Are dividend payouts taxed twice?
Asked 5 years ago
When a company you have invested in pays out dividends to their shareholders, does the government tax you twice? If so, why? Is there a way to avoid double taxation?
Andrew Moran
Monday, August 16, 2021
If you are an American. or Canadian investor, and you invest in an American or Canadian stock, you will not be taxed twice on your dividends.
That said, if you are an American investing in a Canadian stock, you will pay income tax twice on the same profits.
For companies, they are taxed twice. The first is at the company's year-end when it is mandated to pay taxes on earnings. The second is when shareholders receive their dividend payouts.
The solution is to buy companies in your home country.
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