Dividend Refund for Canadian Traders

Discussion in 'Professional Trading' started by mmuloin, Feb 3, 2003.

  1. mmuloin


    Does anyone know how to claim back the taxable dividend withheld by US brokers from Canadian residents?

    In other words, how do you avoid double taxation on US dividends for Canadian residents?

  2. Simply stated, I don't think you are entitled to a refund. You want to do business with american companies then you should pay taxes on the return you made from the american company to the USA. If you don't like it invest in toronto or something like that.
  3. I got a dividend from RD on which 25% Dutch withholding had taken place. Should the broker be reporting it at the gross amount and include an item for foreign tax withholding?

    It's just reported at the net amount. That means I'm paying tax on an amt already reduced by a foreign tax.
    This is making my head hurt.

  4. I think you have to pay the tax here, since this is where it was "earned". Avoiding double taxation depends on the canadian government. They may wave the taxation since it was already taxed here. At least that how they do it in the states. Hope this helps.
  5. lescor


    don't you just have to file a W-8 form with the broker? My understanding is that it instructs them not to withhold dividend and interest income because it wil be taxed by the government of the person who receives it. I did this with IB and never had money withheld.
  6. mmuloin


    I think the W-8 form applies to capital gains and interest earned only - not dividends.

  7. claim the foreign dividend tax credit.

    We have a tax treaty w/ the USA.
  8. FYI, this come from another canadian brokers, but this could help you:


    To: All account holders who invest in US securities and received dividends from US securities in 2002 or expect to receive US dividends in the future.

    The Internal Revenue Service (IRS) has put forward a new tax regulation with respect to US securities held in accounts in Canada.

    Kindly provide us with the following two documents:

    1. An official document with photograph (photocopy of a Passport, Driving License, Provincial Health Insurance card or Birth Certificate if the individual is under 21). A clear picture of the account holder must be on the photocopy;

    2. The completed W-8BEN "Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding" form. This form is available on the IRS website at the following link http://www.irs.gov/pub/irs-fill/fw8ben.pdf;

    It is essential that you complete these documents in order that we receive them by November 12, 2002. Not responding to this requirement will result in a higher rate of witholding tax on all U.S. dividends paid out during the current taxation year and thereafter. Your cooperation and prompt response are greatly appreciated.