May 14, 2015 – Much has been said and been written about the arts, culture and heritage announcements in Budget 2015. Much remained to be done with lesser-known elements of the budget that strengthen the rationale for enhancements to Regulation 105 withholding tax.
"The 1,000 performing arts organizations that we represent are small and medium businesses in their own right: they too can benefit from red tape reduction," stated CAPACOA president Paul Gravett in a letter to the Honourable Kerry-Lynne D. Findlay, Minister of National Revenue.
This letter was sent further to an initial letter requesting enhancements to the administration of Regulation 105. The letter underlines the interest of the Performing Arts Tax Working Group in two announcements made in Budget 2015, under the "Reducing the Tax Compliance Burden" section.
The 2015 federal budget introduced a measure intended at Streamlining Withholding Requirements for Non-Resident Employers: "it is proposed that qualifying non-resident employers be exempted from Regulation 102 tax compliance requirements for non-resident employees where a tax treaty applies and certain other conditions are met." This change would apply to a ballet company whose dancers are regular employees as opposed to contractual workers. While this change pertains to Regulation 102, rather than Regulation 105, it creates a case for implementing a similar exemption under Regulation 105. "We look forward to learning more about this exemption, as it bears potential for reducing the administrative burden associated with second-level taxation," states the letter.
The budget also includes a section entitled The Canada Revenue Agency Continues to Cut Red Tape and Improve Services. It speaks of the government's collaboration with small and medium businesses and created an opportunity for the Performing Arts Tax Working Group to position performing arts organizations as small and medium businesses. Indeed, the live performance sector contributed $2.0 billion to the Canadian GDP in 2010.
The letter made these cases and reiterated the desire of the committee to meet with the Minister and with the Canada Revenue Agency to discuss our recommendations for improving the administration of Regulation 105 withholding and waiver application.
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