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For Corporations: The International Financial Activity Act (IFAA)

The IFAA provides the legislative framework for the International Financial Activity (IFA) program. The IFAA, which took effect on September 1, 2004, allows a company, incorporated in Canada with a permanent establishment in British Columbia, to register for a refund of up to 100% of its corporate income taxes paid to the Province of British Columbia on qualifying activities.

• The IFA program is administered by the BC Ministry of Small Business and Revenue, Revenue Programs Division, Income Taxation Branch. A complete copy of the IFAA and its regulations and amendments is available on the International Financial Activity Legislation page on the website of the BC Ministry of Small Business and Revenue.
• More detailed information on the IFA program, including qualifying activities, eligibility, calculation of the tax refund, and registration requirements can be found in Bulletin IFA 001, International Financial Activity Overview.
• The IFAA replaces the International Financial Business (Tax Refund) Act, effective September 1, 2004. Information on the previous program can be found on the website of the BC Ministry of Small Business and Revenue.

Recent Changes to the IFAA

Head Office Activities Added (2008)

Management services directly related to the business operations of a non-resident are eligible as international financial activities. These include strategic management services provided by the head office of the corporation and human resource services provided by the head office of the corporation, such as payroll, benefit management, recruiting and selections, and training and development.

Short Term Financial Instruments Allowed for All Corporations (2008)

Corporations can include income derived from trading money market investments with a non-resident. These include treasury bills issued by a government, commercial paper and bankers’ acceptances.

Hedging Activities (2008)

Non-securities companies can include income or loss from certain hedging transactions in determining income.

Green-Related Patents (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.

Life Science Patents (2006)

Income derived selected life science patents is eligible for a refund of up to 75% of provincial tax paid on the eliible patent activity. More information can be found in Bulletin IFA 002, Life Science Patents.