Per diems for non-resident actors providing acting services in Canada
Effective as of January 1, 2002, the administrative policy for per diem amounts and travel expense reimbursements is:
Amounts not subject to withholding
Withholding pursuant to subsection 212(5.1) of the Income Tax Act of 23% is not required from the following amounts:
- reasonable travel expenses (airfare, hotels) paid directly to third parties on behalf of the non-resident actor, and
- reasonable travel expenses reimbursed to the non-resident actor provided they are adequately supported by vouchers, maintained by the payer. (Reimbursement of meals including incidentals to a maximum $100/day (CDN) will not require receipts.)
Travel expenses excluded from the gross above reasonable travel expenses are restricted to expenses incurred for commercial transportation, accommodation and meals.
Amounts above $100/day reimbursed for meals will require that the payer retain receipts from the non-resident actor. If receipts for the full amount paid are not retained, withholdings of 23% on the amount in excess of the total receipts retained are required. For example, a non-resident actor is paid a per diem amount of $600/day for a 10 day period. The payer obtains receipts for the period from the non-resident actor of approximately $200/day. The payer must therefore withhold on the additional $400/day paid to the non-resident actor for which the payer does not retain receipts.
Amounts of $100/day or less paid as a reimbursement of meals expenditures will require only that the payer obtain an attestation from the non-resident actor that such amounts were incurred. However, the non-resident actor is required to retain the receipts for possible subsequent verification by the Canada Revenue Agency. It is expected that payers exercise reasonable discretion in accepting such attestations from non-resident actors. For example, where shooting for a particular period took place in a remote area without access to restaurants, and all meals were provided on the set, it would not be reasonable to accept an attestation that a non-resident actor incurred meal expenditures of $100/day for this period.
The 23% withholding tax is required to be remitted to the Receiver General by the 15th of the month following the month in which the payments were made. For example, if a per diem is paid to a non-resident actor on January 10 , 2010 the remittance of the withholding tax would be required to be made to the Receiver General by February 15, 2010. Payers and non-resident actors should consider these time frames when determining whether the withholding tax should be applied and whether receipts may be provided to the payer by the non-resident actor before the time required for remitting the tax.
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