This summary is of a general nature only and is not intended to be, nor should it be construed to be legal, business or tax advice to any particular holder. Investors should consult their own tax advisors regarding the income tax considerations applicable to them in their particular circumstances.
On May 31, 2010, Enterra Energy Trust converted to a corporation and changed its name to Equal Energy Ltd. ("Equal"). Equal is no longer a trust and therefore any distributions paid after its conversion to a corporation will generally be treated as dividends. The tax information is archived on this page for those unitholders that had received distributions in the past.
US Tax Information
A dividend paid or credited (or deemed under the Tax Act to be paid or credited) by Equal on common shares to a non-resident shareholder will generally be subject to Canadian withholding tax under the Tax Act at a rate of 25%, subject to any reduction in the rate of such withholding under an applicable income tax treaty or convention. In the case of a non-resident shareholder who is a resident of the United States for purposes of the Canada U.S. Tax Convention and who qualifies for the benefits of such tax convention, the rate of such withholding will generally be reduced to 15%.
CDN Tax Information
All dividends paid on common shares will be designated as "eligible dividends" for Canadian income tax purposes unless otherwise notified by Equal. Should you have any questions regarding the taxation of eligible dividends, please contact your Canadian tax advisor or your local office of the Canada Revenue Agency.
Dividends received or deemed to be received on the common shares by a Canadian resident shareholder who is an individual (other than certain trusts) will be included in income and will be subject to the gross-up and dividend tax credit rules normally applicable under the Income Tax Act (Canada) (the "Tax Act") to taxable dividends received from taxable Canadian corporations. An "eligible dividend" paid to a Canadian resident shareholder is entitled to the enhanced dividend tax credit. Dividends received by an individual may be subject to alternative minimum tax.
Dividends received or deemed to be received on common shares by a Canadian resident shareholder that is a corporation will be included in its income and will generally be deductible in computing its taxable income, but certain Canadian resident corporations may be subject to a refundable tax of 33⅓% on dividends received or deemed to be received on common shares to the extent such dividends are deductible.
Shareholders who hold their common shares in a registered retirement savings plan, registered retirement income fund, deferred profit sharing plan, registered education savings plan, registered disability savings plan or tax free savings account, or any other such registered plans are subject to different income tax considerations and should consult their own tax advisor regarding their particular circumstances.