May. 27 at 3:19 PM
"One, Big, Beautiful Bill" passed w/ a narrow vote of 215-214 in Congress - inside the 1,100-page document incls section 899, a tax proposal created as a retaliatory measure against what the US calls “discriminatory or unfair taxes” of foreign countries, like Canada’s digital services tax
If it becomes law, it will override Canada-US tax treaty that has been in place since 1942 if Canadia is designated as a "discriminatory foreign country"
Canada corps that receive dividends or qualifying interest from US are currently subject to a 5% withholding rate under the tax treaty b/n the US & Canada - But under section 899, their tax rate will increase by +5ppt each year until it reaches +20ppt above the statutory rate, or 50%.
Similarly, Canada individuals who own US securities directly are subject to a 15% withholding tax rate under the current treaty - Under section 899, withholding rate could ultimately rise to 50% & the 0% withholding rate on US dividends in RRSPs may be overridden
$EWC $FXC