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A Guide to Easy Border Crossing

Touring requires preparation and organization. One element of touring that demands much of both is border crossing. Crossing a border to work in a foreign country can be nerve-wracking and difficult, if you are not prepared. With thorough preparation you can ensure easy border crossings while on tour.

The first consideration should be work permits. Every foreign artist who performs in the US is required to have a temporary work visa. I highly recommend the P-2 Visa, which can be processed through the Canadian Federation of Musicians (http://www.cfmusicians.org/services/work-
permits). When making your initial entry into the US, you will need to carry the USCIS approval notice (or a copy). If band members are entering the country separately, everyone should have their own copy.

Make sure that all of your travel documents are in order. All passports must be valid at least six months beyond the last performance date. If you do not hold a Canadian or US passport, you will also be required to obtain an Electronic Travel Authorization (eTA) (www.cic.gc.ca/english/visit/eta.asp), to fly into Canada. Other countries require all foreign passports to be valid for a certain number of months from the date of entry or planned exit. Look into the requirements for each country you intend to visit.

If crossing by land, you may need to show vehicle ownership; if travelling by air, you will need to show a return ticket. You may be asked to show proof of accommodation and/or proof that you can support yourself while in a foreign country. If you are a parent travelling with a child, you will need written travel permission from any other guardian or parent.

Also, before traveling, look into any possible issues of criminality. Any prior conviction, however minor, can cause problems at the border and should be dealt with well in advance with either a waiver of ineligibility or a criminal rehabilitation application.

You must also plan for transporting equipment and merchandise. Understand the border restrictions in relation to prohibited goods or substances. If you are travelling with instruments and other gear, consider applying for an ATA Carnet, a document that can minimize hassles and fees at the border (www.chamber.ca/carnet). In the absence of an ATA Carnet, have a complete inventory with you. Whenever possible, include descriptions, serial numbers, purchase dates, and values. Having your gear organized in numbered cases will make it much easier when border officials need to check the gear.

Be aware of restrictions on crossing a border with instruments containing endangered species. There’s no point in risking confiscation of your gear. Check out the Musical Instrument Passport program (www.fws.gov/international/permits/by-activity/musical-instruments.html).

If you are flying, make sure you know the airline’s rules and regulations for transporting instruments. Invest in high-quality cases to protect them from damage.

If you are carrying merchandise, be sure to declare it and make sure it is properly labelled or properly stickered (for promotional copies). Have the invoice of manufacture with you. Keep in mind the option of sending merchandise via courier or mail, or having it manufactured in the country to which you are touring. For large quantities of merchandise, use a customs broker.

Finally, consider your strategy for interacting with border crossing officials. Appearances are important. You need to look and sound like you are a law-abiding citizen, respectful of authority, who poses absolutely no risk. Turn off the radio or iPad, remove ear buds and sunglasses. If crossing by land, your vehicle should reflect this as well—neat and clean. Rehearse straightforward answers to typical questions you might be asked by officials. Coach everyone in your group to be honest and forthright, and to answer questions succinctly without volunteering additional information. 

With sufficient knowledge and preparation, border crossing can be simple.

Robert Baird is President of Baird Artists Management Consulting and an expert in international touring. Involved in the performing arts for more than 50 years, he was president of NAPAMA, and Treasurer of FEO. He is currently president of OAPN and APAP Showcase Coordinator. Contact him at robert@bairdartists.com.

Central Withholding Agreements in the US

If you are a nonresident alien (non US citizen) entertainer performing in the US, you are subject to 30% tax withholding from gross income. There are situations in which the withholding requirement does not apply (certain corporations, nonprofit organizations, and certain treaty provisions), but generally most artists should take advantage of central withholding agreements (CWA) with the US Internal Revenue Service (IRS) to reduce this withholding amount.

A CWA is an agreement entered into by the entertainer, a designated withholding agent, and an authorized representative of the IRS. The agreement can cover one event or a tour and the withholding percentage required will be based on an income/expense budget provided by the artist, indicating net profit/loss. In order to access a CWA, your previous US income tax returns must be filed and US taxes paid (or you have arrangements to pay). You also must file a US tax return for the year in which the CWA is granted.

A designated withholding agent must be a completely independent third party (often, it is a venue, agent, manager, accountant, attorney, etc.). The agent is required to withhold and forward to the IRS withholding tax according to the terms of the CWA and provide a final accounting of the artist’s income and expenses.

