Tax Question--Dividend Income

This is our main tax information forum which deals with topics concerning Canadians living and working in the U.S., U.S. citizens contemplating working in Canada, and all aspects of Canadian and U.S. income tax and related adminstrative issues.

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Rickerbucks
Posts: 40
Joined: Tue Oct 25, 2005 3:43 pm

Post by Rickerbucks »

Your US Investment income will have a 15% withholding tax at source and the full dividend income would be taxed as "regular" income when in Canada. The dividend income would be added to your income and the 15% is used as a tax credit toward your CDN taxes.

Dividend income from CANADIAN sources recieves a very generous tax treatment. You may want to consider the merits of converting your $USD income investments into $CDN and buy Canadian dividend paying investments in Canada.

In addition, you may well find yourself getting tripped up with US state Securities Acts. Technically, when you move to Canada, a US financial institution is not suppose to allow you to maintain an investment account as it violates securities rules. Its not a situation that cannot be worked around but does represent a bit of a pain. Don't ASSUME you can mantain your current investment relationships. Investigate before making your move.

You would file tax forms in Canada and - assuming you are a US citizen - tax forms in the US although it is highly unlikely you will have to pay any taxes to the IRS. NONETHELESS, you still have to file with them.

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