Jérémy Levasseur, directeur en fiscalité canadienne et américaine

Dividends paid to a non-resident of Canada

International tax  —   —  Share

235

Question: Now that I am a non-resident, what if my Canadian companies and my trust (which resides in Canada) pay me dividends?

Answer: It should be noted that if one of the companies or the trust pays dividends to a non-resident, the non-resident tax must be deducted at source according to the tax rate applicable to the country of residence and only the net amount will be paid to the non-resident shareholder.

Withholding taxes on dividends to a non-resident are a maximum of 25%. The amount of the withholding tax (called Part XIII tax) must be remitted by the company / trust (regardless of the payer) before the 15th day of the month following the withholding otherwise huge penalties are applicable. For example, a dividend of $100,000 paid on June 17, 2023 will be subject to a maximum withholding of $25,000 and this $25,000 must be paid to the CRA before July 15, 2023 or face heavy fines. . Also, NR4 slips must be issued before February 28 of the following calendar year (February 28, 2024 in our example).

Consult us to know the applicable withholding rate, the 25% rate can be reduced according to the tax treaties, they vary according to the country and the type of shareholder.