Dividends | Interest

Dividend Policy

Our Corporate Constitution contains a Dividend Policy that entitles holders of Class A Subordinate Voting Shares and holders of Class B Shares to dividends which, in aggregate in respect of a financial year, shall be: (a) equal to at least 10% of our After Tax Profits (as defined in our Corporate Constitution) for that financial year; and (b) on average, equal to at least 20% of our After Tax Profits for that year and the two immediately preceding financial years. We have complied with this requirement since 1992 and intend to comply fully with this requirement.

Under our Corporate Constitution, if we fail to comply with the Dividend Policy for a period of two consecutive financial years, the holders of Class A Subordinate Voting Shares will have the exclusive right, voting separately as a class, to nominate and elect additional directors. Under the Dividend Policy in the Corporate Constitution, our After Tax Profits available for distribution to holders of Class A Subordinate Voting Shares and Class B Shares will be calculated after payment of dividends on Preference Shares. We currently have no Preference Shares outstanding.

Our Board reserves the right to modify the dividend at any time and for any reason, subject to the requirements of the Corporate Constitution, particularly in response to financial, economic, operating or other relevant circumstances.

Shareholders Filing Canadian Personal Income Tax Returns

Shareholders filing Canadian personal income tax returns should be aware that certain dividends deemed to have been received or received after 2005 that are designated as "eligible dividends" under the Income Tax Act (Canada) by the paying corporation will be eligible for more favourable treatment for Canadian income tax purposes than other dividends that are deemed to have been received or received by them. Specifically, such eligible dividends will be eligible for an enhanced dividend tax credit under federal income tax legislation. Magna has determined that dividends deemed to have been received or paid after 2005 on its shares qualify to be designated as eligible dividends and therefore to benefit from the enhanced dividend tax credit regime. Accordingly, applicable to all dividends deemed to have been paid or paid by Magna on its shares for 2006 and subsequent years, unless indicated otherwise in respect of specific dividends, and until removal of this notice, Magna hereby designates all such dividends to be "eligible dividends" as such term is defined under subsection 89(1) of the Income Tax Act (Canada).

Shareholders Filing U.S. Personal Income Tax Returns

If you are a shareholder filing a U.S. personal income tax return, you should be aware that on May 28, 2003, the Jobs and Growth Tax Relief Reconciliation Act of 2003 (the "Act") was signed into law. The Act, as amended by the Tax Increase Prevention and Reconciliation Act of 2005, reduces the rates of tax on dividends received from January 1, 2003 until December 31, 2010 from U.S. corporations and "Qualified Foreign Corporations" as defined in the Act. The determination as to whether we meet the definition of a "Qualified Foreign Corporation" must be reviewed annually. For 2007, we understand that Magna is a "Qualified Foreign Corporation". Therefore, the reduced tax rates under the Act should apply with respect to dividends paid to individual Magna shareholders subject to U.S. federal income tax. Dividends are not eligible for the reduced rates if a Magna shareholder has held the Magna share(s) for less than 61 days during the 121-day period beginning 60 days before the ex-dividend date for that dividend. Please note that the U.S. federal income tax treatment is dependent upon individual tax circumstances. Therefore, you should consult your own tax advisor regarding this or any other taxation issue.

Summary of Dividends paid on Class A Subordinate Voting Shares and Class B Shares of Magna International Inc.

The table below shows the actual dividend payment amount per share for each of the applicable periods referenced. Please note that the Class B Shares (MG.B) were de-listed after the close of trading on Friday, September 21, 2007.

The dividend payment amount per share (shown in the above table) is the actual amount paid per share and no adjustments have been made for stock splits, however, the splits are shown for clarification. Shareholders whose addresses as of the record date are in Canada are paid cash dividends in equivalent Canadian funds. The value is determined by converting the total amount of the dividend, net of applicable Canadian withholding taxes, at the Bank of Canada noon day exchange rate on the record date for Canadian and U.S. funds.

Ex-Dividend Dates

Ex-dividend dates are set by the exchanges. We do not publish ex-dividend dates for the Magna Class A Subordinate Voting Shares. Currently the ex-dividend date is the second business day prior to the record date. We recommend that you always confirm this with your broker or the applicable exchange.

Dividend Reinvestment Plan

We have a Dividend Reinvestment Plan whereby registered shareholders of the Class A Subordinate Voting Shares have the option to receive their dividends in the form of Class A Subordinate Voting Shares in lieu of cash.

Withholding Tax

Dividends on Class A Subordinate Voting Shares and any special stock dividends, when payable to holders that are non-residents of Canada, are generally subject to withholding tax at a rate of 25%, unless reduced, according to the provisions of the applicable tax treaty.