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Non-resident unitholders It is unclear whether qualifying U.S. residents (who otherwise would benefit under Article XXII of the Canada-US Convention from the 0% withholding tax rate applicable to distributions made out of income arising outside Canada, and a 15% rate applicable to income arising in Canada) would have that benefit denied under the anti-hybrid rule in Art. ...

However, the CRA's administrative practice in similar circumstances is to permit the rate of Canadian federal withholding tax applicable to such payments to be computed by looking through a partnership and taking into account the residency of its partners (including partners who are resident in Canada) and any reduced rates of Canadian federal withholding tax that any non-Canadian limited partners may be entitled to under an applicable income tax treaty or convention, provided that the residency status and entitlement to treaty benefits can be established. ...