Guide - how to complete the IBA tax refund of an IB specialist (FIN 550)
Budget 2017 Update proposes to eliminate the International Business Activity program effective September 12, 2017.
This guide is to help you complete sections of the form that require additional detailed instructions.
To obtain a tax refund, you must file a completed IBA Tax Refund of an IB Specialist (FIN 550) (PDF) with the Ministry of Finance (ministry) within 18 months after the end of the tax year.
The return will be considered complete only if all of the questions on the IBA Return are answered and all applicable supporting documentation is provided. Retain all documents that support how the amounts reported were derived.
A tax refund will only be paid to you after all B.C. and federal income taxes for the tax year are paid. Please note that you are required to provide proof that all income taxes have been paid before a refund will be issued. All income taxes payable for the tax year must be paid within 3 years after the end of the tax year.
You can only be an IB specialist for 5 years from the date you are first registered (maximum registration period), regardless of whether there is a suspension or cancellation of your registration during that five year period.
If your employer’s registration has been suspended during the tax year, your registration as an IB specialist is suspended for the same period that the corporation's registration is suspended. You will receive a Notice of Suspension from the ministry indicating the start date and end date of the suspension, as applicable. You cannot claim a tax refund for the period during the tax year for which your registration was suspended.
If your registration has been cancelled during the tax year, you cannot claim a tax refund for the tax year.
Section 2. Employer Identification
Enter the name of your employer during the period for which the tax refund claim is made. If you worked as an IB specialist for more than one employer, attach a list to the return providing complete identification information of each employer including their name, phone number and mailing address and the period worked for each employer.
Section 3. Registration Status
Enter your date of registration as an IB specialist as provided by the Ministry of Finance (ministry).
If this is your final IB specialist return, please attach the reason(s). For example, the reason could be the end of your employment contract, the cancellation of your registration or the expiration of your maximum registration period.
Section 4. Is this an amended IB Specialist return?
If YES, attach the reasons for the amendment. This includes a reassessment from the Canada Revenue Agency (CRA) or anything else that changes the calculation of the tax refund.
If you are filing an amended IB specialist return, you must provide the following documents with your amended return:
- a note explaining the reason for the adjustment,
- a copy of the revised report respecting your employment as an IB specialist provided by your employer, if applicable,
- a copy of your T1 Adjustment Request and any other forms related to the adjustment request filed with the CRA as applicable, and
- a copy of the applicable Notice of Assessment or Reassessment from the CRA.
Box 4A – You must notify the ministry within 90 days after the issuance of a Notice of Assessment or Reassessment issued by the CRA under the federal Act or the Income Tax Act (B.C.) when the assessment or reassessment changes an amount relevant to calculating your refund for the tax year.
Boxes 4B and 4C - If payment is enclosed enter the amount and make the cheque payable to the Minister of Finance.
Section 5. Type of IB Specialist
Indicate the type of IB specialist for which you are registered:
- International Financial Business Specialist
- Administrative Support Services or Back-Up Office Services Specialist
- Executive Specialist
- Designated International Business Specialist (currently only an international film distribution business qualifies)
In addition to being registered as an IB specialist, an individual must also meet the following specific requirements in respect of the particular type of IB specialist for that part of the year that they are registered:
- An IB specialist who is an international financial business specialist must have devoted at least 70% of their working time to performing international financial activities in which the individual is a specialist for the corporation’s international financial business.
- An IB specialist who is an administrative support services or back-up office services specialist must have worked in the corporation’s international financial business that carries on one or other of the above noted activities.
- An IB specialist who is an executive specialist must have worked in the corporation’s international business.
- An IB specialist who is a designated international business specialist must have devoted at least 70% of their working time to performing activities in which the individual is a specialist for the corporation’s international film distribution business.
Section 6. Supporting Documentation
Authorization or Cancellation of a Representative - If the corporation already has a valid Authorization or Cancellation of a Representative (FIN 146) on file with the ministry, it is not necessary to include a copy of the form with the return. To authorize or change a representative for the IBA program, attach a completed FIN 146. The authorization remains in effect until it is cancelled. See the guide for registration of a corporation for further information.
Income Tax and Benefit Return (T1) - Provide a paper copy of your complete T1 package filed for the tax year with the CRA. This includes all federal and B.C. schedules including the British Columbia Tax form (BC428), and the British Columba Credits form (BC479).
Notices of Assessment or Reassessment - Provide a copy of all Notices of Assessment or Reassessment issued by the CRA for the tax year. If you have not received a Notice of Assessment, you must still file an IB specialist return with the ministry, within 18 months of the tax year in order to claim the refund. If you are unable to provide a Notice of Assessment, please include a letter explaining the omission at the time you file your IB specialist return.
Statement of Account - If there is a balance owing on the Notice of Assessment or Reassessment, provide a copy of the Statement of Account issued by the CRA to provide proof that all amounts have been paid.
Employer’s report – Provide a copy of the report respecting your employment as an IB specialist provided to you by your employer(s).
