Q: Tax Q - Are distributions from a money market ETF like ZMMK taxed as income or dividends?
If it's income, are there any tax differences in picking the Canadian ZMMK vs BIL, which is a US name?
If it's income, are there any tax differences in picking the Canadian ZMMK vs BIL, which is a US name?
5i Research Answer:
This article will explain the complicated rules. Generally, to avoid withholding taxes on US fixed income ETFs, it is better to own a Canadian listed ETF that invests directly. BIL may be subject to withholding taxes (not in a RRSP). ZMMK is taxed as interest income.