General Unitholder Tax Summary
The following discussion is intended to provide a general explanation of the U.S., Canadian and European tax treatment of holding Brookfield Renewable Partners units.
This summary is of a general nature only and is not intended to be, nor should it be construed to be, legal or tax advice to any particular holder of Brookfield Renewable Partners units, and no representation with respect to the U.S., Canadian and European income tax consequences to any particular holder is made. Consequently, holders of Brookfield Renewable Partners units are advised to consult their own tax advisors with respect to their particular circumstances.
U.S. Unitholders
Is Brookfield Renewable Partners a Limited Partnership, Corporation or Trust?
Brookfield Renewable Partners is a Bermuda based limited partnership that is treated as a partnership for U.S. tax purposes. Brookfield Renewable Partners is not a corporation or a trust.
Is Brookfield Renewable Partners a Master Limited Partnership?
Brookfield Renewable Partners does not have the same tax characteristics of a U.S. Master Limited Partnership. There is no U.S. source income that flows out to investors that would cause U.S. federal, state and local income tax filing obligations. There is no UBTI (Unrelated Business Taxable Income).
What is the tax nature of the income earned by Brookfield Renewable Partners?
Brookfield Renewable Partners is a publicly traded partnership that does not earn active business income. Instead, Brookfield Renewable Partners receives various types of passive investment income, such as interest, dividends, capital gains, and returns of capital, from subsidiary corporations that carry on business in various jurisdictions.
The amount of interest, dividends, capital gains, and returns of capital that is earned and then allocated to unitholders will vary depending upon the particular business unit(s) from which funds are sourced. The source of funds for the distributions will also affect how much if any of the distributions are subject to withholding tax.
Brookfield Renewable Partners’ dividends include both fully taxable “ordinary dividends” and “qualified dividends”, which are eligible for preferential U.S. income tax rates (for individuals).
What is Brookfield Renewable Partners’ Partnership ID Number?
Brookfield Renewable Partners’ U.S. tax identification number (Employer Identification Number) is 98-0332836.
Is Brookfield Renewable Partners eligible for Tax-Deferred Plans?
In the U.S., units of Brookfield Renewable Partners qualify for IRA and 401(k) accounts.
What Tax Form will I receive as a U.S. Unitholder?
After the end of Brookfield Renewable Partners' taxation year (December 31), the U.S. taxable income of Brookfield Renewable Partners is determined and allocated to all unitholders that are in turn required to report such income on their respective tax returns. The allocation of U.S. taxable income is communicated using Schedule K-1 (not a Form 1099).
Who will send my Tax Form and when will I receive it (K-1)?
We are required to use reasonable efforts to send a Schedule K-1 to all unitholders who are U.S. residents or who may have U.S. tax reporting obligations. We expect to provide Schedule K-1 tax information via our online portal by mid-March, and to have those forms mailed to our U.S. unitholders by the end of March.
Why haven’t I received a K-1?
Generally, our unitholders own their units in “nominee form” through brokerages and we rely on information acquired from brokers and/or clearing houses to prepare the Schedule K-1. We are not always able to acquire information for all unitholders and accordingly some unitholders may not receive a Schedule K-1 for a particular year despite our best efforts to do so. If you do not receive a K-1 and require one, please contact Tax Package Support at (877) 209-9981 or www.taxpackagesupport.com/BEP and they will assist you. Alternatively, use the link to Tax Package Support at the bottom of this page.
I believe my K-1 is incorrect – who should I contact to fix this?
We rely on information provided by brokers and/or clearing houses to prepare Schedule K-1. In limited cases the information provided to us may be incomplete and/or inaccurate. If you believe you have received a Schedule K-1 in error, wish to correct the K-1 you have been issued, or have any other questions related to your K-1, please contact Tax Package Support at (877) 209-9981 or www.taxpackagesupport.com/BEP and they will assist you.
Please note that we are required to issue K-1 forms to all U.S. unitholders, even if their units are held in a tax deferred account such as an IRA. If your units are held in an IRA, you generally do not need to report the amounts on your K-1 and you should keep your K-1 for your records.
How can I obtain a tax credit for foreign taxes withheld?
