CRA confirms that Canadian partnerships generally are transparent for Treaty withholding-rate purposes
CRA considers that a partnership is fiscally transparent for Treaty withholding purposes, so that if a partnership with two Canadian corporate partners is deemed under the s. 15(2) upstairs loan rules to pay a dividend to the direct or indirect parent of the Canadian corporations, the Treaty-reduced rates of withholding for dividends paid to Treaty-resident affiliates satisfying the applicable voting control or share ownership tests generally will be available.
The Netherlands Treaty has a Treaty-reduced rate of 5% inter alia for situations in which the non-resident company "controls directly or indirectly at least 10 per cent of the voting power in" the Canadian payor, so that the 5% rate generally would apply to a deemed dividend received by a Netherlands "grandparent."
Neal Armstrong. Summary of 31 May 2013 T.I. 2013-0486011E5 under Treaties – Art. 10.