Ive owned a small portion in Medtronic over the past couple of years. Now that the COV deal is completed, my broker updated my holding this morning from Medtronic Inc to Medtronic PLC - which raises the question - does this mean that I will be paying dividend withholding taxes?
I reside in Canada and the holding in question is held in an RRSP account - so I didnt pay any withholding taxes for my MDT (since it was a US-based company). Now that its becoming a Irish ADR, Im guessing I'll have to pay dividend withholding tax?
From the agreement, it appears that it could be either 5% or 15%
http://www.fin.gc.ca/treaties-convention...t_-eng.asp
Someone familiar with this matter care to clarify?
Well logic says that yes there will be some withholding tax and from what I can gather from that link it looks like it will be 15%.
However I would recommend that you contact your broker ASAP, they should be able to provide you with a definite answer.
Probably a stupid answer by me, but I thought I'd let you know:
I am a Covidien employee (now a Medtronic employee as of Jan 26th). I have always invested in the COV ESPP program and had accumulated around 1880 shares over the years, out of which I sold the Longs (Qty: 1449 for $104) and retained the Shorts (Qty: 404) which got converted to 386 MDT shares @ $75.29 (along with some cash that they gave us per COV share).
What I'm trying to say is that I used to receive dividends from COV and would reinvest them in the COV shares.
Not sure if I didn't see any tax implications on the dividends since it was automatically being reinvested or because I reside in the US.
Not entirely sure I am following your question. If they COV shares were in a taxable account, you were paying taxes on the dividends received whether or not you reinvested them. If they were in a tax deferred account, there weren't any tax implications on the dividends.
Thanks for the input, saimash.
ChadR,
I use a tax-deferred account and didnt pay any taxes since I was investing in a US-based company. But now that MDT has become an Irish company, Im wondering if I will be paying Irish dividend withholding taxes going forward.
The fact that I reside in Canada also complicates the matter a little bit. I have emailed my broker and hopefully will get an answer from them soon. If not, I'll have to wait until next quarter to see how it affects my dividends.