Dividend Tax Credit - Canadian receives US dividends

[Moving2Canada]

I am a Canadian citizen/resident and own a U.S. C-Corporation. The U.S. C-Corp is taxed at the US corporate tax rate and then pays me through dividends.

Are the US dividends, received in Canada permitted to receive the Dividend Tax Credit (~15% tax rate)? I’ve read conflicting advice…

https://www.theglobeandmail.com/globe-i ... e24226463/

Does it matter if the U.S. C-Corp is a true C-Corp or an LLC that elects to be treated as a C-Corp?

Thank you.

[nelsona]

I have never heard any conflicting information: US dividends do NOT qualify for the dividend tax credit.

[Moving2Canada]

Thank you. Perhaps I am mistaken in calling it the dividend tax credit...

Would US dividends receive a preferential tax rate in Canada?

The income would already be taxed in the U.S. (under the C-Corp, albeit at a lower corporate tax rate). When the C-Corp pays me in Canada through dividends is there a tax benefit? I understood it to be 15%, but perhaps that isn't the same as the dividend tax credit. or would it be taxed at my marginal rate in Canada (in addition to being taxed in the U.S. at the C-Corp)?

[nelsona]

Your personal US tax would indeed be 15%. But the income would also still be reported in Canada, as dividend income, yes, but not with any special tax break.