Do you own an SME? One of your greatest accomplishments, ensuring your business’s continuity, cannot be taken lightly. Join the ranks of those who plan well in advance to make sure they keep their key employees. Succession is not a destination, it’s a journey that warrants the support of experienced experts. Take advantage of our approach.

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Over 90% of Quebec SMEs are family businesses. To successfully transfer the business to the next generation you need to follow a comprehensive, disciplined and well-thought-out process that involves a key human component. Take advantage of our unique, integrated business transfer approach.

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Event promoters, are you familiar with Regulation 105? This federal tax rule applies to contracts with an international artist in Canada.

Cultural events and festivals in Quebec include Canadian and international artists in order to present a diverse and competitive program. From a contractual stand point, signing a Canadian or international artist is essentially the same and involves negotiating the following: fees, equipment, accommodations, transportation, meals, etc. However, there is one difference for an international artist—the event promoter’s tax liability.

International artist’s fee instalments

A contract between an event promoter and an international artist to provide services in Canada for fees is covered by federal tax Regulation 105. Under this Regulation, the payer (event promoter) is required to withhold and remit an instalment equal to 15% of the fees paid to the non-resident (international artist) to the Canada Revenue Agency within a prescribed deadline. Furthermore, if the service is provided in Quebec, an additional amount of 9% must be withheld. To recover some or all of the withholding, the non-resident is required to file an income tax return in Canada.

This Regulation is simple to apply, however, failure to do so could cause problems for the payer, who could be liable for a penalty of 10% of the amounts to be remitted.

Streamlined procedure: prevention is better

Fortunately, the tax rules provide for relief mechanisms (waiver application) and a streamlined procedure for artists. It is to the benefit of any organization, from both an operational and financial perspective, to ensure proactive management of contracts that could be subject to Regulation 105. This simply requires that the application of Regulation 105 be determined at the time of signing a contract with a non-resident, making and remitting any withholding required or filing a waiver application.

Over the long term, failure to comply with Regulation 105 could prove to be expensive and time consuming for an organization’s directors. Whether they are making a voluntary disclosure or undergoing a tax audit, the directors will need to spend considerable time on this matter. Financially, these can be very costly situations. For example, it may be necessary to finance the unremitted payments (such as taxes, penalties or interest), depriving the organization of some of its operating budget.

Don’t hesitate to contact our experts to obtain good advice.

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Is Canada’s tax system fair? Are its tax rules distorted in any way? Do our tax laws respect the principle of neutrality? Under the leadership of Raymond Chabot Grant Thornton, Luc Lacombe, tax partner, and Brigitte Alepin and Manon Deslandes, professors at the Département des sciences comptables in UQAM’s École des sciences de la gestion (ESG UQAM), pooled their expertise to attempt to answer these questions while focussing, in particular, on a number of tax issues that impact families.

The authors sought to determine whether the tax rules are neutral where families are concerned. They concluded that given the many, and substantial, breaches of neutrality in the tax measures applying to families, the question is whether Canadian families are ultimately making decisions based on their needs or based on the tax measures that are available to them. This innovative study of the tax measures applying to Canadian families also presents some thoughts and considerations for overhauling Canada’s tax system.