I got stocks from my work, even tho I have a W8-BEN on file, they took 47% Withholding at source (US).
The documents my brokers sent me clearly indicates the taxes were sent to the Ontario government.
-is this possible ? Should i chase the Ont Gov for the credit ? Should i simply claim a Foreign Tax Credit ?
It’s my understanding that I cannot recover the withholding tax ?? But only get credit for it ??
Thanks.

Does anyone know if there are withholding taxes for RSP LIRAs? (Locked-In Retirement Accounts)?

I would like to hold U.S. dividend-paying stocks in my RSP LIRA (stocks like Johnson & Johnson), but I do not want to be penalized for holding those U.S. stocks there by paying any withholding tax.

I have my LIRA because I contributed to a pension at my former employer.

@ Shane: Mutual funds that have foreign investments are subject to withholding tax. The fund manager pays the withholding tax and passes your portion along to you. The withholding tax will be reported on Box 16 of the T3.

I have a similar article on my site. Click on my name to view.

If tax is withheld you should receive a tax receipt stating such. Then you can claim it back on your taxes. If your in a non-taxable account, you are pretty much screwed. If you don’t receive a tax receipt at the end of the year it means you were not subject to the taxes or the Mutual fund ate the cost and packed it into the MER.

Will you have to pay US tax if you hold the e-Series funds in your TFSA?

I personally prefer to only put fixed income securities in my TFSA. The reason being that interest income is the most heavily taxed form of distribution and hence that category has the most to be gained from sitting inside a TFSA. But with stocks having been recently pounded into a pulp, it is undeniably VERY tempting to put equities into a TFSA account. Here’s my argument for leaving equities out of a TFSA:

1. Capital losses cannot be written off in a TFSA account.
2. It is unclear whether the interest paid on a leveraged purchase of an income investment inside a TFSA would qualify for a tax deduction. I am erring on safe side with CRA and assuming that the answer is NO.
3. If you manage to get a large capital gain in a fully taxable cash account, that capital gain is tax advantaged already. You don’t pay tax on 100% of the capital gain AND you can offset the gain with any losses from a “dog” you might have accidentally purchased. See point #1.
4. The maximum annual TFSA contribution is $5K. If your brokerage charges you $29 per transaction (since your balance is only $5K, well below most brokerages’ thresholds to get the lower commission rate), then on a RELATIVE basis the commissions are quite high.
5. It is difficult to buy exactly $5000 of a stock. Whatever leftover dollars in your TFSA account are sitting around doing nothing waiting until next year’s contribution. So if you buy 100 shares of XYZ for $48 a share, then in many cases you will have about $200 of cash collecting no interest until next year when you add another $5K to make it $5200 to invest. In contrast, you can put exactly $5K in a GIC.

Apparently, investors who are below the 15% tax bracket can get a refund on the withholding tax from the CRA. Canadian Financial DIY wrote about this but I’m not in that situation.