Section 7. Calculation of IB Income
This section calculates your IB income as an IB specialist.
IB income is the employment income (or loss) that relates to your employment as an IB specialist with an international business for that part of the tax year that the corporation was a registered corporation. Employment income (or loss) is the amount determined under Subdivision a of Division B of Part I of the Income Tax Act (Canada) (federal Act).
IB Income is calculated as if your income for the tax year was only from sources that are an international business of a registered corporation. Your IB income is reduced by any employment expenses, including employee security options, deducted on your T1 relating to your employment with the international business of a registered corporation.
Box 7A (IB employment income) - IB employment income is the amount stated in the report respecting your employment as an IB specialist provided to you by your employer (employer’s report).
If you worked as an IB specialist for more than one employer, total the amounts included in the reports provided to you by your employers, as applicable, and enter in Box 7A.
Box 7B (other IB income) - other employment income is reported on Line 104 of your T1. Other IB income is employment income that is related to your employment as an IB specialist with an international business but is not included in Box 14 of your T4 slip from your employer.
Enter the portion of Line 104 of your T1 relating to your employment with an international business. For example, if you received proceeds from an employee profit sharing plan reported in Box 35 of a T4PS slip, you would enter the portion that is related to your employment as an IB specialist with an international business in Box 7B.
Box 7E (non-IB portion of employment expenses deducted) - remove the portion of employment expenses included in Box 7C and Box 7D that does not relate to your employment as an IB specialist with an international business. For example, if you worked part of the year for an international business and part of the year for a business that is not an international business, you should enter the portion of your employment expenses relating to the business that is not an international business in Box 7E.
For example, Roger is completing his calculation of IB income. His period of employment as an IB specialist for the relevant tax year is July 1 to December 31. He incurred the following employment expenses for the relevant tax year, reported on Line 229 of his T1:
Business-use-of-home expenses $1,000
Allowable motor vehicle expenses $2,000
Total employment expenses $3,000
Assume all the allowable motor vehicle expenses relate to Roger's employment before July 1. Assume all business-use-of-home expenses relate exclusively to Roger's employment as an IB specialist for the period July 1 to December 31.
Roger would enter $3,000 in Box 7D and $2,000 (employment expenses not relating to his employment as an IB specialist) in Box 7E.
Assume none of the allowable motor vehicle expenses relate to Roger's employment as an IB specialist. Assume also that only 50% of the business-use-of-home expenses relates to Roger's employment as an IB specialist.
Roger would enter $3,000 in Box 7D and $2,500 ($2,000 of allowable motor vehicle expenses plus $500 which is 50% of the business use of home expenses) in Box 7E.
Box 7I (non-IB portion of security options deduction) - you must deduct the amount of your security options included in Box 7H that do not relate to your employment as an IB specialist with an international business. For example, if you included employee security options provided to you by a business that is not an international business on Line 249 of your T1, you would enter the portion of employee security options relating to the business that is not an international business in Box 7I.
Section 8. Calculation of IB Specialist Tax Refund
This section calculates the tax refund for the IB specialist.
Box 8A (IB Income) - enter the amount from Box 7K. If this amount is zero, you are not eligible to claim a tax refund for the tax year.
Box 8C (eligible proportion) - the eligible proportion is the result of dividing Box 8A by Box 8B and must be a number between zero and one.
Enter 0 (zero) if the amount determined as the eligible proportion is zero or negative. Enter 1 (one) if the amount determined as the eligible proportion is one or greater than one.
Where the amount determined as the eligible proportion is greater than zero and less than one, the result must be calculated to six decimal places and entered in Box 8C.
Box 8H (applicable percentage) - the applicable percentage for each tax year is the rate provided to you by the ministry. Enter the appropriate amount for the tax year in Box 8H. If you do not have the information, please contact us (see below).
Box 8J and 8K – Only complete these boxes if you are filing an amended return.
Box 8J (tax refund previously determined) - if you are filing an amended IB specialist return, enter the amount of the tax refund previously determined for the tax year.
Box 8K (increase (decrease) in tax refund) - subtract the amount in Box 8J from the amount in Box 8I. Enter the total in Box 8K. If the amount in Box 8K is negative, you have an amount owing to the ministry. Interest will be charged on all amounts owing. If you have a balance owing, enter the amount of the cheque you are attaching to the return in Box 4C. Make the cheque payable to the Minister of Finance.
Section 9. Certification
The return must be signed and dated by the IB specialist.
Send us your return
Mail or courier your return to the Ministry of Finance, Income Taxation Branch:
- Mailing address: PO Box 9444 Stn Prov Govt, Victoria BC V8W 9W8
- Courier address: 1802 Douglas Street, Victoria BC V8T 4K6
- Victoria: 250-953-3082
- Vancouver: 604-660-2421
- Toll free within Canada and USA: 1-800-663-7867
- Outside of Canada/USA: 1-604-660-2421