Is the tax on dividends cheaper on stocks from canada than US stocks?

Question

Hi!

With all things being equal, if I live in the US, invest in a stock and have to pay taxes, which taxes on dividends are cheaper, the stock's whose company is in Canada or the US?

Answer 1

It would be highly likely that the US and Canada have a tax agreement resulting in Canada levying no tax on you, and the US handling your dividend tax;  if not, chances are you would incur double taxation (unlikely).

Answer 2

If you are a US citizen, you are responsible for US taxes however earned.  If Canada charges tax on dividends at the source, your broker will inform you.  You then file Form 1116 and claim the Canadian tax as a credit on your US tax up to the limit of the US tax.  If the Canadian tax exceeds your US tax liability on the dividends, you lose.