THIS ARTICLE IS BEING UPDATED ON 12/17/19: THE RULES HAVE CHANGED AND ARE NOW EASIER FOR AMERICANS WORKING IN CANADA AND MAKING LESS THAN CAN$15,000. The following is taken directly from the Government of Canada Web Site: https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/rendering-services-canada/guidelines-treaty-based-waivers-involving-regulation-105-withholding.html
"New simplified income tax process for non-resident artists and athletes
The Canada Revenue Agency (CRA) has created a new waiver simplified process for self-employed non-resident artists and athletes earning money for performances in Canada. If you are a non-resident artist or an athlete performing in Canada for a fee and will earn no more than CAN$15,000 during the calendar year, you can use the simplified waiver process to cut down on paperwork, as well as reduce or eliminate the tax withheld on your earnings in Canada. Please see Simplified Regulation 105 income tax waiver application for non-resident artist and athletes for more information."
If you click on the link, it tells you the following:
"Artists and athletes: how the simplified process works
Your country of residence determines the steps required when you use the simplified process.
Process for residents of the United States
If you are an artist or athlete living in the United States (U.S.) and expect to earn no more than CAN$15,000 for performances in Canada during the calendar year, here’s how the process works:
- Complete Section 1 of Form R105-S, Simplified Waiver Application, and give the form to the entity paying you to perform in Canada (the “payer”).
- The payer will not withhold any of your Canadian income.
- The payer will issue you a tax slip for proof of income earned in Canada by February 28 of the following year.
- Report the amounts you earned in Canada on your U.S. income tax return.
If you do not earn other income in Canada during the calendar year, you have no more actions to take.
Example
A U.S. resident artist enters into a contract to perform a show in Canada for CAN$13,000 with a CAN$1,000 bonus to cover expenses. This is the artist’s only performance in Canada in the calendar year. Since Article XVI of the Canada – U.S. Tax Treaty exempts income earned by a U.S. resident artist when the gross income earned by the artist (which includes the amount paid for services and the bonus) does not exceed CAN$15,000 in the calendar year, the U.S resident artist can use this simplified waiver process:
- The artist completes Section 1 of Form R105-S, Simplified Waiver Application.
- The artist signs the form and gives it to the payer before the performance or any payment, including any deposit (no interaction with the CRA or Canadian identification number is required).
- The payer makes sure the artist has completed and signed the form.
- The payer completes their portion of the form and signs, which brings the waiver into force. The payer is then not required to withhold any funds and can pay the artist in full.
- The payer keeps a copy of the signed Form R105-S, Simplified Waiver Application, for their records for a six-year period in the event that the CRA asks for it."
Life for Americans making less than $15,000 Canadian Dollars each in a fiscal year (if you are in a group, a team or a band, you can divide the revenue amongst the members) has just become MUCH easier.
If you will make more than CAN$15,000 in a fiscal year, you need to follow the following instructions still:
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It is March 2013, and I return to Canada to perform for a fundraising show in Kindersley, Saskatchewan, about 2 hours outside Saskatoon. Kindersley has a population of just under 5,000 and is a mineral rich farming community, like so many others in this region.
Over the last 25 years of my career, I have performed for a lot of fairs and expositions, including the Calgary Stampede, Saskatoon Prairielands Exhibition, Medicine Hat Exhibition, Royal Manitoba Winter Exhibition in Brandon, private parties for the military, and others.
In December 2011, I did not apply for a tax exemption before doing a show for a military squadron. This was my mistake and I knew better. Regaredless, it cost me $225.00, which the government withheld from my check and submitted to Revenue Canada (the equivalent of the Internal Revenue Service in the USA). The only way I was going to get that money back was to file a Canadian tax return. I didn’t bother.
Before working in Canada, U.S. citizens must apply for tax exemption. If they do not, it is mandated that the Canadian host retain 15% of gross payment and send it to Revenue Canada. To apply for tax exemption, there are a number of steps to take. It is not complicated, but it must be done at least 3-4 weeks before the event date to give Revenue Canada sufficent time to respond.
- Step #1: Make sure your client in Canada writes you a “Letter of Intent” on letterhead stating they will be hiring you on the specific DATE and have them send you a copy of this signed letter. My own recent Letter of Intent reads as follows (your client should put in your information and remove my personal information where appropriate):
(Letterhead of Client engaging my Services)
LETTER OF INTENT
THIS LETTER OF INTENT (“the Letter”) made as of this 28 day of January, 2013(the “Execution Date”),
BETWEEN:
365 Lloyd “Sparky” Ament Air Cadets of Kinderley, SK
and
Alan Sands of Foster City, CA
A. 365 Lloyd “Sparky” Ament Air Cadets Squadron has hired Alan Sands to perform his hypnosis show in Kindersley, SK on Friday, March 15, 2013. Alan Sands is a well-known hypnotist from Foster city, CA
B. The Squadron will be putting Alan Sands up in a hotel overnight before he returns home.
Signed by Executive of 365 Lloyd “Sparky” Ament Air Cadets Fundraising Committee
Signature
NAME
- Step #2: You will need a copy of your contract or the agreement signed by all parties to submit as evidence.
- Step #3: Go to the Revenue Canada web site and download the 3-page form Regulation 105 Waiver Application (PDF download).
- Step #4: Revenue Canada wants a photocopy of your U.S. driver’s license. I also include a copy of my social security card. You may also want to send them a copy of the second page of your passport. On this trip, I lost my passport and had to replace it before I was leaving. I did not have my passport at the time I submitted my Regulation 105 Waiver Application to make a copy, so I did not include this. It was not a problem.
- Step #5: I include a copy of my “Articles of Incorporation” as further proof of who I am because my contract lists my company as the recipiant of the payment.
