RE:RE:RE:Witholding Tax (Canadian TFSA)
you are correct. Canada has a tax treaty with most developed countries. Those treaties typically ensure that retirement vehicles such as an RRSP are not subject to withholding tax by other countries on foreign source income. However TFSAs are not recognized by other countries as retirement vehicles. Therefore unlike an RRSP any foreign withholding tax paid on accumulating income inside a TFSA is lost forever. Since Canada doesn't does accumulating income inside a TFSA there is no basis whatsoever for a foreign tax credit on tax withheld by foreign governments. Inside an RRSP any withholding taxes are nullified by treaty provisions since the RRSP is typically recognized as a retirement vehicle. A TFSA is a tax sheltered SAVINGS vehicle as far as Canada is concerned but unless covered by a reciprocal tax treaty TFSAs are NOT exempt from any withholding tax on foreign source income.