No withhoding tax on part of my RRSP distribution?

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denisharlock
Posts: 27
Joined: Sat Feb 03, 2007 10:31 pm

No withhoding tax on part of my RRSP distribution?

Post by denisharlock »

Regarding RRSP or RRIF distributions to non-residents in the US:

I came across this on a web site:

Distributions paid to Unitholders who are non-residents of Canada for Canadian income tax purposes are normally subject to a withholding tax of 25% of the taxable amount of the distribution (i.e. interest and dividend income portion only), as required by Canadian income tax laws, unless a lower percentage is prescribed by a reciprocal tax treaty in effect between Canada and the non-resident's country of residence. For example, for individual Unitholders who are residents of the U.S., the reciprocal tax treaty between Canada and the U.S. prescribes a reduction of the withholding tax rate to 15% on the taxable amount of a distribution received from a trust. Please note that there is no withholding tax requirement on the portion of the distribution classified as a “return of capitalâ€￾.

Is this true ? No Cdn withholding tax on the 'non-taxable' portion?
Carson
Posts: 183
Joined: Wed Oct 27, 2004 1:00 pm
Location: Toronto

Post by Carson »

This refers to the standard Part XIII rules and Treaty rules applicable to the Trust units being held by a non-resident directly, i.e. not through an RRSP/RRIF.

The RRSP/RRIF withholding rules supersede what you have posted.
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