The Canadian government imposes a withholding tax of 15 percent on a dividend paid by a Canadian corporation to a U.S. individual. The withholding tax will be creditable on the individual's U.S. tax return as an "in lieu of" tax.

Question

Quizplus · Accepted Answer

This is true. The U.S. and Canada have a tax treaty that stipulates that the withholding tax on Canadian dividends paid to U.S. individuals is 15 percent, and this tax is creditable on the individual's U.S. tax return as an "in lieu of" tax.

The Canadian Government Imposes a Withholding Tax of 15 Percent