Non-resident individuals and corporations who render services in Canada (other than in the course of regular and continuous employment) may apply for tax withholding waiver. Should you decide to apply for a waiver, please inform all Canadian payers to make sure they do not proceed with any payment, including deposits, before you received your waiver approval. Any and all payments – including deposits, advances and settlements – made before receiving a letter confirming the outcome of the waiver application will automatically be subject to tax withholding.
Whether the waiver application is successful or not, the non-resident individuals or corporations must file a Canadian tax income return.
Disclamer: This information is provided as a summary of information otherwise available on the Canada Revenue Agency website. It is however not meant as a substitute for consulting the information provided by the Canada Revenue Agency.
How To Apply For A Waiver
Determining The Applicant’s Status and The Type of Claim
In order to apply for a tax waiver, it is necessary to determine whether the applicant is an individual or a group of individuals working together as an unincorporated group, or whether the applicant is a corporation, a company or a limited liability company (LLC). In general, the party identified on the contract with the promoter will determine the applicant’s type.
A tax waiver may be granted based on a fiscal convention between Canada and the applicant’s country of residence or based on an income and expense assessment relating to services rendered in Canada. Should the latter be the case, it is mandatory to present a detailed revenue and expense financial statement including necessary invoices.
To determine the type of claim that should be requested, you may communicate with an agent from the Canadian Revenue Agency or consult the Appendix A and B, from the informational flyer ic75-6r2 issued by the Canadian Revenue Agency.
Filling in the forms
You must fill-out and sign the R105 Waiver Application form.
T1261 and RC1 Forms
For each member of the touring act, you must fill out a T1261 – Application for a Canada Revenue Agency Individual Tax Number (ITN) for Non-Residents and have a certified passport copy by a certified local official. T-1261 along with certified passport copies must be sent by mail (and by mail only) to the Canada Revenue Agency.
If the touring act is a corporation, an RC1 – Request for a Business Number (BN) must also be completed (Part A1 to A4, C, D and E only). You can send these additional forms with the R105 waiver application, along with the requested supporting documents.
For more detailed information please refer to the section entitled “Documents to submit with R-105 form” at the end of the aforementioned form.
- Contracts: all contracts for services to be rendered in Canada as detailed on the R-105 form.
- Unincorporated Groups: attach a contract, should you have one, that certifies the group’s constitution and membership or the distribution of benefits and losses between the group members.
- Corporation, Company or Limited Liability Company (LLC): include the corporation’s constitutive documents, stating the company’s shareholders.
- Revenue and expense: if required, attach a detailed a revenue and expense financial statement including necessary invoices
Presenting your waiver application
Although the service standard is 30 days, it is recommended to present your application at least 45 days prior to the first performance or payment.
The tax waiver application, as well as all necessary documents, must be mailed to the CRA Tax Services Office (TSO) or Centre of Expertise (CoE) that serves the area where the applicant’s services will be provided. In cases of a tour in numerous locations in Canada, the application may be presented to any TSO or CoE that serves one of the locations where performances will be presented. The standard practice in the industry is to send the waiver to the TSO or CoE nearest to the location of the first performance in the tour.
Additional Requirements for Services Rendered in Quebec
Additional withholding of 9% of payments made is required by the Province of Quebec for services rendered in the province. In order to apply for a waiver, send copies of all your forms and documentation to Revenu Québec (Ministry of Revenue).
If the applicant is an individual or an unincorporated group:
If the applicant is a corporation, a company, an association or a non-profit organization:
Non-residents who have carried on business in Canada must file a Canadian income tax return to calculate their tax liability, to get a refund of any excess amounts that were withheld, or simply to confirm that they do not have any tax liability. Even in instances of successful waiver applications, the non-resident individuals or corporations are still expected to file a Canadian tax income return. Failing to file a return will result in penalties and will prevent the non-resident individuals or corporations from applying for waivers in the future.
- For individuals, a T1 – General – Income Tax and Benefit Return for the province or territory where the individual earned the income must be filed by April 30 of the following year, or by June 15 of the following year if the individual is carrying on business in Canada. In either case, if the individual has a balance owing for the year, it must be paid on or before April 30 of the following year.
- For a corporation, a T2 Corporation Income Tax Return must be filed within six months after the end of each tax year. The tax year of a corporation is its fiscal period.
- For partnerships, each member of the partnership must file the appropriate income tax return (either T1 or T2) within the required time.
Send the returns to the following address:
International and Ottawa Tax Services Office
PO Box 9769, Station T
Ottawa ON K1G 3Y4
Credit: These instructions were adapted from documentation prepared by the Festival International de Jazz de Montreal.