The International Business Activity Act (IBAA)

The International Business Activity Act (IBAA), legislated by the Province of British Columbia in 2004, provides the legislative framework for the IBA program.

  • The IBAA (formerly the International Financial Activity Act), which took effect on September 1, 2004, allows a company, incorporated in Canada with a permanent establishment in British Columbia to claim a refund of up to 100% of its corporate income taxes paid to the Province of British Columbia on qualifying activities. The benefit is limited to 75% of the total BC taxes paid on eligible patent-based income to a maximum of $8 million.
  • The IBAA replaced the International Business (Tax Refund) Act on September 1, 2004.
  • The IBA Program is administered by the BC Ministry of Finance. More detailed information on the IBA program, including qualifying activities, eligibility, calculation of the tax refund, and registration requirements can be found on the website of BC’s Ministry of Finance.

Recent Changes to the IBAA

Schedule III Banks Eligible to Join IBA Program (2011)

  • The province announced that the IBAA will be amended to allow Schedule III banks to qualify for the IBA program with respect to their international financial business. Schedule III banks are branches of foreign banks operating in Canada.

Digital Media, Carbon Credit Trading, and Clean Technology (2010)

  • Legislation was passed in 2010 that expanded the IBA program to include digital media distribution, certification and trading of carbon credits, and clean technology. These are not yet effective

Executive Specialist (2010)

  • The Executive Specialist is a key decision maker in a company registered in the IBA program. The Executive Specialist must have an annual compensation greater than $250,000 and wages must be included in the calculation of IBA income.
  • The Executive Specialist will be entitled to a refund of personal provincial taxes at a rate of 100% in Years 1 and 2, 75% in Year 3, 50% in Year 4, and 25% in Year 5. Learn more about Executive Specialists and the Specialist program.

Short Term Financial Instruments for Corporations (2008)

  • Effective February 20, 2008, corporations can qualify income derived from short-term investments with a non-resident. These include treasury bills issued by a government, commercial paper and bankers’ acceptances. Derivatives do not qualify.

Green-Related Patents (2008 and 2009)

  • Effective February 20, 2008, the list of eligible patents was expanded to include patents with classifications under the International Patent Classification System related to power generation using forces of nature such as wind, solar and tidal. In 2009, the list of eligible patents was expanded to include fuel cell technology and wastewater treatment.

Life Science Patents (2006)

  • Income derived from selected life science patents is eligible for a refund of up to 75% of provincial tax paid on the eligible patent activity to maximum of $8 million. View the list of eligible patents available on the website of the Ministry of Finance.

The International Business Activity Act (IBAA)

  • The legislative framework for the International Business Activity (IBA) program is provided by the IBAA. View the IBAA here.
  • The IBAA (formerly the International Financial Activity Act), which took effect on September 1, 2004, allows a company, incorporated in Canada with a permanent establishment in British Columbia to claim a refund of up to 100% of its corporate income taxes paid to the Province of British Columbia on qualifying activities. The benefit is 75% for patent-based income to a maximum of $8 million. The IBAA replaced the International Business (Tax Refund) Act on September 1, 2004.
  • The IBA Program is administered by the BC Ministry of Finance. More detailed information on the IBA program, including qualifying activities, eligibility, calculation of the tax refund, and registration requirements can be found on the website of B.C.’s Ministry of Finance.

More Information

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.

Did you know?

  • All five of Canada’s largest banks have significant operations in BC.
  • BC has a lower tax rate than Hong Kong and Singapore.
  • The IBA Program includes a personal income tax incentive for international employees.
  • Vancouver is among the top-10 wealth management centres in the world.
  • British Columbia is one of the top two designated financial centres in Canada.