I filled out the Regulation 105 Waiver Application to the best of my ability and I faxed the form to Revenue Canada. My fax was seven pages.
It’s important to know that US Citizens are only exempt from witholding on $15,000 Canadian “net” revenue. On the Regulation 105 Waiver Application you can show that you have expenses. These can be deducted from the $15,000 net. Expenses can include, but are not limited to: payroll to other members of your group, hotel, transportation costs, car rental costs, fuel in Canada for your vehicles, meals and rental equipment you will need to acquire to do the event.
If you are an entertainer performing in Canada, you need to know about work permits.
U.S. performers working in Canada
I have been performing my comedy magic and stage hypnosis show at fairs in Canada for 25 years. When I began crossing the international border long ago, I used to buy a work permit every time I crossed, but the rules changed and I found that I no longer needed one when doing fairs or exhibitions.
In December 2011, I went to Medicine Hat, Canada to do a Holiday Party at a hotel and learned that there are conditions under which Americans entertainers still need a work permit. This blog will help clarify this.
I performed in a hotel banquet room. Canadian Immigration was not sure if this was for a bar or restaurant. My shows were for a “private party” so I was able to enter without the permit. Understanding the conditions below will help you become informed when entering Canada to work, and prevent surprises when Canadian Immigration officers tell you they require you to buy a work permit.
The following is from Canadian Immigration’s manual as of December 2nd, 2011 and is accurate at that time:
FW1 Foreign Worker Manual (PDF download): Section 5 - Departmental Policy
Section 5.8 - Working without a work permit (R186(g) - Performing Artists
The lists below outline which types of activities according to CIC/HRSDC meet the requirements of R186(g), and which types of activities will require an LMO and work permit (see tables in the downloadable PDF document, beginning on page 33):
This downloadable information can be found indexed on the Web at:
Citizenship and Immigration Canada
Operations Manuals - Temporary Foreign Workers Guidelines
Entry Without a Work Permit
- Foreign-based musical and theatrical individuals groups and their essential crew, working outside bars and restaurants
- Street performers (buskers), DJs working outside bars, restaurants or similar establishments
- A foreign or traveling circus
- Guest artists (not employed) within a Canadian performance group for a time-limited engagement
- World Wrestling Entertainment (WWE) wrestlers (and similar groups)
- Persons performing at a private event, such as a wedding
- Air show performers
- Artists attending or performing at a showcase
- Rodeo contestants, e.g. bronc-riders, steer-ropers, barrel racers
NOTE: The following persons will be granted entry as visitors pursuant to Regulations other than R186(g):
Business visitors:
- Film producers
- Film and recording studio users (limited to small groups renting studios not entering the labor market)
Guest speakers:
- Persons doing guest spots on Canadian TV and Radio broadcasts
Work Permit and LMO Required
- Bands performing at bars, pubs, restaurants, etc.
- Exotic/Erotic (new NOC title) dancers performing in a bar or club
- Actors, singers, crew, etc. in Canadian theatrical productions, shows, circuses
- Any individual involved in making films, TV, internet and radio broadcasts (with the exception of co-production agreements where actors, etc. will be issued work permits exempt from an LMO under R204, exemption T11)
- Any individual who will be in an employment relationship with the organization or business contracting for their services in Canada
- A performer in a Canadian-based production or show
- Rodeo performers or side show workers, e.g. rodeo clowns and announcers, horsemanship or trick riding displays, “halftime acts” or other specialty act entertainers
“Time-limited engagement” referred to in R186(g)(i)
Canadian Colloquialism 
Lady at Horton Donuts Counter: “Where ya from?”
Alan: “California”
Lady: “A bit nicer there, eh?”
Alan: “The weather, perhaps. The people, no, unless you are talking about the way they drive.”
Lady: “For sure. We sure are hell bent on gettin’ somewhere, eh?”
Canadian to U.S. Dollar Exchange
I have been learning a lot about fees and exchange rates. Perhaps this information will help you save a few quid.
On February 12, 2013, I recieved a Canadian check for $700 from my client as a deposit. When I deposited it in Wells Fargo Bank, the exhange rate made my $700 into $671.93, and then they charged me another $5.00 for a bank transaction fee.
I decided to ask for my balance of payment in cash. On March 18th, I deposited $400 CAN and it became $374.32 USD.
I had checked at the Airport Currency Exchange desk, but they were going to give me even less. I think they charged a 15% premium.
In Canada, they treat you a lot more fairly and I do not know how one might change Canadian dollars back into U.S. dollars, but when I exchanged my U.S. dollars into Canadian dollars the exchange rate seemed a lot fairer to me. If anyone has more insight on this, please leave comments so people know.
Disclaimer: I, Alan Sands, am not an attorney. I am not an immigration officer. I do not work for Homeland Security or any other legal or government entity. The information I supply here is for your guildance only. this information is not to be taken as evidence or to be used as proof in any way, shape, fashion or form. All this information may no longer be valid by the time you read it and may need to be verified.
June 2014 Addition: WARNING ! !
DO NOT use a Company Name, INC or LLC in your contract in any way. Make all contracts and agreements between an individual (you or the group leader) and the client. I am an LLC (Alan Sands Entertainment, LLC) and I can deposit US Checks in my business accounts as an LLC or as myself (either payable to Alan Sands Entertainment or Alan Sands). I have never had an issue in the USA using these two titles interchangably. However, in Canada it is different and if you want checks made payable to a company, they handle it differently. I do not know all the technical aspects of this other than you need a Canadian Tax ID # of some sort if you want to accept checks in Canada from Canadians made payable ot a company of any sort, so DO NOT use a company name, INC or LLC on you contracts of agreements when working in Canada or you will have to jump through hoops and over hurdles to get paid.
