Hells bells! On August 13, I’ll be in Vancouver for my sixth AC/DC concert. My roots, ironically, are classical – grade 10 piano, grade 6 theory, and a stretch when I thought I’d become a music teacher rather than a tax accountant. But classical music is work for my brain; I can’t read or study with it playing because I end up dissecting the timing and key changes. Classic rock and blues ask nothing of me – three chords, a simple beat, lyrics that are gloriously dumb, the perfect antidote to a day spent reading the Income Tax Act.

But old habits die hard, and by the time the house lights go up, part of my brain will drift toward an issue I’ve been thinking about at rock concerts for three decades: how does Canada actually tax a foreign rock band for playing here?

Every dollar AC/DC, or Bruce Springsteen, or Taylor Swift, or any other non-resident performer – earns for a Canadian show is caught by Regulation 105 of the Income Tax Act. It requires the payer, typically the promoter, to withhold 15% of any fee paid to a non-resident for services rendered in Canada and remit it to the CRA. Add another 9% for Revenue Québec if the show is in that province. It doesn’t matter whether the “performer” is the headliner or a lighting director flown in from Los Angeles – if they’re a non-resident paid for services performed on Canadian soil, Regulation 105 catches it. Back in black!

The withholding isn’t a final tax – it’s a deposit against the actual Canadian liability. Which tax treaty applies depends on who’s actually being paid. Most larger acts tour through loan-out corporations, so the applicable treaty turns on where that entity resides, not where the band started out. Whether that’s Article XVI of the Canada-US treaty, or something else, the mechanism works the same way: it preserves Canada’s right to tax entertainers’ Canadian-source income despite general rules that would otherwise shield a non-resident with no permanent establishment here.

That 15% comes off gross Canadian revenue at each stop. Merchandise brings a wrinkle: t-shirts aren’t caught by Regulation 105, but the royalty a band earns licensing its name to a merch company faces a 25% withholding rate. Multiply that across a stadium tour and a touring party of hundreds, and it’s easy to see why entire specialist practices exist to navigate these rules.

Money talks – right?! Let’s explore that. None of AC/DC’s actual numbers are public, but let’s take a shot in the dark. The stadiums in Edmonton, Vancouver, Montreal, Toronto and Winnipeg have combined capacity above 260,000. Assume the five Canadian dates run about 90% sold – roughly 235,000 paid fans – at an average ticket price of $180 – that’s a low estimate, trust me – would be close to $42.3 million in gross Canadian box office. Top-tier legacy acts typically command 85% to 90% of net box office once facility fees and taxes are stripped out, which works out to roughly 60% of gross – call it $25.4 million in Canadian-source performance income. Add merchandise – say $25 a head across those 235,000 fans is roughly $5.9 million in gross sales, with perhaps 35% of that – $2.05 million – flowing back as royalty, thus forcing a 25% withholding tax. On that combined $27.45 million, Regulation 105 and the 25% royalty withholding would pull more than $4.3 million before the tour bus leaves the country – that’s a whole lotta Rosie held by the Canada Revenue Agency (“CRA”) against a final tax bill that, once touring costs are deducted, is almost certainly a fraction of that.