10/25/09 Baltimore, Maryland – Watch for foreign nations taxing your dividend income.
Take Canada, for instance. They have historically presented us with amazing dividend yield opportunities. The country’s vast resources offer plenty of investment potential. Large trusts have been set up to collect royalties as these resources are mined and drilled, and in turn they send them out to shareholders in dividends.
Unfortunately, Canada changed its tax law recently. Now instead of just collecting a straight dividend check, we are charged 15% before we ever see the money. The government of Canada wanted a piece of that lucrative pie. Of course, if the yield is large enough, we should still consider it. Other countries like Switzerland charge even more, upward of a 35% dividend tax.
So which nations have no dividend withholding tax? Brazil tops the list. Rio’s newfound spotlight could help bring more focus to this great dividend-paying nation. We are constantly looking there for more opportunities.
The U.K. is also a notable safe haven. While we aren’t necessarily bullish on the British pound, we do enjoy the tax break on many of our holdings in the Lifetime Income Report portfolio. Some other places with a 0% withholding tax we should note include Hong Kong, India and Mexico. We’ve been scouring these markets to find some income payers for you.
Jim Nelson
Jim Nelson began his investing career during the tech boom at age 14 – with purchases of Starbucks and AOL. Early inspiration came from an old Tweedy Brown whitepaper: “What Works in the Market.” He graduated with a degree in Political Science from Pittsburgh University, Nelson focuses on income investing, including dividends, covered calls, and fixed-income. Additionally, he covers MLPs, ADRs, utilities, consumer staples and tobacco. Nelson is the managing editor of Lifetime Income Report.
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Jim,
We live in Canada. Is there any way for us to benefit from these investments,(in our own country?) or is it limited to foreign investors?