Dividends paid by U.S. companies to non-U.S. residents are generally subject to U.S. withholding tax under applicable U.S. tax regulations.
For Canadian residents, U.S. dividend payments received in non-registered accounts and certain registered accounts may be subject to withholding tax.
Reduced Treaty Rate for Canadian Residents
Under the Canada–U.S. tax treaty, eligible Canadian residents may qualify for a reduced withholding tax rate of 15% instead of the standard 30% rate.
To apply the reduced treaty rate, a valid W-8BEN form must be completed and maintained on file.
The W-8BEN form certifies foreign tax residency status for U.S. tax withholding purposes.
W-8BEN Form Validity
When opening an account, you may be asked to complete a W-8BEN form as part of the account setup process.
A signed W-8BEN form remains valid:
For the calendar year in which it is signed
Plus the following three full calendar years
A new form will be required before the existing form expires to continue receiving applicable treaty withholding rates.