Print This Page

Under the International Financial Activity Act (IFAA), a company, incorporated in Canada with a permanent establishment in British Columbia, can register for up to a 100% refund of its provincial corporate taxes on income from eligible activities.

Qualifying Activities under the International Financial Activity Act (IFAA)

Insurance

• Income derived from insuring or reinsuring prescribed risks, other than life, sickness or accident insurance, for a non-resident person or relating to property or events outside Canada qualifies as an eligible activity.
• Captive insurance companies are exempted from the arm’s length requirement imposed on other insurance companies.

Leasing

• Income derived from leasing property to a non-resident by means of a direct finance lease also qualifies as an international financial activity.

Benefits and Additional Information

• For corporations doing business internationally, establishing an office in British Columbia to conduct qualifying activities can yield substantial savings.
• Income earned by the office on the registered business can qualify for a full refund of corporate taxes paid to the Province of British Columbia.
• Individuals employed by a registered company (IFA Specialists) may also qualify for up to a 75% Provincial Personal Income Tax refund for the first five years of employment.

Other Reasons to Locate in BC

• British Columbia is the only province in Canada that has Captive Insurance Company Legislation. This legislation was enacted in 1987. Currently, seventeen Captive Insurance Companies are registered in BC.
• There are a number of reasons why British Columbia has enjoyed success as a captive domicile. The legislation is relatively flexible; no specific solvency ratios, policy forms, or rate requirements exist. There is also relatively good access to reinsurance markets and considerable latitude in the scope of allowable investments.
• In British Columbia, captives can establish tax deductible loss reserves, which is not possible if losses are retained by a corporation through self-insurance.
• Captives can be used to meet special requirements, fill gaps in claims-made policies, offer additional limits of liability and supplement any restricted forms obtained from the conventional insurance market. For more information on captive insurance in British Columbia, visit the BC Captive Insurance Association website.

Registering A Business

To be eligible to register under the International Financial Activity (IFA) program, a company’s international financial business must be part of an active business and carried on through an office in British Columbia. Further details on the IFA program can be found in Bulletin IFA 001, International Financial Activity Overview.

The IFA program is administered by the BC Ministry of Small Business and Revenue, Revenue Programs Division, Income Taxation Branch. For more information regarding the legislation or provincial registration, please visit their website.