Article XVI - Artists and Athletes, Canada - United States Income Tax Convention
The information on this page has been tailored specifically for actors providing film or video acting services in Canada. For information on how Article XVI applies to persons performing other services in Canada, please contact the CRA's International and Ottawa Tax Services Office.
Paragraph 1 of Article XVI provides an exemption from tax in Canada in certain circumstances. Income that a resident of the United States who is an entertainer (such as a theatre, motion picture, radio, or television artist, or a musician or an athlete) receives from personal activities exercised in Canada is not taxable in Canada when the gross amount received, including expenses reimbursed or paid on the entertainer's behalf from such activities, is CAN$15,000 or less for the calendar year.
- This exemption applies to income received by an individual, but not to income received by a corporation.
- Gross amounts over CAN$15,000 are taxable.
- Income, such as residuals or participations, paid in a subsequent calendar year that pertains to the services provided in Canada is added to the base compensation for services when determining if the CAN$15,000 threshold is exceeded.
An actor provides services in 2007. The base compensation is $20,000. Residuals of $1,000 are earned in 2008.
Since the base compensation exceeded the $15,000 threshold when it was paid, the $1,000 in residuals is taxable, as are any residuals the actor receives in subsequent years.
The exemption in Paragraph 1 of Article XVI does not apply to the actor. However, he or she can still choose to file a Canadian income tax return if this would reduce the amount of tax owing.
An actor provides services in 2007. The base compensation is $2,000. The actor does not perform any other services in Canada during 2007. In 2009, the actor is paid $100 in residuals from the services provided in 2007.
The total compensation for the services provided in 2007 is $2,100, which is not taxable in Canada due to paragraph 1 of Article XVI.
Why did my payer withhold tax when I earned much less than CAN$15,000 in the calendar year from acting services provided in Canada?
Since the exemption is based on the total income paid by all payers, your payer has to withhold the 23% tax unless the payer has a letter from the CRA authorizing a reduction of tax. The CRA will only approve a reduced withholding if you agree to file an income tax return before the due date for filing.
To request a letter that authorizes your payer to not withhold tax, complete Form T1287, Application by a non-resident of Canada (individual) for a reduction in the amount of non-resident tax required to be withheld on income earned from acting in a film or video production .
If your request is approved, you have to file an income tax return before the due date for filing to confirm your tax reduction.
How do I apply for a refund?
To apply for a refund, file an income tax return before the due date and write "Actor's election" on the top of page 1 of the return. Report your income from film or video acting services on lines 162 and 135 (gross and net business income). Claim the applicable exemption on line 256, Additional deductions. Attach a note to your return explaining that the exemption you are claiming is provided in Paragraph 1 of Article XVI - Artistes and Athletes, Canada - United States Income Tax Convention. If you receive income in years after the year the services were performed, show how you calculated the $15,000 exemption. Claim any tax withheld by the payer on this income on line 437, Total income tax deducted (from all information slips).
When is my income tax return due?
You have to send us your return on or before your filing due date for the year. The filing due dates for Canadian tax returns are as follows:
- An individual tax return is due on or before April 30 of the year after the tax year to which the return relates.
- A self-employed individual's tax return is due on or before June 15 of the year after the tax year.(Any tax owing is due on or before April 30 of the year after the tax year.)
How do I get a refund if I missed the deadline for filing a tax return?
If you missed the deadline for filing a tax return, you can still apply for a refund of excess non-resident tax withheld on film or video acting services by filing Form NR7-R, Application for Refund of Part XIII Tax Withheld.
Complete and send Form NR7-R to the International and Ottawa Tax Services Office no later than two years after the year in which your payer remitted the tax. Indicate on the form that you are claiming a refund according to Paragraph 1 of Article XVI, Artistes and Athletes, in the Canada - United States Income Tax Convention.
Attach a separate sheet to indicate a breakdown of your total income from Canada from personal activities related to theatre, motion pictures, radio, or television, and as a musician or as an athlete. If you received income in years after the year the services were performed (i.e., base compensation in year 1 and residuals or participations in years 2 and 3), also show how you calculated the CAN$15,000 exemption. Include a copy of your contract. You must also attach your NR4 slip or have your payer who withheld tax complete the Certification of Tax Withheld portion of Form NR7-R.
Only the tax withheld from film or video acting services can be refunded via Form NR7-R. If you also received income from theatre or radio, as a musician, or as an athlete, contact one of the CRA's tax services offices for information on how to claim a refund.
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