Entertainment or sports activities
You may need to withhold amounts from payments for entertainment or sports activities.
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Payments and fees
Payments and fees include:
- appearance payments
- player of the series awards
- bonuses
- endorsement fees
- expense reimbursements
- match payments
- preparation fees
- sponsorship payments
- performance fees
- fees for public speaking or providing sports commentary
- non-cash benefits, including the dollar value of significant prizes received such as a motor vehicle or holiday.
Entertainment activities
Entertainment activities include those of a performing artist using intellectual, artistic, musical, physical or other personal skills, by performing or presenting to an audience. These include:
- acting
- giving a musical performance
- performing in a play, film, tape, disc, television or radio broadcast
- daily allowances or payments intended to cover costs of living while in Australia
- dancing
- speaking publicly
- taking part in a display
- undertaking a promotional or similar type of activity.
Film industry
If film industry activities are undertaken in Australia, foreign resident withholding is required from payments to:
- a foreign agent of an actor
- individual members of the cast or crew.
Actors usually have a tax liability, regardless of the period of employment in Australia.
Foreign resident withholding also applies to payments made by foreign entities to people carrying out film industry work in Australia – for example, when a foreign company pays people associated with filming in Australia. The foreign entity has all of the obligations of a payer.
Withholding for foreign resident performers at festivals
Foreign acts often perform at Australian arts festivals or similar events. Many of these foreign performers are paid fees that are equal to or less than their total costs associated with the performance.
Generally, withholding is required from amounts paid to foreign resident performers for providing entertainment in Australia. To help festival organisers in managing visits by foreign performers, we will vary some of the withholding obligations that would generally apply.
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Varying the withholding rate
A variation of the withholding rate to nil will be granted where we are satisfied a performer or act will have either no, or little tax to pay in Australia.
If a fee paid to a foreign resident company to perform at a festival in Australia is $10,000 or less per touring party member (including support staff), a variation to nil will usually be granted. When applying for a variation on this basis you should provide details of the nature of the costs to be paid by the performers. There is no need to provide a detailed budget for the visit.
In some instances, variations are granted where the foreign performer's fees exceed $10,000.
Each case is considered on its merits. Where fees exceed $10,000 per touring party member (including support staff), you, the payee or their agent will be required to provide a detailed budget for the individual act.
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Australian business number for foreign resident performers
Where a withholding variation to nil is granted, there is no requirement to apply for an Australian business number (ABN). The variation notice we issue will remove the requirement to withhold where the payee does not quote an ABN.
Sports activities
Sports activities may include:
- athletics
- team sports
- individual sports
- other activities (including motor or horse racing).
A member of a sporting team is considered to be an employee of that team. If you (as the body which controls the team) make payments to a team member for participation in sporting events in Australia, you need to apply foreign resident withholding at the rates which apply to employees.
If you make payments to foreign residents who are not employees, and other entities for taking part in sports activities in Australia, you may also need to withhold tax from their payment. This may include payments to:
- individual players (including individuals providing services through their own corporate identity)
- sporting teams
- foreign sporting boards
- support staff (including coaches, trainers and sports psychologists).
Foreign resident withholding does not apply to activities undertaken as a recreational pursuit or hobby.
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Sporting and entertainment groups
Payments for entertainment or sports activities subject to foreign resident withholding also apply to sporting and entertainment groups including sporting teams, theatre companies, orchestras and touring bands. Amounts may also have to be withheld from payments to individual foreign residents who provide their services through their own businesses.
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Support staff and crew
You must withhold amounts from payments made to the foreign resident support staff and crew of foreign residents involved in sporting or entertainment activities unless they:
- are residents, for tax purposes, of a country with which Australia has an international tax agreement
- reside in Australia for no more than 183 days (6 months) in the financial year.
Entertainment support staff can include:
- directors
- producers
- photographers
- designers
- editors
- hairdressers
- choreographers
- bodyguards.
Sports support staff can include:
- coaches
- doctors
- personal trainers
- physiotherapists
- sports psychologists.
United States payees
You don’t need to withhold from payments made to an entertainer or sportsperson who is a resident of the United States if his or her gross income from working in Australia is less than $10,000 US in a financial year.