Knowledge BaseCross-border & specialty › Withholding Tax
Cross-border & specialty

Withholding Tax

Tax a country deducts at source from dividends or interest paid to a foreign investor before the money reaches you.

Part of the Cross-Border Investing (CA + US) course · Lesson 11 of 17
Formula
Withholding = Gross dividend × Withholding rate (e.g. 15% under the Canada-US treaty)

What it is

Withholding tax is an amount a paying country automatically subtracts from investment income, such as dividends, before it is sent to an investor in another country. The standard US rate on dividends paid to foreigners is 30%, but tax treaties reduce it; under the Canada-US treaty the rate on US dividends paid to Canadians is generally 15%. The investor receives the income net of this deduction.

Why it matters

Withholding tax directly lowers your real dividend yield on foreign stocks, and the impact depends on what account you hold them in. A key pitfall for Canadians is that the 15% US withholding on dividends is waived inside an RRSP (a retirement account) but is not recoverable inside a TFSA (a tax-free savings account), so account choice changes your after-tax return.

How it's calculated

It is the applicable treaty or statutory rate multiplied by the gross dividend or interest amount, deducted by the payer before you are paid.

How Quintarthai uses it

Quintarthai shows dividend yield in the Summary key-metrics grid on each stock's company page; that figure is the gross yield before any withholding tax your account may incur.

Cross-border note. Canada-US treaty: US dividends paid to a Canadian face 15% withholding, eliminated in an RRSP but not in a TFSA, while Canadian dividends paid to US investors face 15% Canadian withholding under the same treaty (versus the 25% Canadian domestic rate).

FAQ

Can I get withholding tax back?
Sometimes. In a taxable account you can often claim a foreign tax credit to offset it, but in a TFSA the US withholding on US dividends is generally lost and cannot be recovered.
Does withholding apply to capital gains?
Generally no; cross-border withholding usually applies to income like dividends and interest, not to capital gains on selling shares, though your home-country tax on gains still applies.
Related terms
See Withholding Tax on a real company
Open any stock in Quintarthai and explore it live across the screener and company pages.
Open the app →