CIMA Joins Working Group On Tax Withholding Matters
CIMA is pleased to announce that we've joined a working group alongside 15 other arts organizations from across Canada to focus on issues surrounding the administration of the Regulation 105 withholding tax. We believe that tax administration is an important component of ensuring a healthy music ecosystem.
Presently, the working group consists of representatives from:
- CAPACOA
- Canadian Dance Assembly
- Canadian Independent Music Association
- CanDance Network
- Danse Danse
- East Coast Music Association
- EPCOR CENTRE for the Performing Arts
- Eponymous
- Festival International de Jazz de Montreal
- Festivals and Major Events Canada
- Les Grands Ballets Canadiens de Montreal
- Lula Music and Arts Centre
- NAPAMA - represented by GAMI/Simonds, LLC.
- National Arts Centre
- Orchestras Canada
- Sunny Artist Management
Check out CAPACOA's full news item on the formation of this working group by clicking here: http://www.capacoa.ca/en/services/arts-promotion/news/1226-organizations-collaborate-tax-withholding
From CAPACOA's Release:
About Regulation 105 Withholding
Every arts organization who makes a payment to a non-resident artist or company for services rendered in Canada must withhold and remit an amount in accordance with the requirements under the Canadian Income Tax Act. The rate of withholding is 15% of the gross amount paid.
The only alternative to the withholding and remitting requirements is for the non-resident to obtain a waiver, or a reduction in the withholding tax. Where a non-resident can adequately demonstrate that the withholding tax normally required is in excess of their ultimate Canadian tax liability, the CRA may reduce or waive the withholding tax accordingly. The onus is on the non-resident to demonstrate to the CRA that a waiver or a reduction of the amount required to be withheld is justified. This may be based on the application of the treaty of their country of residence or through an estimated income and expense statement. A request for a waiver should normally be filed 30 days before the services are to begin in Canada, or 30 days before the first payment is due for these services.
Even if the payer withholds and remits tax from the non-resident’s income or even if a waiver is granted, the non-resident will likely have to file a Canadian income tax return to get a refund of any excess amounts that were withheld or else to certify that they are exempt from paying tax in Canada.