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RRSP

Canada: a retirement plan giving a deduction for contributions and tax-deferred growth, with withdrawals taxed as income; a notable treaty benefit applies to US dividends.

Contributions reduce taxable income up to a limit based on earned income and carry forward if unused. Growth inside the plan is not taxed until withdrawal, at which point the full amount is income.

For investors holding US equities, the Canada–US treaty generally exempts an RRSP from US withholding tax on US dividends, which is not true of a TFSA. That makes account location a real decision rather than a detail.

Losses inside the plan are not deductible and contribution room is not restored by withdrawals in the way a TFSA restores it, so the RRSP is poorly suited to speculative trading for reasons beyond tax.

General information about Canada, not tax advice. Rules change and depend on your circumstances; consult a qualified Canadian adviser.

Related: tfsa-day-trading-risk, canada-capital-gains-inclusion-rate, cra-canada, sipp-uk, withholding-tax-w8ben

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