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Non-Tech : Lions Gate Entertainment Corporation -- Ignore unavailable to you. Want to Upgrade?

To: Andrew Bailey who wrote (15)	2/27/1999 5:13:00 PM
From: Link Lady	Read Replies (1) \| Respond to of 137

This story may be positive for LGF. canoe.com Revenue Canada to give special attention to Hollywood stars By IAN JACK The Financial Post Revenue Canada will set up a special unit to speed through the system the tax returns of Hollywood movie stars working in Canada, the Financial Post has learned. The special unit is one of the changes the department is making in the face of protests from the multibillion-dollar Canadian film industry, which was outraged when Revenue Canada said it would start charging regular income tax rates to Americans coming north to work on movies and TV shows. The industry said the move could cost hundreds of jobs because Hollywood stars such as Gwyneth Paltrow and John Travolta would stay away rather than pay the top Canadian marginal rate of 47% of net income. Revenue Canada had been charging them just 15% of gross income as a withholding tax. Revenue Canada has already backed away from raising the tax to 47%. Herb Dhaliwal, the revenue minister, said Jan. 22 that the department would go back to charging just the withholding tax while a joint group of industry players and Revenue officials worked out a more permanent solution. While the group isn't expected to finalize all the details of how to treat the stars - and other entertainment workers ranging from directors to key grips and gaffers - until June, Revenue Canada has decided it will handle all movie people through a new group of officials dedicated to just that. Taxpayer watchdog Walter Robinson was critical. "You want Revenue Canada to be serving Canadians in general, not specific groups because they've complained loudly," said Mr. Robinson, federal director of the Canadian Taxpayers Federation. "It looks like the squeaky wheel is getting the grease. How about a special unit for processing my tax return faster?" But sources say the unit replicates one in place in Britain, and is intended to give Hollywood a greater degree of comfort it won't face hassles over tax payments. The government will borrow another British idea and, in a further concession to the industry, allow U.S. citizens working on movies and TV shows to get pre-production approval of the tax they will have to pay. Ruling on the tax owed before film workers set foot in the country will be a major part of the work of the unit. Mr. Robinson called this another perk unavailable to regular Canadians. The Canadian film and TV industry employs about 35,000 people and generates $2.3-billion a year in economic activity, and much of that comes from U.S. shows and movies shot in Canada using American actors. The film industry in British Columbia, home of Mr. Dhaliwal's riding, has been particularly vocal in its complaints. One producer, Fitch Cady, said several projects in B.C. had been held up pending a decision on the tax. Mr. Dhaliwal has said that ultimately the tax rate for U.S. actors will have to rise. But it almost certainly will not hit the level a Canadian would have to pay on the same income. Canada has treaties with most U.S. states and with the U.S. government to avoid double taxation, meaning any tax paid in Canada by Americans can be deducted in their home state. But there is no such treaty with California, where most big-name actors live, which is why they care about Canadian tax rates. Senior Canadian tax officials were in California late last week to tour the major studios and meet with state bureaucrats in an attempt to persuade them to pursue a treaty banning double taxation. But there is no incentive for the California government to sign one, since it could lead to more productions moving north.