Taxation of non-resident actors providing film or video acting services in Canada
Legislation was passed in Parliament on June 14, 2001, that sets the withholding tax on acting income earned by non-resident actors at 23%. The legislation is retroactive to January 1, 2001.
Under the legislation, 23% tax must be withheld on the gross income earned from acting in a film or video production, including residuals and contingent compensation, with no deductions permitted. Non-resident actors can either:
- have 23% of their gross acting income withheld and not have to file a return; or
- have 23% of their gross acting income withheld, file an elective return, and pay tax at marginal rates on their net income instead of 23% on the gross amount. If the non-resident tax withheld by the payer is more than the amount of tax payable calculated on the return, the excess will be refunded.
The legislation applies to non-resident actors in film or video production, such as feature films, movies of the week, television series, documentaries, video productions, and commercials.
The legislation applies only to acting income earned by non-resident actors providing services in Canada. If a non-resident person earns other income in Canada (for example, for services as a producer or director, or income from stage acting), this income is subject to withholding at the rate of 15% and the person is required to file a tax return.
The legislation does not apply to other people employed or providing services within the movie industry, such as directors, producers, and other personnel working behind the scenes. As well, the legislation does not apply to people in other sectors of the entertainment industry, such as musical performers, ice or air show performers, or international speakers.
When the actor performs film or video acting services as a corporation, then the 23% tax is applied on payments from the payer to the actor corporation. For the subsequent payment from the actor corporation to the individual actor, the 23% tax applies only to the amount that exceeds the payment from the payer to the corporation.
Payers should remit taxes at the 23% rate to a non-resident withholding account. Non-resident withholding account numbers begin with NR (e.g., NRX123456). A Business Number cannot be used to remit non-resident withholding tax.
If a payer has an existing non-resident account, remittances may be made to that account.
To set up a non-resident withholding account if one does not already exist, the payer should contact Part XIII tax and Non-resident withholding accounts enquiries.
1-855-284-5946 toll-free within Canada and the United States
1-613-940-8499 from outside North America
1-866-765-8460 or 705-677-7712
For all other enquiries, contact the applicable Tax Service Office.
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