VFV etf

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Is VFV.to eft more suitable for rrsp account?

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Asked on March 7, 2024 10:17 am
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VFV is going to be charged withholding tax on the distribution even in an RRSP.

The tax treaty between the United States and Canada allows Canadians to avoid paying withholding taxes on US dividend paying stocks if they shelter it in a retirement account like an RRSP. However, VFV is a Canadian domiciled fund, and doesn't qualify for these rules.

A Canadian listed ETF holding US listed ETFs or stocks is subject to withholding taxes, even in an RRSP, while a US listed ETF or US listed stocks would not be.

For this reason, you'd pay no withholding tax holding VOO, the US domiciled S&P 500 ETF. However, you'd pay a withholding tax owning VFV, which is simply a fund that holds VOO, because it is a Canadian domiciled fund that holds a US domiciled fund or stock.

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Posted by Dan Kent
Answered on March 7, 2024 3:38 pm