Can I Buy U.S. Stocks in a Canadian TFSA?
🚀 Quick Answer
Yes, you can buy U.S. stocks in a TFSA — but dividends may be subject to a 15% U.S. withholding tax, since the U.S. doesn’t recognize the TFSA as a retirement account.
Explanation
Canadian investors can hold U.S. equities inside a TFSA without paying Canadian tax on capital gains or dividends. However, the U.S. automatically withholds 15% of dividends paid to foreign investors — and unfortunately, you can’t recover this tax when it’s inside a TFSA.
RRSPs, on the other hand, are exempt from this withholding under the U.S.-Canada tax treaty.
Related Reading
- Read our Investing in Canada Beginner’s Guide
- See our TFSA vs. RRSP comparison
- Learn more in depth about TFSAs