The Forms 1099-INT and DIV prepared by your broker will include information on any foreign withholding taxes that were withheld by your broker so that you may claim them, if eligible, in your tax return as a credit and/or deduction. Because the withholding tax process is administered by the brokerage community rather than us, taxes withheld are only reported on Forms 1099-INT and 1099-DIV (and not on Schedule K-1).
Can I E-File my tax return?
Yes, the K-1 Form you receive should include all information that is required by law for you to e-file your U.S. personal tax return. Please note that one’s personal tax circumstances must be taken into account and that the IRS will, in certain circumstances, require individuals to submit their tax returns in a paper format.
I am a U.S. resident. Is the distribution I am paid from Brookfield Renewable Partners subject to Withholding Tax?
Brookfield Renewable Partners is a “flow through” entity for U.S. tax purposes, and its income comes from subsidiary holding corporations that the partnership owns. At present, these holding corporations are either in Canada, the U.S., or Bermuda, and we do not expect this to change for the foreseeable future. Payments from holding corporations in the U.S. and Bermuda to a U.S. resident are generally not subject to withholding tax. Payments from holding corporations in Canada to a U.S. resident such as dividends may be subject to withholding taxes.
The rate of withholding depends on a number of factors, including a holder’s country of tax residence, type of ownership account, and whether a holder has provided their broker (or Brookfield Renewable Partners’ transfer agent in the case of registered unitholders) with the appropriate tax form.
Withholding tax information for quarterly distributions will be posted approximately two weeks prior to each distribution payment date on the tax section of our website.
What is my Adjusted Cost Basis?
For U.S. residents, in general, a unitholder's tax cost of his/her Brookfield Renewable Partners units should equal the sum of (i) the amount paid to acquire the units and (ii) the net taxable income allocated to the unitholder, minus the cash distributions received.
Brookfield Renewable Partners does not have sufficient information to track the tax cost of units for each individual holder. Unitholders are solely responsible to accurately compute and track the tax cost of their Brookfield Renewable Partners units.
Is Brookfield Renewable Partners considered Passive Foreign Investment Company (PFIC) or Controlled Foreign Corporation (CFC)?
We currently believe that a U.S. unitholder should not be regarded as owning an interest in a PFIC or CFC for U.S. tax purposes solely by reason of owning Brookfield Renewable Partners units and therefore ownership of Brookfield Renewable Partners units should not generate any PFIC or CFC related filings or tax liabilities.
Does Brookfield Renewable Partners generate UBTI?
No, we do not generate UBTI.
I owned units of Brookfield Renewable Partners L.P. prior to the formation of Brookfield Renewable Corporation. As a result of the special distribution from Brookfield Renewable Partners L.P. in 2020, I received class A shares of Brookfield Renewable Corporation. Is this special distribution taxable for U.S. federal income tax purposes?
Brookfield Renewable Partners L.P. is expected to qualify as an “investment partnership” so that the special distribution of class A shares of Brookfield Renewable Corporation to a U.S. unitholder who is an “eligible partner” qualifies as a non-taxable distribution of property.
The initial tax basis in the class A shares received in the special distribution by a U.S. unitholder that qualifies as an eligible partner will equal the lesser of (i) Brookfield Renewable Partners L.P.’s adjusted tax basis in such class A shares immediately before the distribution of $48.304 per share, subject to certain adjustments, and (ii) such U.S. unitholder’s adjusted tax basis in its interest in Brookfield Renewable Partners L.P. units reduced by the amount of any cash received in lieu of fractional class A shares pursuant to the special distribution.
Please note that the above numbers are calculated based on the number of Class A Shares of Brookfield Renewable Corporation at the time of the special distribution and have not been updated for any subsequent stock splits.
European Unitholders
Is Brookfield Renewable Partners a Limited Partnership, Corporation or Trust?
Brookfield Renewable Partners is a Bermuda based limited partnership. Brookfield Renewable Partners is not a corporation or a trust.
Is Brookfield Renewable Partners a Master Limited Partnership?
Brookfield Renewable Partners does not have the same tax consequences of a U.S. Master Limited Partnership (MLP). There is no U.S. source business income that flows out to investors. Brookfield Renewable Partners has not and is not expected to generate ECI (Effectively Connected Income), CAI (Commercial Activity Income) or UBTI (Unrelated Business Taxable Income). For a non-U.S. investor, there are no U.S. income tax filings, Foreign Investment Real Property Tax Act (FIRPTA) filings, or U.S. income tax liabilities that result solely from the ownership of a Brookfield Renewable Partners unit.
