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)

Factoring, or collecting trade accounts receivable, from a non-resident is an eligible activity under the IFAA as long as the receivables have been purchased outright and without recourse from the seller.

Benefits and Additional Information

• By registering both factoring activities and administrative support, you can qualify both the front-end and the back-end of the business.
• Activities may be transacted on an arm’s length, non-arm’s length, or affiliated basis.

• 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.

• 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.

Other Reasons to Locate in BC

• As Canada’s trade gateway to the Pacific, British Columbia is uniquely positioned as a factoring location for companies doing business in or wishing to expand into Asia.
• The Provincial government is business friendly. Trade Team BC exists to provide information, programs, and services to companies looking to expand internationally into new export markets.
• The BC port system is the gateway for half of Canada’s maritime exports and 85% of western provincial exports, including coal, forest products, petroleum, petrochemicals, and grain. 

Registering A Business

To be eligible to register under the 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 Branch, Income Taxation Branch. For more information regarding the legislation or provincial registration, please visit their website.

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