Random tax stuff – withholding

A dividend payment from Canadian source dividends is subject to Canadian non-resident tax at a rate of 15%.

If the corporation is registered on the United States stock exchange, then it becomes IRS eligible, making the dividend payment subject to back-up withholding at the rate of 28%,

The 28% back-up withholding amount is reduced to 15% – the negotiated US – Canada treaty rate provided the holder submits a valid IRS form W9.

Without a W9, the holder is subject to 43% withholding tax (28% + 15%)

Author: Warren Orlans

Welcome to inTAXicating. inTAXicating has been published since 2008 to provide clarity around Canadian taxation issues, primarily related to the Canada Revenue Agency. As the primary author, Warren Orlans, has over 20-year's experience in the taxation industry, 11 of them working for the Canada Revenue Agency (CRA), and 7-years working in the private sector Managing the tax departments for large financial institutions. If you have a collections, compliance or audit issue with the CRA, inTAXicating is the place you need to contact. inTAXicating works in strategic partnership with amazing accountants, tax lawyers, insolvency practitioners, mortgage brokers, debt counselling experts and much more. If you have a tax question, email it to info@intaxicating.ca or to intaxicatingtaxservices@gmail.com.

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