/  77

(4)  The amount of after-tax cash available to pay dividends (including the dividend refund 

received as a result of the payment of the dividend) is not sufficient to obtain a full refund 

of the RDTOH account in any of the provinces, with the exception of British Columbia, 

Alberta, Ontario, Québec and New Brunswick.

 

 For example, if a corporation in Newfoundland and Labrador earns interest income and pays 

out all of its after-tax income (including its dividend refund) as a dividend, an amount equal 

to 1% of its income will remain in its RDTOH account, calculated as follows:

 

Amount available for distribution

 

 Corporate income 

$ 1,000

 

 Corporate tax 

     (487)

 

 After-tax amount 

 513

 

 Dividend refund 

     257

 

 Available for distribution 

$    770

 

RDTOH account 

 

 Refundable tax (26

2

/

3

% × $1,000) 

$ 267

 

 Dividend refund (33

1

/

3

% of $770 dividend) 

    (257)

 

 RDTOH balance 

$    10

Current as of September 30, 2013

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