Victoria -- The type of corporations eligible for tax refunds will expand with the introduction of a new International Financial Activity Act. The new Act adds new types of eligible business activities. It also removes the location requirement that previously required qualifying businesses to be located in the Greater Vancouver Regional District.

The list of qualifying international business activities will now include:

• Certain treasury functions on behalf of non-residents.
• Back office operations, such as accounting and bookkeeping, on behalf of non-residents.
• Back-up operations, such as maintaining back-up databases for out-of-country operations.
• Distribution of film and television rights outside Canada.
• A wider range of foreign exchange transactions.
• Import letters of credit, used by Canadians to buy foreign goods. (Previously, only export letters of credit for foreign purchasers were eligible.)

The eligibility changes will take effect on September 1, 2004.

"This is one of the most visionary pieces of financial legislation in British Columbia in years," said Robert Fairweather, president of the International Financial Centre in Vancouver. "This paves the way for B.C. to compete with other international financial centres like Singapore, Dublin, and Amsterdam, and we expect to see an increasing number of companies setting up offices in the province."

The new Act also eliminates the provincial tax benefit for employees engaged in international financial activities, effective January 1, 2005.

However, the tax refund will remain for skilled specialists who come from outside Canada to work in the province's international financial sector. While the qualifying period has been increased from the current two year period to five years, the refund has been reduced from 100 per cent to 75 per cent of B.C. income tax payable.

"These changes follow a series of improvements we have made to bring new jobs to B.C.," said Collins. "For example, we have cut personal and corporate income taxes, eliminated the corporate capital tax, introduced modern corporation, securities and real estate legislation, and removed thousands of needless regulations. This legislation will make B.C. an even more attractive place for international financial businesses to invest."

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