US stocks are among the most popular investments for Canadians. Dividend-paying US stocks — like those in the S&P 500 — withhold US tax on dividends paid to non-US shareholders. Without proper documentation, Canadians are withheld at 30%. With an ITIN and the Canada-US Tax Treaty, this drops to 15%.
US Dividend Withholding: What Canadians Face
When a US company pays dividends to a Canadian shareholder, it is required to withhold US tax on that payment. The default withholding rate for foreign shareholders is 30%. However, the Canada-US Tax Treaty (Article X) reduces this to:
- 15% for portfolio investors (most individual Canadians)
- 5% for substantial shareholders (owning 10%+ of voting shares)
To claim the reduced rate, your Canadian broker must submit W-8BEN documentation with your ITIN to the US payer.
RRSP and TFSA: Different Treatment
RRSP: The Canada-US Treaty specifically exempts RRSP accounts from US withholding on US dividends. The 0% rate applies for US dividends inside an RRSP under Article XXI(3). No W-8BEN or ITIN is needed for the RRSP exemption — it's account-level.
TFSA: The treaty does NOT exempt TFSAs from US dividend withholding. US dividends in a TFSA are withheld at 15% (if your broker has W-8BEN on file) or 30% (without documentation). Many Canadians prefer holding US dividend stocks in their RRSP to avoid this withholding entirely.
Non-registered account: 15% withholding with W-8BEN and ITIN, or 30% without.
How Canadian Brokers Handle W-8BEN
Most major Canadian brokers (TD Direct, Scotia iTrade, Questrade, Interactive Brokers Canada, CIBC Investor's Edge, RBC Direct Investing) file W-8BEN on behalf of their clients for US dividend withholding purposes. They typically require your SIN (for Canadian regulatory purposes) but may also accept your ITIN for US withholding documentation.
For US-domiciled ETFs held in taxable accounts, your ITIN ensures the 15% treaty rate applies rather than 30%.
ITIN Plus for Canadian Investors
$99, 8–14 weeks, IRS Certified Acceptance Agent. Email apply@itinplus.com. Particularly valuable for Canadians investing directly in US stocks through US brokerage accounts.
Frequently Asked Questions
What is the US dividend withholding rate for Canadians?
Without treaty documentation: 30%. With ITIN and Canada-US Treaty claim (W-8BEN): 15% for most individual investors, 5% for substantial shareholders. RRSP accounts are exempt from withholding under the treaty (0%).
Are US dividends in my RRSP withheld?
No. The Canada-US Tax Treaty (Article XXI) exempts RRSPs from US dividend withholding. This is one of the key tax advantages of holding US dividend stocks inside your RRSP.
Are US dividends in my TFSA withheld?
Yes. TFSAs are not covered by the Canada-US Treaty's RRSP exemption. US dividends in a TFSA are withheld at 15% (with W-8BEN) or 30% (without). Many Canadians avoid US dividend stocks in their TFSA for this reason.
How long does it take to get an ITIN?
8–14 weeks from the IRS submission date. Apply through ITIN Plus for $99.
Do I need an ITIN if my Canadian broker already filed a W-8BEN for me?
Your Canadian broker files a W-8BEN certifying your foreign status, but this form is most effective with your ITIN for a direct treaty claim. Without an ITIN, the form may not include an explicit treaty claim, which can affect withholding rates on certain types of US income.