Principal Issues: To inform CVB of a modification to our interpretation 2013-050717.
Position: The artist does not receive a benefit from the producer for the contributions paid to the UDA.
Reasons: The employee receives a benefit from the UDA pursuant to paragraph 6(1)(a).
November 21, 2016
Collections and Verification Branch Central Administration Income Tax Directorate to the attention of Ms. Lise Boudreau Isabelle Brulotte, CPA, CA
2016-067576
Obligation to produce a T4A – F2013-0507171I7
The purpose of this memorandum is to inform you of an amendment to a technical interpretation we provided to you on March 7, 2014 regarding the production of a T4A slip in the case of an incorporated artist.
In technical interpretation F2013-0507171I7, we wrote the following:
"In your situation, the producer pays a fee to the Corporation, as well as amounts from two separate sources to the UDA, that is, the share it contributes in addition to the fees paid to the Corporation and the contributions withheld from those fees. For the fees paid to the Corporation, the producer is obliged to produce a T4A to the Corporation. As for the amounts he contributes to the UDA in addition to these fees, we are of the view that he must issue a T4A to the artist for these amounts, in accordance with Guide RC4157, page 17, respecting a person who provides benefits to employees of a party with whom he has contracted. For more information, we also refer to page 8 of T4130 - Employers' Guide - Taxable Benefits and Allowances, at http://www.cra-arc.gc.ca/E/pub/tg /t4130/t4130-13f.pdf. For the artist, these contributions are a taxable benefit which he must include in employment income under paragraph 6(1)(a) of the Income Tax Act, since he benefits through his employment with his corporation."
This paragraph should be replaced by the following paragraph:
"In your situation, the producer pays a fee to the Corporation, as well as amounts from two separate sources to the UDA, that is, the share it contributes in addition to the fees paid to the Corporation and the contributions withheld from those fees. For the fees paid to Corporation, the producer is obliged to produce a T4A slip to the Corporation. As for the amounts he contributes to the UDA (footnote 1) in addition to these fees, we are of the view that he should not issue a T4A slip to the artist for these amounts, as it is not the producer who provides benefits to the artist but the UDA. With respect to the contributions paid by the UDA to the artist, subject to the exceptions in subparagraph 6(1)(a)(i) of the Income Tax Act, the artist must include in the employment income earned from the Corporation the value of the benefits accruing from such contributions. In addition, the UDA or the COPAR Fund, depending on the legal reality, must issue a T4A slip to the artist including the sums paid as vacation."
If you require further information regarding this amendment, please contact Ms. Isabelle Brulotte at 613-670-9028.
Best regards,
Michel Lambert, CPA, CA, M. Fisc.
Manager
Employment Income Section
Business and Employment Income Division
Income Tax Rulings Directorate
Legislative Policy and
Regulatory Affairs Branch
FOOTNOTES
Due to our system requirements, footnotes contained in the original document are reproduced below:
1 Depending on the facts, the producer must pay amounts in addition to these fees to the UDA, ie XXXXXXXXXX% of the fees and royalties for the artist's pension plan and group insurance plan.