The advantages of a CWA is that it allows for one withholding agent (rather than several, as on a tour) and the withholding percentage is based on the estimated ultimate tax liability, rather than the blanket 30% withholding required by law. Only individuals may apply for a CWA and for groups of artists in a band or other ensemble, each artist must apply separately.

Filing a CWA application should include:

  • Application form 13930
  • Itinerary of events to be covered by the CWA
  • Income/expense budget with contracts, deal memos, projected merchandise sales, etc.
  • Power of Attorney or Appointment of Representative form

The regulations for applying are extremely strict in regard to the application date. If the application is received less than 45 days prior to the first event on the CWA application, it will be rejected. The optimum time to apply for a CWA is 90 days before the first event. If you cannot meet these deadlines and the 30% is withheld, you can always apply for a refund (if one is applicable) by filing a US tax return for the year in which you had monies withheld.

When a CWA has been fully executed and signed by the entertainer, the designated withholding agent, and the representative of the IRS, the designated withholding agent assumes responsibility for withholding and reporting tax on the entire tour or event, relieving all other withholding agents from withholding, and eliminating the chances of over-withholding.

Sometimes a foreign entertainer will try to rely on the submission of W-9 or W-8BEN forms or assume that they can rely on a tax treaty provision that allows a certain level of tax-free income. Strictly speaking, the W-9 or W-8BEN form does not negate the withholding because the income is treated as flowing directly to the artist (unless an arm’s-length corporation is involved). Any treaty provisions cannot be considered since the amount of income earned will not be determined until the year’s end. There are, however, certain countries (Armenia, Azerbaijan, Belarus, Georgia, Hungary, Kazakhstan, Kyrgyzstan, Moldova, Poland, Russia, Tajikistan, Turkmenistan, and Uzbekistan) with a treaty-based provision that exempts all US earned income from taxation.

A CWA is a something every foreign artist coming to perform in the US should consider.

—I welcome your questions and concerns.
Please write to me at: robert@bairdartists.com. While I cannot answer every question I receive in this column, I will feature as many as I can and I promise to answer every e-mail I receive.

contract considerations

Contract Considerations for Artists Crossing Borders

robert-bairdby Robert Baird, President Baird Artists Management (BAM!)

When you are negotiating to perform in another country, there are certain considerations that need to be taken into account. There may be language problems, or cultural differences. Be sure you are clear on what is being said or written and know that some cultures may not respond as quickly as necessary, especially when the time to obtain a visa has to be factored into preparations for the performance. It is a good idea to have contracts finalized in plenty of time to allow for the processing of paperwork required to enable the artist to enter the country and perform.

I have decided to start trying to secure some gigs across the border. I was wondering if there are any additional considerations I should think about in negotiating contracts in another country.

Here are a few other things to consider:

1) You need to determine who is going to apply for the required visas, work permits, etc., and who is responsible for the costs. Sometimes, the person hiring you can facilitate, and even obtain the required paperwork. But if the artist has to negotiate the application process, then it is important to know who will pay the required fees.

2)  In North America, with the fluctuating Canadian and American dollar, a decision has to be made as to which currency should be used for payment of the terms of a contract, and even what rate of exchange will be used, and when it will be applied to the payment. The same considerations would apply to foreign contracts: what currency will be used for payment and when will payment be made. In addition, how the payment will be made is important: will it be by cash, wire transfer, money order, check, or cheque? In the latter case it may be impossible or expensive to cash a cheque drawn on a bank in another country, and this needs to be clarified. If there are processing fees, who will pay them?

3) Who will be paying the artist’s travel costs and accommodation? These costs need to be factored into the artist’s fee and should be addressed in the contract negotiations.

4)  More often, presenters are asking artists to provide their own liability insurance and, again, this is an added cost for the artist. It is possible that the presenter can add the artist to an existing insurance policy and this should be discussed.

5)  In the event that a performance needs to be cancelled, due either to force majeure or for any other reason (acceptable reasons should be clarified in the contract), there should be an agreement as to the consequences for either party. Does the artist have to cover some of the presenter’s costs, if he or she cancels? Does a deposit have to be returned? Does the presenter have to cover some of the artist’s costs, if he or she cancels? And is the presenter liable for the entire fee, if the cancellation comes too close to the concert date?

