# ADR stocks - tax withhold on dividend



## Freedom2022 (Oct 14, 2021)

I look into buying ADR APPL. Upon research, I found there are 15% tax withhold on the dividend, even the stock is held in a RRSP account. Is it true?


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## Ponderling (Mar 1, 2013)

Not sure about the 15% inside an RRSP.
If it was, there are ways to claim on the annual tax return for foreign taxes paid that make it a bit less painful.


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## Covariance (Oct 20, 2020)

Quite probably true. I have come across this with foreign companies that trade on US exchanges, and ADRs (which are securities representing ownership of shares of foreign companies). The facts are case specific - what's your stock symbol? Essentially the US waives with-holding tax on dividends of US entities (companies, ETFs) held in your RRSP. But if your company is not American but listed on an American exchange and the tax is being with-held by another Country there is no such relief. Conversely it it is in fact an ADR then the US doesn't consider it to a US entity and therefore not eligible for the exemption. And since its held in your RRSP account you can not claim the foreign tax credit.

When held in non-registered account I have recovered through the foreign tax credit.


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## gardner (Feb 13, 2014)

Tax withholding will depend on the location where the underlying company is domiciled and their withholding rate and any tax treaty with Canada. Some places (eg: UK, HK) have no withholding tax for foreigners so your Unilever dividends would come through unmolested. Australia has 30% withholding so your Telstra dividend is going to take a haircut.

There are tables. This is the first one I found:








Withholding Tax Rates By Country For Foreign Stock Dividends


One of the factors that investors need to consider when investing in foreign stocks is taxes since it reduces the effective rate of return on an investment.




seekingalpha.com





Keep in mind that the tax treaties these places have with the US may not be identical to the one with Canada, so it's possible there'd be some variance.


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