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B.C. Reg. 327/2004
O.C. 704/2004
Deposited July 8, 2004
effective September 1, 2004
This consolidation is current to August 9, 2022.
Link to consolidated regulation (PDF)
Link to Point in Time

International Business Activity Act

International Business Activity Regulation

[includes amendments up to B.C. Reg. 23/2018, September 12, 2017]

Contents
1Definitions
1.1Definition of qualifying business
2Registration fee
3Interest on tax refunds, refundable fees and recoverable amounts
4International financial activity
5International financial activity — patents
6Foreign currency transaction
7Registration of administrative support specialists and executive specialists

Definitions

1   (1) In this regulation:

"Act" means the International Business Activity Act;

"active business" has the same meaning as in section 248 (1) of the federal Act;

"eligible class of patents" means a class of patents referred to in section 5;

"salary and wages" does not include remuneration that is the following:

(a) profits;

(b) bonuses;

(c) amounts described in section 6 or 7 of the federal Act;

(d) amounts deemed to be incurred under section 78 (4) of the federal Act.

(2) In the Act and this regulation:

"designated international business" means an international film distribution business;

"international film distribution business" in relation to a corporation means a business carried on by the corporation through a fixed place of business in British Columbia, all of the revenue of which is derived from one or more of the following transactions:

(a) selling, assigning or licensing rights to a non-resident person to distribute outside Canada a film or television production, other than a production that is pornography;

(b) selling, assigning or licensing rights to a non-resident person to exploit outside Canada any thing related to the production;

"international patent business" in relation to a corporation means a business carried on by the corporation through a fixed place of business in British Columbia, all of the revenue of which is derived from one or more of the following transactions:

(a) selling, assigning or licensing, to a non-resident person, a patent within an eligible class of patents;

(b) selling, to a non-resident person, a good or service in respect of which the sales revenue is principally derived from an invention for which a patent within an eligible class of patents is owned by the corporation;

"qualifying transaction" means a transaction the revenue of which is derived from an international business, other than an international financial business;

(3) For the purposes of paragraph (a) of the definition of "international patent business" in subsection (2), licensing includes a joint research and development licensing agreement that is directly related to a patent within an eligible class of patents.

(4) In section 21 (7) and (8) of the Act, "remuneration" means

(a) salaries,

(b) wages,

(c) commissions, and

(d) other remuneration,

but does not include an amount described in section 7 of the federal Act.

[en. B.C. Reg. 138/2008, s. 1; am. B.C. Reg. 188/2010, s. 2.]

Definition of qualifying business

1.1   (1) In the Act, "qualifying financial business", in relation to a corporation, means

(a) an active business carried on by the corporation,

(b) a business carried on by the corporation

(i) that is separate from another business that is an active business carried on by the corporation,

(ii) for which the income or loss of the business is principally income or loss from a source that is property, and

(iii) for which the income or loss of the business does not include the income or loss from any source that is property that

(A) is incident to the active business carried on by the corporation, or

(B) is used or held principally for the purpose of gaining or producing income from the active business carried on by the corporation, or

(c) a business carried on by the corporation if that corporation

(i) is affiliated with or not dealing at arm's length with another corporation that carries on an active business,

(ii) at the particular time for the purposes of this Act, has capital employed in British Columbia in an amount equal to or greater than $10 000 000, and

(iii) for the particular taxation year, paid salary and wages to employees of the corporation employed in the active conduct of the business in British Columbia in an amount equal to or greater than

(A) subject to clauses (B) and (C), $300 000,

(B) if the taxation year is less than 365 days and does not include September 11, 2017, the amount that is that proportion of $300 000 that the number of days in the taxation year bears to 365, or

(C) if the taxation year includes September 11, 2017, the amount that is that proportion of $300 000 that the number of days in the taxation year before September 12, 2017 bears to 365.

(2) For the purposes of the definition of "qualifying financial business", the amount of capital employed in British Columbia is the amount calculated by the following formula:

amount = total capital xBC taxable income

federal taxable income
where
total capital = the total capital stock of the corporation;
BC taxable income = the corporation's taxable income earned in the year in British Columbia, as defined in section 13.3 [definitions — corporation income tax] of the Income Tax Act, for the taxation year;
federal taxable income = the corporation's taxable income, as defined in section 248 (1) of the federal Act, for the taxation year.

[en. B.C. Reg. 138/2008, s. 1; am. B.C. Regs. 188/2010, s. 3; 23/2018.]

Registration fee

2   (1) For the purposes of section 9 (2) (c) of the Act, the prescribed fee is $5 000.

(2) The prescribed amount of the fee in subsection (1) that is non-refundable if registration is refused is $1 000.

Interest on tax refunds, refundable fees and recoverable amounts

3   (1) Interest payable under sections 33 (2) and (3) and 35 (2) of the Act must be calculated on a daily basis and compounded monthly.

(2) For the purposes of section 33 (2) and (3) of the Act, the rate of interest prescribed is, during each successive 3 month period beginning on January 1, April 1, July 1 and October 1 in every year, 2% below the prime lending rate of the principal banker to the Province on the 15th day of the month immediately preceding that 3 month period.

(3) For the purposes of section 35 (2) of the Act, the rate of interest prescribed is, during each successive 3 month period beginning on January 1, April 1, July 1 and October 1 in every year, 3% above the prime lending rate of the principal banker to the Province on the 15th day of the month immediately preceding that 3 month period.

International financial activity

4   (1) Repealed. [B.C. Reg. 188/2010, s. 4 (a).]

(2) In subsection (2.1), "debt securities" and "derivatives" have the same meaning as in the Handbook of The Canadian Institute of Chartered Accountants, as it read on February 19, 2008.

