Canada

Corporate - Withholding taxes

Last reviewed - 17 June 2020

WHT at a rate of 25% is imposed on interest (other than most interest paid to arm's-length non-residents), dividends, rents, royalties, certain management and technical service fees, and similar payments made by a Canadian resident to a non-resident of Canada.

Canada is continually renegotiating and extending its network of treaties, some with retroactive effect. This table summarises WHT rates on payments arising in Canada. The applicable treaty should be consulted to determine the WHT rate that applies in a particular circumstance.

Recipient WHT (%)
Dividends Related-party interest (1) Royalties (2)
Resident corporations and individuals 0 0 0
Non-resident corporations and individuals:      
Non-treaty 25 25 25
Treaty:      
Algeria 15 15 0/15
Argentina 10/15 (4) 12.5 3/5/10/15 (5)
Armenia 5/15 (4) 10 10
Australia (10) 5/15 (4) 10 10
Austria 5/15 (4) 10 0/10
Azerbaijan (8) 10/15 (4) 10 5/10
Bangladesh 15 15 10
Barbados 15 15 0/10
Belgium 5/15 (4) 10 0/10
Brazil (10) 15/25 (4) 15 15/25
Bulgaria 10/15 (4, 5) 10 0/10 (5)
Cameroon 15 15 15
Chile (5) 10/15 (4) 10 (6) 15
China, People’s Republic of (7, 10) 10/15 (4) 10 10
Colombia 5/15 (4) 10 10 (5)
Croatia 5/15 (4) 10 10
Cyprus 15 15 0/10
Czech Republic 5/15 (4) 10 10
Denmark 5/15 (4) 10 0/10
Dominican Republic 18 18 0/18
Ecuador 5/15 (4) 15 10/15 (5)
Egypt 15 15 15
Estonia (8) 5/15 (4) 10 0/10
Finland 5/15 (4) 10 0/10
France 5/15 (4) 10 0/10
Gabon 15 10 10
Germany (10) 5/15 (4) 10 0/10
Greece 5/15 (4) 10 0/10
Guyana 15 15 10
Hong Kong (7) 5/15 (4) 10 10
Hungary 5/15 (4) 10 0/10
Iceland 5/15 (4) 10 0/10
India 15/25 (4) 15 10/15/20
Indonesia 10/15 (4) 10 10
Ireland, Republic of 5/15 (4) 10 0/10
Israel 5/15 (4) 10 0/10
Italy 5/15 (4) 10 0/5/10
Ivory Coast 15 15 10
Jamaica 15 15 10
Japan 5/15 (4) 10 10
Jordan 10/15 (4) 10 10
Kazakhstan (8) 5/15 (4) 10 10 (5)
Kenya 15/25 (4, 5) 15 15
Korea, Republic of 5/15 (4) 10 10
Kuwait 5/15 (4) 10 10
Kyrgyzstan (8) 15 (5) 15 (5) 0/10
Latvia (8) 5/15 (4) 10 10 (5)
Lebanon (3) 5/15 (4) 10 5/10
Lithuania (8) 5/15 (4) 10 10 (5)
Luxembourg 5/15 (4) 10 0/10
Madagascar (11) 5/15 (4) 10 5/10
Malaysia (10) 15 15 15
Malta 15 15 0/10
Mexico 5/15 (4) 10 0/10
Moldova 5/15 (4) 10 10
Mongolia 5/15 (4) 10 5/10
Morocco 15 15 5/10
Namibia (3) 5/15 (4) 10 0/10
Netherlands (10) 5/15 (4) 10 0/10
New Zealand 5/15 (4) 10 5/10
Nigeria 12.5/15 (4) 12.5 12.5
Norway 5/15 (4) 10 0/10
Oman 5/15 (4) 10 (5) 0/10
Pakistan 15 15 0/15
Papua New Guinea 15 10 10
Peru (5) 10/15 (4) 15 15
Philippines 15 15 10
Poland 5/15 (4) 10 5/10
Portugal 10/15 (4) 10 10
Romania 5/15 (4) 10 5/10
Russia (8) 10/15 (4) 10 0/10
Senegal 15 15 15
Serbia 5/15 (4) 10 10
Singapore 15 15 15
Slovak Republic 5/15 (4) 10 0/10
Slovenia 5/15 (4) 10 10
South Africa 5/15 (4) 10 6/10
Spain 5/15 (4) 10 0/10
Sri Lanka 15 15 0/10
Sweden 5/15 (4) 10 0/10
Switzerland (10) 5/15 (4) 10 0/10
Taiwan 10/15 (4) 10 10
Tanzania 20/25 (4) 15 20
Thailand 15 15 5/15
Trinidad and Tobago 5/15 (4) 10 0/10
Tunisia 15 15 0/15/20
Turkey 15/20 (4) 15 10
Ukraine (8) 5/15 (4) 10 0/10
United Arab Emirates 5/15 (4) 10 0/10
United Kingdom 5/15 (4) 10 0/10
United States (9) 5/15 (4) 0 0/10
Uzbekistan (8) 5/15 (4) 10 5/10
Venezuela 10/15 (4, 5) 10 5/10
Vietnam 5/10/15 (4) 10 7.5/10 (5)
Zambia 15 15 15
Zimbabwe 10/15 (4) 15 10

