Canada: Break A Leg – But Don’t Break The Bank: Understanding How Foreign Actors Are Taxed

Last Updated: July 30 2013
Article by Adam Scherer, BA, CPA, CA

As the weather begins to warm, downtown Toronto livens up. Come summer, streets and attractions are abuzz with thespians and tourists alike, outdoor patios fill with revelers, and festivals and parades abound.

You will also often find streets lined with movie trailers. World-class amenities, a suitable infrastructure, and favourable federal and provincial tax incentives make Toronto an attractive place to film motion pictures. "Hollywood North" – as Toronto is known – is a hotbed of film activity over the summer, culminating with the world-renowned Toronto International Film Festival (TIFF) in September.

This booming industry creates many jobs for Canadians and brings many non-Canadian stars to the city. These performers - who are residents of the U.S. and elsewhere – while working in Canada do not just have lines to learn; they must decipher the complex tax laws of two countries.

To help sort out some of these complexities, here is an overview of the Canadian tax implications for self-employed actors, ones who are residents of the U.S. and work in Canada, including those who do so through a corporation.

Under the Income Tax Act of Canada, any self-employed person carrying on business in Canada is subject to Canadian income tax; his country of residency or citizenship does not affect that result.

Most U.S. self-employed individuals who provide services in Canada for a short period can escape Canadian taxation thanks to the Canada-U.S. Tax Treaty. Special clauses of the treaty apply to artists residing in the U.S. and working in Canada. The term "artist" includes theatre, film, radio, television and music performers.

Based on these clauses of the Canada-U.S. Tax Treaty, Canada can tax an artist on the income he derives from services performed in Canada, if the income from these services exceeds $15,000 CAD. This could create a significant compliance obligation for actors. So, in order to continue enticing foreign actors to perform here, Canada has eased the compliance burden specifically for actors. These rules are discussed in the following.

The term "actors" refers only 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 however does not apply to others within the movie industry, such as directors, producers or other behind-the-scenes personnel. The legislation also does not apply to anyone in other sectors of the entertainment industry, such as musical performers, ice or air show performers or international speakers.

Under these rules, all gross revenue earned by non-resident actors performing in Canada is taxed at a flat rate of 23% with no deductions permitted. Every actor then has the following choice:

  • Treat the 23% as his final tax liability and not file a Canadian return; or
  • Treat the 23% of his gross acting income withheld as an advance against his tax liability; file a personal Canadian income tax return; compute tax at marginal rates on his net income (gross revenue less expenses) and apply the amount that was withheld against the computed liability.

Actors who choose to file a personal Canadian income tax return can deduct reasonable expenses from their gross revenue. These expenses must have been paid for by the actor, and must have been for things required to earn the acting income in Canada. Deductible expenses (net of any reimbursements) include managers and agent's fees, wardrobe and make-up costs, meals and travel expenses, and professional development fees, such as acting coaches. There are also specific time limits to decide whether to file a return or not.

For 2013, the Canadian and provincial personal income tax rates for individuals are graduated (that is they increase as the actor's income increases):

  • In the province of Ontario, the rates range from 20% to 49.5%.
  • In the province of British Columbia, the rates range from 20% to 44%.

(Note: Toronto, Ontario and Vancouver, British Columbia account for the majority of U.S. film and television work in Canada).

So, it may be beneficial for an actor who earns income in lower brackets to file a return based on his net income. Similarly, it is usually beneficial for a high-income performer to pay the flat rate of 23% on the gross revenue. Actors should consult a tax advisor who can crunch numbers and advise which way to go.

All non-resident actors working in Canada are subject to the upfront 23% tax withholding on their gross income, when they perform their services, regardless of the eventual tax liability in Canada. An actor filing a tax return, or one whose annual income falls below the $15,000 taxation threshold, can apply to have the up-front tax withholding reduced or eliminated.

Actors falling under these rules should remember that all citizens or deemed residents of the U.S. must report their worldwide income to the IRS. A mechanism exists preventing anyone subject to tax in both countries from paying tax twice on the same income. When completing his U.S. personal income tax return, an actor can get a reduction in his U.S. taxes for the taxes he paid to Canada (subject to certain limitations). In many situations, the 23% tax paid to Canada is less than the applicable U.S. taxes due on that income. In this case, the U.S. may grant a full credit and the actor sees no difference in their overall tax liability. (Of course, he is paying some of his tax money to the Canadian government rather than the U.S.).

These rules apply only to self-employed actors residing in the U.S. and performing in Canada. In many cases, actors are considered employees who may operate through a corporation. There are similar tax rules for actors in these situations, but there are significant differences and added compliance obligations that they should discuss with a tax advisor.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Adam Scherer, BA, CPA, CA
In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.