Understanding The RRSP Withdrawal Withholding Tax

  The purpose of this article is to explore the nature of the withholding tax on lump sum withdrawals from an RRSP.       Withholding Tax When funds are withdrawn from an RRSP, tax is withheld by the financial institution. The withholding tax rate levied depends on the amount withdrawn. Table 1 below presents the withholding tax rates. A withholding tax rate of 25% is levied for non-residents although there may be some relief through an...