AdvantageBC promotes a British Columbia tax incentive available under the International Business Activity (IBA) Program, which can be applied to qualifying international business activities conducted in B.C. by a corporation registered under the program. The tax incentive is a refund of up to 100% of the B.C. taxes paid on the qualifying international business activities (75% for patent activities). It can result in an effective corporate income tax rate in Canada of 15% on qualifying international activities.
B.C.’s Tax Advantage
- The corporate income tax rate in B.C. is 11% for 2013 and is among the lowest in Canada. Combined with the federal rate, B.C. businesses pay a corporate income tax rate of only 26% – among the lowest in the G7.
- The IBA program provides for a full refund (75% for patent activities) of B.C. corporate income tax paid in respect of qualifying international activities resulting in an effective tax rate of 15% (17.75% for patent activities)
- Foreign individuals who transfer to work in the qualifying activities may claim a refund of B.C. personal tax on qualifying employment income. The refund is 100% in Years 1 and 2; 75% in Year 3; 50% in Year 4; and 25% in Year 5.
- Vancouver ranked #2 with the lowest tax index out of the 55 major international cities studied as part of KPMG’s Competitive Alternatives 2012.
Who Can benefit?
Any company incorporated in Canada and conducting international business from B.C. may potentially qualify for the program. Many of the companies currently benefitting from the program include:
- Banks and credit unions
- Investment/Asset management firms
- Large exporters • Life sciences companies • Film & TV distributors
What Activities Qualify?
Activities that qualify for the IBA Program can be both financial and non- financial in nature; one side of the transaction is generally with a non-resident. The major international activities include:
- Foreign exchange;
- Trade nance for export;
- Factoring of foreign accounts receivable;
- Investment management;
- Administrative support to a nancial activity;
- Pharmaceuticals and medical devices under patent;
- Proceeds from patents for pharmaceuti- cals, medical devices, clean energy (wind, solar and tidal), fuel cell technology and waste water treatment;
- Film and television distribution;
- Captive insurance;
- Financial advice and research.
- Vancouver ranked #15 globally as a financial centre in the March 2013 Global Financial Centre Index, published by Z/Yen.
- Businesses can incorporate in just a few hours. A company registered in B.C. can have as few as one director, and its directors do not need to meet any residency requirement.
- B.C.’s educational, transportation and telecommunications infrastructures are among the most modern in the world.
- B.C.’s location on the west coast of North America makes it possible to do business with Asia, Europe and North America in the same business day.
- B.C. benefits from economic, political and social stability and offers a friendly business climate, special immigration rules for business investment, and a strong regulatory financial services sector.
- The Mercer Human Resource Consulting’s 2012 Quality of Living Survey ranks Vancouver first in North America and fifth worldwide for quality of life.
- B.C. offers a highly educated, culturally diverse and multilingual workforce, with 65% of the employment pool having some post-secondary training.
- Vancouver International Airport is Canada’s 2nd largest airport and is serviced by 68 airlines connecting people and businesses globally.