Notes

  1. Interest: Canada does not impose WHT on interest (except for 'participating debt interest') paid or credited to arm's-length non-residents. Most treaties have an explicit provision for higher WHT on interest in excess of FMV in non-arm's-length circumstances.
  2. Royalties: A zero royalty rate generally applies to:
    • copyright royalties and payments for a literary, dramatic, musical, or other artistic work (but not royalties for motion picture films, work on film or videotape, or other means of reproduction for use in television), and/or
    • royalties for computer software, a patent, for information concerning industrial, commercial, or scientific experience (but not royalties for a rental or franchise agreement), or for broadcasting.

    Most treaties explicitly provide for higher WHT on royalties in excess of FMV in non-arm's-length circumstances. A zero rate of tax may apply in certain cases.

  3. The treaty has been signed, but is not yet in force. In the absence of a treaty, Canada imposes a maximum WHT rate of 25% on dividends, interest, and royalties.
  4. The lower (lowest two for Vietnam) rate applies if the beneficial owner of the dividend is a company that owns/controls a specified interest in the paying company. The nature of the ownership requirement, the necessary percentage (10%, 20%, 25%, or higher), and the relevant interest (e.g. capital, shares, voting power, equity percentage) vary by treaty.
  5. If the other state (Canada for the treaty with Oman) concludes a treaty with another country providing for a lower WHT rate (higher rate for Kenya), the lower rate (higher rate for Kenya) will apply in respect of specific payments within limits, in some cases.
  6. A 'most favoured nation' provision (see note 5 above) in Canada's treaty with Chile reduces the WHT rate on interest from 15% to 10% on 1 January 2019 (in certain cases, the 10% rate also applied between 1 January 2017 to 31 December 2018).
  7. Canada's treaty with China does not apply to Hong Kong.
  8. The treaty status of the republics that comprise the former USSR is as follows:
    • Azerbaijan, Estonia, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Russia, Ukraine, and Uzbekistan: New treaties entered into force (see table for rates).
    • Other republics: No negotiations are underway.

    Belarus, Tajikistan, and Turkmenistan will not honour the treaty with the former USSR. As a result, Canada will impose a maximum WHT rate of 25% on dividends, interest, and royalties until a new treaty enters into force. For other republics that comprise the former USSR, the status of the former treaty with the USSR is uncertain. Because the situation is subject to change, Canadian taxpayers are advised to consult with the CRA as transactions are carried out.

  9. For the United States, the reduced treaty rates apply, subject to the Limitation on Benefits article.
  10. The treaty or protocol is under renegotiation.
  11. The Canada/Republic of Madagascar treaty entered into force on 3 June 2020. Its provisions apply in Canada:
  • for purposes of non-resident withholding tax, to amounts paid or credited after December 31, 2020, and
  • for other taxes, for taxation years beginning after December 31, 2020.

         Before that, the rates are 25%.