FFH dividend

[valuecfa]

The Cdn/US tax treaty requires a 15% withholding tax at source.

 

I believe the following information is correct:

 

The Cdn withholding tax does not apply to Canadian corporation dividends paid to US shareholder that hold the investment in an IRA. 

 

Similarly, US withholding tax do not apply to US corporation dividends paid to Canadian shareholders that hold the investment in an RRSP.

 

 

-nodnub

 

 

 

This is right. I had a FWT taken out for my regular account at the rate of 15%. However, my Roth IRA account had no such withholding tax.

 

In regards to SharperDingaan, Canadians can hold Roth IRAs. For Canadians with US Roth IRAs: A new rule (2008) provides that Roth IRAs and similar plans are considered to be pensions. Accordingly, distributions from a Roth IRA (as well as other similar plans) to a resident of Canada will generally be exempt from Canadian tax to the extent that they would have been exempt from U.S. tax if paid to a resident of the U.S. Additionally, a resident of Canada may elect to defer any taxation in Canada with respect to income accrued in a Roth IRA but not distributed by the Roth IRA, until and to the extent that a distribution is made from the Roth IRA or any plan substituted therefor. The effect of these rules is that, in most cases, no portion of the Roth IRA will be subject to taxation in Canada.

 

However, where an individual makes a contribution to a IRA while they are a resident of Canada (other than rollover contributions from another Roth IRA), the Roth IRA will lose its status as a "pension" for purposes of the Treaty with respect to the accretions from the time such contribution is made. Income accretions from such time will be subject to tax in Canada in the year of accrual.