Tourmaline’s dividend policy undergoes a periodic review by the Board of Directors and is subject to change at any time depending upon the earnings of the Company, its financial requirements and other factors existing at the time. Prior to 2018, dividends had not been paid on the common shares of the Company. On March 6, 2018, the Board of Directors approved a dividend policy for the payment of Tourmaline’s first regular quarterly dividend. Tourmaline’s history on dividend payments is as follows:
Fourth Quarter
Special Dividend
Third Quarter
First Quarter
This summary is of a general nature only and is not intended to be nor should it be construed to be legal or tax advice to any particular shareholder. Shareholders are encouraged to consult their own tax advisors regarding the tax consequences and reporting obligations to them of receiving cash dividends.
Canadian Resident Individual Shareholders
Unless otherwise indicated dividends paid by Tourmaline, will be designated as “eligible dividends” for Canadian income tax purposes. An eligible dividend paid to a Canadian resident is entitled to the enhanced dividend credit.
Non-Resident Shareholders
The following information is provided for general information purposes only. Investors are encouraged to seek advice from a qualified tax advisor in their country of residence to obtain guidance with respect to the appropriate tax treatment of their dividends.
Dividends paid by Tourmaline will be subject to Canadian withholding tax at the rate of 25% on the gross distribution unless the rate is reduced under the provisions of a tax treaty between Canada and the non-resident shareholder’s jurisdiction of residence. The non-resident shareholder should be eligible to claim a credit or deduction against local taxes with respect to these Canadian non-resident withholding taxes.
United States Shareholder
Where the non-resident shareholder is a United States resident they may be entitled to benefits under the Canada-U.S. tax treaty. The rate of Canadian withholding tax on dividends is generally reduced to 15% under the Canada-U.S. tax treaty. To be entitled for the reduced withholding tax, the US shareholder must provide form NR301 – “Declaration of Eligibility for Benefits under a Tax Treaty for Non-resident Taxpayer” or equivalent information to the transfer agent AST Trust Company Canada or to their registered broker, investment dealer, financial institution or other nominee as applicable if they are the beneficial shareholder.
Tourmaline is considered to be “a qualified foreign corporation” and the dividends paid on its common shares are considered to be “qualified dividends”, as determined for US federal tax purposes. The dividends paid should be eligible for reduced rates of taxation provided that certain holding period and other requirements are met.