How to File for IBA Refunds – International Patent Business

To receive a tax refund under the International Business Activity (IBA) program, a registered corporation that carries on an international patent business must complete and file an IBA Tax Refund of an International Patent Business (FIN 546) (IBA Return) with the Ministry of Finance within 18 months after the end of the tax year.

A tax refund will be paid to a corporation only if all British Columbia and federal income taxes for the tax year are paid within 3 years after the end of the tax year.

Please see How to Complete the IBA Tax Refund of an International Business for assistance in completing the IBA Return. The IBA Return will be considered complete only if all of the questions are answered and all applicable supporting forms and documentation are provided.

The corporation must notify the Ministry of Finance within 90 days of any income tax reassessment that may impact the calculation of the tax refund. See How to Complete the IBA Tax Refund of an International Business for more information.

Contact us if you have any questions regarding the completion of the return and supporting schedules.

NOTE: In each taxation year, a registered corporation may choose to claim a tax refund for only one type of international business. For more information on the types of international businesses, see About international businesses.

IBA Tax Refund of an International Patent Business (formerly Life Science Corporation)

A registered corporation may claim a tax refund of income taxes on its international patent business calculated as follows:

Tax refund = lesser of:

• $8 million*
• [A/(B x C)] X D X 75% where

• A is the corporation's net income for income tax purposes from its international patent business. IB income** does not include certain dividend income or assistance included in income under Section 12(1) of the Income Tax Act (Canada)
• B is the corporation's net income for income tax purposes, less any net capital losses and dividends deducted in determining the corporation's taxable income for the year
• C is the percentage of taxable income allocated to British Columbia for the tax year
• D is the corporation's British Columbia income tax (after deducting all tax credits and deemed payments).

* For corporations registered for less than 365 days in a tax year, the $8 million limit is prorated based on the number of days registered. The $8 million limit must be shared among associated corporations where each corporation is eligible to claim a tax refund for an international patent business.

**IB income for an international patent business is defined in section 19.02 of the International Business Activity Act (the Act).

Complete and include a Statement of Adjusted IB Income, either Option A (FIN 575) or Option B (FIN 576), as applicable. Adjusted IB income is calculated for an international business for that part of the taxation year that the corporation was a registered corporation. See How to Complete the IBA Tax Refund of an International Business for more information.

IB income – additional rules related to IB Specialist

Section 19.03(2)(b) of the Act requires a corporation to deduct all amounts paid or payable by the corporation as salary, wages or other remuneration or benefits to an IB specialist who was an executive specialist for the part of the year that the IB specialist was registered, whether or not the amounts relate to a particular international business.

For more information on an IB specialist, please see How to File for IBA Refunds - Specialists.