How are BMO S&P 500 Index ETF dividends taxed for Canadians?

BMO S&P 500 Index ETF distributions are characterised as Mix of foreign income and capital gains. Foreign withholding is creditable via the foreign tax credit. Capital gains are taxed at 50% inclusion.

Stocks · TSX · Updated 2026-09-03 · Educational use only

Is BMO S&P 500 Index ETF (ZSP) better in a TFSA, RRSP, or taxable account?

Q: Is BMO S&P 500 Index ETF (ZSP) better in a TFSA or RRSP?

The simplified educational read is RRSP. RRSP is preferred because foreign income inside the fund is fully sheltered on withdrawal, even though the Canadian-listed wrapper still incurs fund-level foreign withholding that no registered account can recover.

BMO S&P 500 Index ETF (ZSP) trades on TSX and is Canadian-domiciled. Here is the educational, tax-aware account-location read for Canadian investors deciding between a TFSA, RRSP, and taxable account.

Important: General education only — not financial, tax, legal, accounting, or investment advice. It does not know your province, income, contribution room, or suitability. Verify with the issuer, CRA, or a qualified professional.

Educational account fit: RRSP

RRSP is preferred because foreign income inside the fund is fully sheltered on withdrawal, even though the Canadian-listed wrapper still incurs fund-level foreign withholding that no registered account can recover.

Dividend character: Mix of foreign income and capital gains. Listing eligibility: Yes — Listed on TSX, a designated exchange.

This is a fund/ETF. Fund distributions are not automatically Canadian eligible dividends, and withholding can apply at the fund level. See Canadian-listed vs US-listed ETFs.

ZSP across account types

TFSA

Fund-level foreign withholding applies on the underlying US or international dividends. The drag is smaller than holding the US-listed equivalent directly.

RRSP

The RRSP does not eliminate fund-level withholding on Canadian-listed wrappers of US equities. However, foreign income is fully sheltered on withdrawal.

Taxable (non-registered)

Foreign withholding is creditable via the foreign tax credit. Capital gains are taxed at 50% inclusion.

See the live read for ZSP

Open BMO S&P 500 Index ETF in the screener for current data and the full TFSA, RRSP, and taxable-account breakdown.

Open ZSP in the screener