6)  Many jurisdictions are required to withhold taxes from an artist’s fee, unless the artist can provide a waiver of withholding. Investigate ways to avoid withholding.

7)  How disputes are to be handled should be specified in the contract, along with a specified jurisdiction to avoid having to fight a legal battle in another country.

In general, clear and constant communication will make life a lot easier for the artist negotiating terms to cross a border to perform.

—I welcome your questions and concerns.
Please write to me at: robert@bairdartists.com. While I cannot answer every question I receive in this column, I will feature as many as I can and I promise to answer every e-mail I receive.

Pour lire cet article dans la visite Français: www.internationalmusician.org/considérations-contractuelles-pour-les-engagements-à-l’étranger.


La fiscalité canadienne et les dispenses pour les artistes étranger

Ignorer les exigences fiscales d’un pays étranger peut entraîner des complications imprévues, comme l’illustre bien la lettre qui suit :

Nous avons envoyé un ensemble américain au Canada en 2013. Nous avions obtenu au préalable l’approbation d’une dispense de retenue R105, mais nous n’avions pas réalisé qu’il nous fallait produire une déclaration de revenus canadienne. Nous avons donc été surpris lorsque, l’été dernier, une nouvelle demande de dispense nous a été refusée. Le présentateur a retenu 15 % de notre rémunération à la source et nous aimerions récupérer cette somme. Comment devons-nous procéder?

Les formulaires de dispense R105 sont utilisées au Canada pour demander la réduction ou même l’élimination de la retenue à la source de 15 % des sommes payées pour les services rendus au Canada par un non résident. Toutefois, même si vous obtenez l’approbation d’une demande R105, vous êtes tenu de produire une déclaration de revenus canadienne l’année suivante. À défaut, vos demandes subséquentes de dispense vous seront refusées, et ce, tant et aussi longtemps que vous n’aurez pas régularisé votre situation. Cette exigence est clairement indiquée dans la lettre d’approbation de l’Agence du revenu du Canada. En effet, obtenir une dispense R105 ne règle pas toutes les obligations de l’artiste étranger se produisant au Canada. Sa dette fiscale finale sera établie après évaluation de sa déclaration de revenus canadienne.

Il existe deux types de demandes de dispense R105 :

1) Les dispenses fondées sur une convention

Ce type de dispense de retenue est accordé s’il y a une convention fiscale entre le Canada et un autre pays. Actuellement, plus de 80 conventions fiscales sont en vigueur. Pour en consulter une liste, rendez-vous à l’adresse suivante : http://www.fin.gc.ca/treaties-conventions/in_force–fra.asp

En règle générale, là où il existe un traité, une dispense de retenue sera accordée si un artiste étranger gagne moins de 5 000 $ par année au Canada et respecte certaines restrictions relatives à la durée de son séjour. Pour les artistes américains, ce montant est de moins de 15 000 $.

2) Dérogation fondée sur les revenus et dépenses

Si vous n’êtes pas admissible à une dispense en vertu d’une convention fiscale, vous pouvez tout de même demander une dérogation fondée sur une estimation de vos revenus et dépenses. Vous soumettez alors une évaluation sommaire de votre revenu brut au Canada et en déduisez les dépenses admissibles. Votre revenu net est ensuite  évalué pour déterminer votre obligation fiscale. Selon le résultat, il se peut qu’on vous accorde une dispense ou que l’on réduise le montant de la retenue exigée. Les dépenses admissibles incluent les frais de services professionnels (gérants, agents, etc.); l’hébergement ou les frais de repas; les frais du voyage pour se rendre au Canada et des déplacements à l’intérieur du pays entre les lieux de vos engagements; le kilométrage pour les véhicules personnels ou de location utilisés au Canada; la location de matériel autre que les véhicules, et la rémunération d’autres personnes rendant des services au Canada, par exemple des employés ou des sous-traitants résidents ou non résidents.

[Note : La rémunération versée aux non résidents est assujettie à la retenue à la source de 15 %, à moins que vous n’ayez obtenu au préalable une dispense R105 ou R102 pour eux également.]

