EDGE Magazine | Q3 2011
Self-employed - Those artists and athletes that are self- employed will be required to obtain a Social Insurance Number. This number will allow a taxpayer to file a Canadian tax return (T1). Most promoters and others contracting for these artists and athletes will request a number and will withhold 30% of all payments.
Employees – Performers and athletes who are employees of a tour company, production company or sports team will be paid from the employer's place of residence for tax purposes in most situations. Therefore a member of a sports team located in outside Canada will be considered an employee in the foreign jurisdiction even though most games may be played outside that jurisdiction. Local withholding taxes will be deducted and submitted. While the foreign-based team may not withhold Canadian taxes for the earnings from appearances in the Canada the individual team member may be required to file tax returns in Canada subject to treaty exemptions. Team members who play for foreign teams but are Canadian residents will also be required to file a Canadian
return will be allowed to include a foreign tax credit for all taxes paid in the foreign jurisdictions which should eliminate most, if not all, duplicated tax. Non-Canadian residents filing tax returns in their home countries will likely be allowed an offsetting foreign tax credit in that country for taxes paid in Canada subject to the tax treaties between Canada and those countries.
Incorporated Performers – Foreign performers who have their own production company can provide services in the Canada. Just as with individuals these companies will be required to apply for business number (BN). The corporation may be required to file a Canadian tax return T2.
Conclusion – It is obvious that, as governments find their budgets stretched, they are going to pursue taxpayers, many of whom have avoided or failed to file tax returns, and high-profile individuals whose presence in Canada is well-documented and is definitely low-hanging fruit.
Allan D. Garber Canada
Parker Garber & Chesney, LLP
AGarber@pgcllp.ca
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