Patent Activity

Life science and green-related patents qualify. Green-related are those related to power generation using forces of nature such as wind, solar and tidal. Wastewater treatment and fuel cell technology were added in 2009.

• By establishing an international business (IB) in British Columbia, a company can receive a refund of 75% of the British Columbia taxes paid on the net income of the IB to a maximum of $8 million. 
• Companies can register a business or part of a business in the International Business (IB) program. For income to qualify for the refund, one side of the transaction must be with a non-resident.
• The International Business Activity Act (IBAA), legislated by the Province of British Columbia in 2004, provides the legislative framework for the tax incentive program.

Qualifying Activities

• The two general areas qualified are life science patents and green-related.
• Green related patents are those related to power generation using forces of nature such as wind, solar and tidal. In 2009, fuel cell technology and wastewater were added to the list of eligible patents.
• A complete list of eligible patents, defined by IPC code, can be found on the website of the BC Ministry of Finance (formerly the BC Ministry of Small Business and Revenue). 
• Activities related to these patents are:
• Selling, assigning, or licensing a prescribed patent to a non-resident.
• Selling a good or service to a non-resident where the revenue is based on an invention for which a prescribed patent is owned by the corporation.
• The IBAA was clarified further in 2010 to specify that international business income includes all income related to the license of a qualifying patent.
• A registered corporation may choose to claim a tax refund on either a life science patent activity or another qualifying activity, but not both.

Benefits

• B.C. government has invested in R&D of more than $1.6 billion since 2001. The $90 million B.C. Renaissance Capital Fund provides additional funding for early stage ventures in biotechnology and other high-technology sectors.
• The Government of Canada is providing $60 million in funding for four new centres of excellence in commercialization and research in B.C. – three in life sciences, and the fourth in an area that includes some life science-related applications.
• The life sciences industry in British Columbia includes about 100 biopharmaceutical companies, 60 medical device manufacturing and distribution companies, and 30 bio products companies. Biopharmaceutical companies account for about 2,200 of the total employment of 2,700.
• Biopharmaceuticals generate roughly $800 million per year in revenues. Greater Vancouver is home to about 70 per cent of the B.C. life sciences industry and has a strong complement of established and next generation firms (VEDC, 2010).

Registering an IB

Further details on patent activity as it relates to the IB program can be found in Bulletin IFA 002, International Business Activity.

The tax incentive 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 IBAA should consult with their professional advisors on the applicability of the IBAA legislation to their particular circumstance.

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