Small Business and Revenue - International Financial Activity

How to File

Under the International Financial Activity program, a tax refund will be paid to a corporation only after all B.C. and federal income taxes for the tax year are paid.

To receive a tax refund, a qualifying corporation should file a return with the Ministry of Small Business and Revenue within 18 months of the end of their tax year.

Corporations must complete and submit either an IFA Tax Refund of a Life Science Corporation (FIN 546) or an IFA Tax Refund of a Corporation form (FIN 578) and the accompanying schedules.

Please consult the Guide to Filing Out Either the Tax Refund of a Corporation or the IFA Tax Refund of a Life Science Corporation (FIN 546/578G) for assistance in completing the return. Each return contains a list of documents that must be attached by the corporation.

The corporation must notify the ministry within 90 days of any income tax reassessment that may impact the calculation of the tax refund.

Calculation of the Tax Refund

NOTE: In each taxation year, a registered corporation may choose to claim a tax refund either on its patent activity or its other eligible activities, but not both.

IFA Tax Refund of a Life Science Corporation

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

Tax refund = lesser of:

$8 million

[A/(B*C)] * D x 75% where

A is the corporation's net income for income tax purposes from its patent activities of its International Financial Business (IFB). The IFB income does not include assistance included in income under section 12(1)(x) 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 B.C. 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.

For tax years that began before January 1, 2006, the $8 million limit is to be prorated for the number of days registered after December 31, 2005. The $8 million limit must be shared among associated corporations eligible to claim a tax refund on patent activities.

IFA Tax Refund of a Corporation (other than a Life Science Corporation)

A registered corporation may claim a refund of income taxes on all other activities other than patent activities, calculated as follows:

Tax refund = [A/(B*C)] * D where

A is the corporation's net income for income tax purposes from its International Financial Business (IFB). The IFB income does not include 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 B.C. income tax (after deducting all tax credits and deemed payments)

Please see our Forms page for the forms required to file for an IFA refund.

If you are an IFA specialist, please see our How to File page under Individuals > Income Taxes > International Financial Activity.