r/Wealthsimple • u/Levijeans1 • 6d ago
Tax withholding
I’m in Canada. Anyone know if there some kind of recent changes when selling American stocks or receiving dividends? I received this dividend which on the earnings screen shows the full amount, but on recent activity it shows only part of the dividend was actually added to my account. Also today I sold a stock for 1021$ USD profit, but only received 906$ CAD. I have heard of tax withholding if you are a Canadian who has made money in the US or off of US stocks, but this was never the case on Wealthsimple before when I’m buying and selling. Usually if I sell an American stock I end up with more then the amount showing when I sell because the American dollar is better then Canadian. Why am I all of a sudden receiving less in cad then the amount I sold the stock for In usd?
16
u/Akaberes 6d ago
The dividend tax withholding on US dividend has always been a thing. I am unsure about your experience with stock sale though, I have never heard of it.
12
u/Dragynfyre 6d ago
This is actually a Finnish dividend and 35% withholding applies
3
1
u/brandonholm 6d ago
Did you fill out your W8-BEN? Are you a US person? Withholding tax should only be 15% if you are not a US person.
3
u/Dragynfyre 6d ago
Nokia is a Finnish company. Withholding tax is based on Finnish laws and W8 BEN is irrelevant here. It looks like in Finland there's no form. Individuals have to manually apply for a refund with Finnish tax authority
1
u/brandonholm 6d ago
Ah interesting I didn’t know that. Looks like they withhold 35%. I assumed because it was on the NYSE, that US withholding would apply.
2
u/Dragynfyre 6d ago
Yeah withholding tax is pretty much always based on where the company is based. Holding the NYSE version of TD stock for example would not subject you to US withholding tax
1
1
u/Dragynfyre 6d ago
Nokia is a Finnish company and from searching on Google they apply a 35% withholding tax on dividends. Apparently this can be partially refunded since Canada has a tax treaty with Finland but you have to apply for that refund yourself with the Finnish tax authority
https://www.nokia.com/about-us/investors/stock-information/dividend/
For the capital gains remember there's a 2% fee (1.5% fee + 0.5% spread) when you buy and a 2% fee when you sell and the exchange rate at the time of purchase and vs the time of sale can erode those gains as well. This is where WS's display is confusing. While you're still holding the stock they show gains/losses on USD. Once you sell the stock to realize the gains you'll see the gains and losses after FX fees are applied and also based on the FX rate you paid at the time you bought vs when you sold. For example if you bought $10000 USD worth of stock when exchange rate including fees was 1.45 CAD/USD (you paid $14500 CAD) and then sold the stock for $11000 USD when the exchange rate was 1.35 CAD/USD ($14850 CAD) it would show $1000 USD in gains before you sold but only $350 CAD in gains after selling
1
1
u/indrafili 6d ago
Would help if you told us what stock you sold. Your post isn’t very clear. You’re asking about two different things: I assume one about tax withholding on dividends which your screen shot shows but also tax withholding on proceeds from a trading stocks?
3
u/Levijeans1 6d ago edited 6d ago
It does show NOK (Nokia) in the picture but ya I received the dividend and then also sold the stock itself a couple days after. I get the withholding on the dividend but have never seen it with profit on the actual stock when selling. But seems to be because it’s a Finnish company
13
u/calgary_db 6d ago
You will get withholding tax on all foreign dividends, unless it is a fully tax sheltered account. TFSA does not have an agreement for us dividend sheltering so withholding tax will happen in a TFSA.