section 7 (employee stock options) of the Income Tax Act (Canada)).
  • Patent activities qualify.

The Refund

  • The employer of the Specialist must first register the company with the BC Ministry of Finance in the IBA program in order for the individual to be eligible for the tax refund.
  • A refund is paid only after all British Columbia and federal income taxes for the taxation year are paid.
  • Returns must be filed within 18 months of the end of the taxation year.

Did you know?

  • BC has a lower tax rate than Hong Kong and Singapore.
  • The IBA Program includes a personal income tax incentive for international employees.
  • 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.
  • Vancouver is among the top-10 wealth management centres in the world.