(2.1) For the purposes of section 2 (2) (g) (ii) of the Act, prescribed securities are short term debt securities other than derivatives.

(3) For the purposes of section 2 (2) (h) of the Act, prescribed risks are any risks that fall within any class of insurance defined under the Insurance Act, except life, sickness or accident insurance.

(4) For the purposes of section 2 (2) (i) of the Act, prescribed financial advice is legal, accounting or tax advice provided by a corporation in the business of providing that advice.

(5) For the purposes of section 2 (2) (n) of the Act, prescribed financial research is legal, accounting or tax research provided by a corporation in the business of providing that research.

(6) Repealed. [B.C. Reg. 188/2010, s. 4 (a).]

(7) For the purposes of section 2 (2) (r) of the Act, the following are prescribed administrative support services:

(a) call centres;

(b) marketing;

(c) advertising.

(7.1) Repealed. [B.C. Reg. 188/2010, s. 4 (a).]

(8) For the purposes of section 2 (2) (t) of the Act, the following are prescribed financial activities of a corporation:

(a) with respect to a corporation that is a savings institution, acting

(i) as trustee of a trust that, at all relevant times, is non-resident,

(ii) as an executor or administrator of the estate of a non-resident person, all the beneficiaries of which are at all relevant times non-residents,

(iii) as guardian of a minor's estate if the minor is non-resident, or

(iv) as committee of the estate of a mentally incompetent person who is non-resident;

(b) with respect to a corporation that is a savings institution or a corporation affiliated with a savings institution, providing services

(i) to a non-resident person in respect of the Immigration and Refugee Protection Act (Canada), or

(ii) to a non-resident person in respect of that person

(A) seeking leave to enter the United Kingdom as an investor,

(B) seeking an extension of stay in the United Kingdom as an investor, or

(C) seeking indefinite leave to remain in the United Kingdom as an investor.

(9) For the purposes of section 2 (2) (t) of the Act, collecting trade accounts receivable from non-resident persons is a prescribed financial activity of a corporation.

[en. B.C. Reg. 528/2004; am. B.C. Regs. 210/2006; 138/2008, s. 2; 186/2008, s. 1; 188/2010, s. 4; 370/2012.]

International financial activity — patents

5   (1) For the purposes of the definition of "international patent business", the eligible class of patents is those patents

(a) whose terms have not expired or that have not otherwise ceased to be in force, and

(b) that have a primary classification number, assigned in accordance with the International Patent Classification, 8th edition, adopted under the Strasbourg Agreement Concerning the International Patent Classification, set out in the following table:

 Column 1Column 2Column 3Column 4
 International Patent Classification
ItemSectionClass(es)Subclass(es)Group(s)
1A01H 
2A01N1/00, 1/02
and 3/00
3A61  
4C02F3/00, 9/00, 9/02,
9/04, 9/06, 9/08,
9/10, 9/12
and 9/14
5C07 and 08  
6C12M, N,
P and Q
 
7C12S3/00, 3/20,
3/22 and 3/24
7.1E02B9/08
7.2F03B13/06, 13/08,
13/10, 13/12,
13/14, 13/16,
13/18, 13/20,
13/22, 13/24 and
13/26
7.3F03D 
7.4F03G4/00 and 6/00
7.5F24J2/00 and 3/00
8G01N33/02, 33/03,
33/04, 33/08,
33/12, 33/15,
33/48, 33/483,
33/487, 33/49,
33/493, 33/497
and 33/50
9H01L31/04
10H01M8/08, 8/10,
8/12, 8/14,
8/16, 8/18,
8/20 and 8/22

(2) As an exception to subsection (1), the eligible class of patents does not include a patent relating to tobacco or any product made of tobacco other than a product that purports to assist a person to cease using tobacco.

(3) For the purposes of reading the table set out in subsection (1), if for an Item one or more of the columns describing the Subclass or Group is blank, then the entire Subclass or Group is included in the respective Class or Subclass.

[en. B.C. Reg. 40/2006; am. B.C. Regs. 186/2008, s. 2; 78/2009; 188/2010, s. 5.]

Foreign currency transaction

6   (1) For the purposes of paragraph (b) of the description of "IB income" in section 19 of the Act, a prescribed foreign currency agreement is an agreement that

(a) provides for the purchase, sale or exchange of currency by the international financial business, and

(b) can reasonably be considered to have been made by the international financial business of the corporation to reduce its risk of fluctuations in the value of the currency in which an amount is denominated, if the amount is an asset or liability of the international financial business and is incident to an international financial activity referred to in the applicable section.

(2) For the purposes of paragraph (b) of the description of "IB income" in sections 19.01 and 19.02 of the Act, a prescribed foreign currency agreement is an agreement that

(a) provides for the purchase, sale or exchange of currency by the international business, and

(b) can reasonably be considered to have been made by the international business of the corporation to reduce its risk of fluctuations in the value of the currency in which an amount is denominated, if the amount is an asset or liability of the international business and is incident to a qualifying transaction referred to in the applicable section.

[en. B.C. Reg. 188/2010, s. 6.]

Registration of administrative support specialists and executive specialists

7   In addition to the other requirements of sections 13.1 or 13.2 of the Act, the following requirements apply to an individual referred to in those sections:

(a) the individual must have been non-resident at the end of the individual's taxation year preceding the year of application;

(b) the individual must enter into the written employment contract referred to in those sections on or after March 3, 2010;

(c) the individual, and any person related to the individual, must deal at arm's length with the registered corporation.

[en. B.C. Reg. 188/2010, s. 7.]

[Provisions relevant to the enactment of this regulation: International Business Activity Act, S.B.C. 2004, c. 49, ss. 1 and 65]