Inland Revenue to Tax International Entertainers at Upcoming Festival

International entertainers are to be taxed 20 percent of their income starting this St. Patrick’s Festival.
According to a notice released February 10, 2020, the Inland Revenue Department said that “pursuant to Section 40 (1) of Income & Corporation Tax Act (ICTA) that every person who makes any payment to a non-resident shall deduct tax from such payments in accordance with the Income & Corporation Tax Act.

“Therefore, you are expected to deduct 20% Withholding tax from fees payable to public entertainers.

“Consequently, it is an offense pursuant to Section 85(e) of the ICTA for any person who fails to pay over any tax which he is required to deduct,” said the notice which was signed by the head of the IRD Violette Silcott.

While the law is not a new one and was not being enforced, promoters for this year’s St. Patrick’s Festival were stunned by the announcement and questioned the timing. One promoter, who chose not to be identified, said he had already confirmed payment arrangements with his artists and it would be a breach of that contract to pay out less than the agreed amount. While he is aware, that the government has to collect it’s revenue, the timing means that most promoters, who barely break even on events will incur additional losses to cover the 20% tax.

Local promoters are said to be considering a call to the premier and minister of finance, who is currently off island, to discuss the matter.

Legally the tax can be withheld as it is within the rights of the government to collect it, in the same way it happens for local temporary employees before the salary is paid.

St. Patrick’s Festival has quickly grown to be the island’s most popular event, with visitor arrivals increasing each year. The majority of the more than 70 activities on this year’s calendar is being organised by private promoters, several of which are bringing top level entertainers to headline their shows. The festival is slated for March 6 to 18, 2020.

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