Q: This question relates to income tax….
Is tax deducted from dividends paid to this CDN ETF held in a TFSA ?
(listed in Canada, holding European stocks)
Would tax be deducted from a similar CDN ETF holding US stocks?
Is a TFSA the best place to place EBNK ?
Is tax deducted from dividends paid to this CDN ETF held in a TFSA ?
(listed in Canada, holding European stocks)
Would tax be deducted from a similar CDN ETF holding US stocks?
Is a TFSA the best place to place EBNK ?
5i Research Answer:
With ETFs, tax consequences are "passed through" to unitholders. Some European companies do have withholding taxes to Canadians, and in a TFSA withholding tax will apply, but only on the portion of dividends from those countries that charge it. The amount thus may vary depending on the fund's holdings. For US stocks, and a Canadian ETF holding US stocks, there will be withholding taxes in a TFSA.