OTTAWA, Ont. (CelebrityAccess) — Festival House Inc., the team behind Ottawa's signature summer event Bluesfest, is working to make it a little easier for international artists to perform in Canada.
Typically in Canada, when an artist performs for a fee, they must pay income tax on that fee. This is easier for Canadian artists to accomplish as they can just include it as part of their annual overall income tax filing. But for visiting artists, who do not file tax returns, all venues or promoters must act as agents for Canada Revenue and have to withhold 15% of any guaranteed contract payments—this is known as ‘Federal Withholding Tax’.
This can cause all sorts of problems; especially when the artists are unaware of this tax in advance.
“I can remember a time in the ‘90s,” recalls RBC Bluesfest executive director Mark Monahan, describing such a scenario with a well-known (but unnamed) artist who had cut his teeth on the notorious 'chitlin’ circuit' before rising to international fame. “The star had an outright conniption when we told him we had to hold back part of his fee. He thought we were ripping him off. It took close to an hour to calm him down and convince him to go on stage, once we explained that his agents could file paperwork to get the money back as a tax return.”
To help make this tax situation a little more palatable for foreign artists, the team at Festival House Inc. has launched a new service for non-Canadian artist to file for a Regulation 105 Tax Waiver application on the artists' behalf. And while the team is best known for their work with events such as Bluesfest and the CityFolk festival, the offer is open to artists performing at ANY event or venue in Canada.
The service draws on Festival House's extensive experience in working with Canada Revenue’s Non-Residents department and they say they can help to ensure that tax waiver applications are processed in a timely manner, in an effort to have payments that are subject to Canadian tax withholdings waived. This not only saves time for the artists to focus on their tours but also avoids the cost of hiring a tax accountant to process the paperwork to get any tax returns from Canada Revenue. It is also a welcome relief for any promoters along the tour route who will welcome the fact that this paper work is done and they don’t have to hold back a percentage of an agreed upon performance fee.
What Festival House Inc. offers is to complete and file tax waiver applications for any performance across Canada to the appropriate Tax Centre. Upon filing the R105 waiver application, Festival House Inc. sends the artist a copy of the waiver for their files as an acknowledgment that the application has been made. Even if the artist does not qualify for a tax waiver, Festival House Inc. can file for a reduced tax withholding due to financial hardship.
Festival House Inc.'s fee is based on a percentage of the tax amount that gets successfully waived. Should the application filed by Festival House Inc. be declined, there will be no cost whatsoever to the artists for the application effort.
Any further questions about this service can be directed to Rebecca Walker at Festival House. – Staff Writers