An additional refundable tax serves a very important purpose. You may actually wonder why you have to pay the tax when you are eligible to get a refund for the tax paid. The idea behind that is that the refundable deposit tax is a pre-payment of tax on the investment dividends. It is important because it removes the deferral advantage that one might have if he or she earned investment income. This could be in the form of dividends through a private corporation.