Allocating income to Canada for acting services
As a non-resident actor providing acting services in Canada, you are subject to Canadian income tax on income you earn in Canada. This applies whether you provide acting services as an individual or through a corporation. If you earn income, including the value of taxable benefits, for acting services you provide both inside and outside Canada, you have to allocate this income between the jurisdictions.
To allocate income to Canada, you have to calculate the:
- Number of days inside Canada;
- Number of days outside Canada;
- Total number of days on the production;
- Percentage (%) of days inside Canada;
- Acting income allocated to Canada.
Number of days inside Canada - This is the number the days you were present in Canada to provide the services specified under the acting contract, whether or not you actually provided the services on all of those days. It therefore includes the days you arrived in and departed from Canada, weekends, statutory holidays, days you were on "standby," days you were "on call," and short breaks if you remained at or near your work location. The Canada Revenue Agency considers that you have to be in Canada on such days to be able to provide the services. They are therefore relevant to determining the amount of income you earn in Canada.
Number of days outside Canada - This is the number of days you spent outside Canada providing services under the contract, multiplied by 7/5.
Total number of days on the production - The "number of days inside Canada" plus the "number of days outside Canada" equals the "total number of days on the production." This number should be consistent with the time periods identified in the contract for services.
Percentage (%) of days inside Canada - This is the percentage represented by the following formula:
(Number of days inside Canada × 100) ÷ (Total number of days on the production) = % of days inside Canada
Acting income allocated to Canada - To calculate the amount of acting income to allocate to Canada, multiply your income under the contract that is attributable to acting services by the "percentage (%) of days inside Canada." See the example below.
Example (where income under the contract is $100,000)
|1||Number of days inside Canada||60 days|
|2||Number of days outside Canada providing
services for the producer under the contract × 7/5
|(75 days × 7/5)||105 days|
|3||Total number of days on the production||(Lines 1+2)||165 days|
|4||% of days inside Canada
Number of days inside Canada × 100
Total number of days on the production
|60 days × 100
|5||Acting income allocated to Canada||($100,000 × 36.4%)||$36,400|
To request a reduction in the withholding tax, you may make reasonable estimates of the number of days inside Canada and the number of days outside Canada, based on the principles above.
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