COMMERCE 4SB3 Lecture Notes - Lecture 11: Dividend Tax, Financial Adviser, Withholding Tax
7 Dec 2018
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Eligible dividends are taxed at higher rate than non-eligible dividends (depends what corporate tax rate company is paying) Our tax system should be integrated which is why there"s two different tax rates. Gross up rate for eligible dividend is 38%, the gross-up rate for on-eligible is 16% When you get dividends from a foreign company, there will be withholding tax because that government wants tax paid for those dividends. Many countries enter into international tax treaties to reduce total paid and to ensure you don"t pay tax twice. This says that if you pay tax for another country, canada will give you a credit. If you invest with after-tax money, don"t pay tax on the full amount again, only pay tax on the incremental difference. Parent gives their kids who don"t have income the money or property that is making income, it goes back to parent"s return. For minors (under 18), income attribution applies but not capital gains.
