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Tax Implications of Foreign Dividend Investing

Posted on May 13, 2008

If you invest in US-listed stocks or foreign stocks that trade on U.S. exchanges as American Depository Receipts (ADRs), you need to be aware of some tax implications:If you hold American stocks in your investment account, you will be subject to a 15% withholding tax on dividends (for Canadian residents; Check with your broker that you are correctly classified.). You will be paying your marginal tax rate on dividend income because it does not qualify for favourable treatment available to dividends from your Canadian stock holdings. You do get a credit for the withholding tax when filing your C...

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