Other Foreign Tax Information

ARC Dividend Programs

On February 8, 2017, ARC's Board of Directors approved the elimination of the Dividend Reinvestment Plan ("DRIP") and Stock Dividend Program ("SDP"). Elimination of the DRIP and SDP will be effective for the March 2017 dividend, payable on April 17, 2017 to shareholders of record on March 31, 2017. The ex-dividend date is March 29, 2017. Shareholders that were enrolled in either program will automatically receive dividend payments in the form of cash.

Prior to elimination of the DRIP and SDP, shareholders were able to receive dividend payments in cash or reinvest their cash dividends into additional common shares of ARC pursuant to the DRIP.  Alternatively, shareholders could elect to receive common shares of ARC in lieu of cash dividends pursuant to the SDP.

Shareholders are advised to consult their tax advisors regarding questions relating to the tax treatment of ARC Resources dividends and the computation of the adjusted cost base of their investment.

Other Foreing Individual Shareholders

The following outlines the general tax considerations that are expected to apply for individual shareholders who are not residents of Canada and are neither citizens nor residents of the US.

This summary is of a general nature only and is not intended to be nor should it be construed to be tax advice to any particular shareholder.  Shareholders are encouraged to consult their own tax advisors regarding the tax consequences to them of receiving cash or stock dividends.

Cash Dividends

  • Cash dividends paid to non-residents of Canada are subject to Canadian withholding tax. The withholding tax rate is 25%; however, this rate may be reduced if the recipient is resident in a country with   which Canada has a tax treaty and provided the recipient is eligible for benefits under that tax treaty. 
  • In order to be entitled for a reduced withholding tax, a non-resident individual of Canada must provide Form NR301 – “Declaration of Eligibility for Benefits under a Tax Treaty for a Non-Resident Taxpayer” or the equivalent information to the transfer agent, Computershare Trust Company of Canada (“Computershare”) if they are registered shareholder or to their broker, investment dealer, financial institution, or other nominee as applicable if they are a beneficial shareholder.
  • Non-resident shareholders who are registered shareholders should receive an NR4 – Statement of Amounts Paid or Credited to Non-Residents of Canada (“NR4 slip”) on or before the end of March following the year in which dividends are paid from the transfer agent, Computershare Trust Company of Canada (“Computershare”).  The NR4 slip will outline the amount of dividends paid in the calendar year and the amount of Canadian tax withheld. These amounts will be in Canadian dollars.
  • Non-resident shareholders who are beneficial shareholders and hold their shares through a broker, investment dealer, financial institution, or other nominee that is resident in Canada should receive an NR4 slip on or before the end of March following the year in which dividends are paid from the respective intermediary.  The NR4 slip will outline the amount of dividends paid in the calendar year and the amount of Canadian tax withheld. These amounts will be in Canadian dollars.
  • Non-resident shareholders are encouraged to consult their own tax advisors regarding the appropriate treatment of dividends based on their own facts and circumstances.

Dividend Reinvestment Plan - Eliminated

  • All of the tax items noted under “Cash Dividends” also apply to foreign individual shareholders who participate in the DRIP.

Stock Dividend Program - Eliminated

  • The amount of the stock dividend for Canadian withholding tax purposes may differ from the amount of the stock dividend received for foreign tax purposes.
     
  • For Canadian tax purposes, the amount of a stock dividend is equal to the amount that ARC Resources adds to its stated capital in respect of the shares that are issued in satisfaction of the dividend.  As ARC Resources intends to add only a nominal amount to its stated capital, the amount of the dividend is expected to be nominal.  As a result, Canadian withholding tax is not applicable to the stock dividend and no NR4 slip will be issued.
     
  • Non-resident shareholders are encouraged to consult their own tax advisors regarding the appropriate treatment of dividends based on their own facts and circumstances.

 

ARC Resources Ltd.

1200, 308 - 4th Avenue S.W. Calgary, Alberta, Canada T2P 0H7

Tel: 403-503-8600 Toll Free: 1-888-272-4900