Que vous ayez obtenu une dispense ou non, vous devriez toujours produire une déclaration de revenus canadienne. De toute façon, c’est un préalable à l’obtention de dispenses ou de dérogations futures et, d’autre part, il se peut qu’on vous rembourse des sommes retenues. Les particuliers doivent soumettre une déclaration T1 au plus tard le 30 avril, et les sociétés, une T2 au plus tard le 30 juin de l’année civile suivant les engagements. De plus, si vous avez fait appel à des sous-traitants ou à des employés, vous devrez remettre des feuillets T4A-NR à chaque personne, verser les sommes que vous avez retenues au receveur général du Canada au plus tard le 15 du mois suivant celui du paiement au non résident, et produire une déclaration de renseignements T4A‑NR (les feuillets T4A-NR et le rapport sommaire) au plus tard le dernier jour de février de l’année suivant celle où les montants ont été payés. Notez que le défaut de produire les déclarations de revenus et les formulaires comme indiqué entraîne des pénalités non négligeables.

Les artistes non résidents doivent être conscients des exigences canadiennes en matière de dispense et de déclaration de revenus lorsqu’ils viennent se produire au pays.

Je vous invite à me faire part de vos questions et de vos préoccupations en m’écrivant à robert@bairdartists.com. Bien que je ne puisse pas répondre à toutes vos questions dans ma chronique, j’en traiterai le plus grand nombre possible et je promets de répondre à tous vos courriels.

Canadian Waivers and Taxation for Foreign Artists

robert-bairdby Robert Baird, President Baird Artists Management (BAM!)

Ignoring the taxation requirements of a foreign country can lead to unforeseen complications, as this letter illustrates:

We sent an American ensemble to Canada in 2013. We had obtained an approved R-105 waiver in advance. Consequently, no taxes were withheld. We did not realize that we needed to file a Canadian tax return. When we applied for a waiver last summer, we were surprised to have it rejected. The presenter withheld 15% and we’d like to get it back. What do we do now? 

R-105 Waivers are used in Canada to reduce or eliminate the 15% required withholding on services provided in Canada by a nonresident. Even with an approved R105 waiver in Canada, you are still required to file a Canadian income tax return the following year; otherwise, subsequent waiver applications will be denied until your tax filings are up-to-date. This is made clear in the approval letter from Revenue Canada. R105 waivers do not represent the final Canadian tax obligation of a foreign artist: the ultimate tax liability can only be determined after an assessment of a Canadian tax return.

There are two types of R105 waiver applications:

1) Treaty-based waivers—Treaty-based waivers are granted if there is a treaty between Canada and another country. Currently, there are more than 80 tax treaties in force. (Visit http://www.fin.gc.ca/treaties-conventions/in_force-eng.asp for a list.) Generally, where there is a treaty, if an artist earns less than $5,000 a year in Canada, with certain restrictions on time spent in Canada, a waiver will be granted. For American artists the amount is less than $15,000 per year.

2) Income/expense waiver—If you do not qualify for a treaty-based waiver, you can still apply for an income/expense waiver. You submit a summary of your gross Canadian income and claim applicable expenses against that amount. The net income is then assessed for tax liability. A waiver may be granted or the required withholding may be less than the required 15%. Applicable expenses include: professional service fees (managers, agents, etc.); accommodations and/or meals; travel to Canada and between places in Canada; mileage for personally owned or rented vehicles used in Canada; equipment rental other than vehicles; and remuneration paid to other persons providing services in Canada (for example, resident or nonresident employees, or subcontractors).

[Note: Fees paid to nonresidents require the 15% withholding unless you acquire an approved R105 or R102 waiver for them as well].

Whether you received an approved waiver or had monies withheld, you should always file a Canadian tax return. It’s a requirement for future waiver approvals and you may receive a refund of monies withheld. Individuals should file a T1 return by April 30 and corporations a T2 return by June 30 of the following calendar year. In addition, if you used subcontractors or employees, you will need to issue T4A-NR slips to each individual, remit withheld monies to the receiver general of Canada by the 15th of the month, following the month in which the payment was made to the nonresident and file a T4A-NR information return (T4A-NR slips and summary form) by the last day of February in the year following the year in which the amounts were paid. Note that there are significant penalties for failing to file tax returns and required forms as indicated.

Nonresident artists need to be aware of waivers and tax filing requirements when coming to Canada to perform.

—I welcome your questions and concerns.
Please write to me at: robert@bairdartists.com. While I cannot answer every question I receive in this column, I will feature as many as I can and I promise to answer every e-mail I receive.

To read this article in French visit: www.internationalmusician.org/la-fiscalite-canadienne-et-les-dispenses.