Does ownership of Brookfield Renewable Partners units result in U.S. tax consequences for European unitholders?
Brookfield Renewable Partners’ U.S. operations are carried out through U.S. resident corporate subsidiaries. Therefore, Brookfield Renewable Partners is not itself engaged in a U.S. trade or business and as such European unitholders should not have to file any U.S. federal or state income tax returns and are not subject to U.S. income tax solely as a result of owning Brookfield Renewable Partners units.
Brookfield Renewable Partners units do not generate any of the following U.S. tax consequences which could otherwise be adverse to prospective non-U.S. unitholders on the ownership and disposition of units:
- U.S. State or Federal Net Income Tax Filings
- MLP related filings
- Effectively Connected Income (ECI), Commercial Activity Income (CAI), Unrelated Business Taxable Income (UBTI)
- Foreign Investment Real Property Tax Act (FIRPTA) related filings
Am I subject to Foreign Investment Real Property Tax Act (FIRPTA)?
Non-U.S. investors that own 5% or less of Brookfield Renewable Partners publicly traded units should not be subject to FIRPTA taxation on a disposition of their units. Investors that own more than 5% of Brookfield Renewable Partners publicly traded units may be subject to FIRPTA taxation on a disposition of their units.
I am a European resident. Is the distribution I am paid from Brookfield Renewable Partners subject to Withholding Tax?
While Brookfield Renewable Partners is a Bermuda partnership, its income comes from holding companies the partnership owns. At present, these holdings companies are either in Canada, the U.S. or Bermuda, and we do not expect this to change for the foreseeable future. The income Brookfield Renewable Partners earns from underlying subsidiaries includes dividends and interest paid by subsidiaries in jurisdictions that levy withholding tax. Since Brookfield Renewable Partners is a "flow-through" for U.S. and Canadian income tax purposes, a portion of the income may be subject to withholding taxes levied by jurisdictions such as the U.S. and Canada.
The rate of withholding depends on a number of factors, including a holder’s country of tax residence, type of ownership account, and whether a holder has provided their broker (or Brookfield Renewable Partners’ transfer agent in the case of registered unitholders) with the appropriate tax form.
Withholding tax information for quarterly distributions will be posted approximately two weeks prior to each distribution payment date on the tax section of our website.
Who applies the withholding tax? Why don’t I receive the full distribution amount?
Generally, our unitholders own their units in “nominee form” through brokers (also known as “beneficial” holders). Consequently, the brokers are responsible for withholding taxes as only they possess the requisite information about the unitholder that is necessary to calculate the appropriate amount to withhold as is typical for publicly traded securities. Our partnership’s income may include Canadian or U.S. sourced interest and dividends earned from subsidiaries. When these amounts are paid to a European unitholder, they are subject to varying rates of Canadian withholding taxes ranging from nil to 25% and U.S. withholding taxes ranging from nil to 30%.
1 The U.S. dollar distributions must be converted to Canadian dollars before reducing the tax cost of Brookfield Renewable Partners units for Canadian tax purposes. Brookfield Renewable Partners does not prescribe a particular foreign exchange rate that unitholders should use to make such conversions. Unitholders and/or their brokers would generally be expected to use the conversion rate on the date of receipt of the distribution.
2 We report the gross distribution and the portion of the distribution that is eligible to be treated as a “qualified dividend” for U.S. tax purposes on our Schedule K-1 that is issued to U.S. unitholders in March of the following year. These amounts will vary from year-to-year and are calculated in accordance with U.S. tax rules.
IRC Section 1446(F)
Am I subject to U.S. tax withholding under IRC Section 1446(f) on the disposition of Brookfield Renewable Partner units?
We do not expect non-U.S. investors to be subject to U.S. tax withholding under IRC Section 1446(f) on the disposition of their units. Brookfield Renewable Partners has not been and does not expect to be engaged in a U.S. trade or business within the meaning of Treas. Reg. Sec. 1.1446(f)-4(b)(3)(ii)(A)(2). to Brookfield Renewable Partners has issued qualified notices in accordance with Treas. Reg. Sec. 1.1446(f)-4(b)(3)(iii) as applicable. Previously issued notices can be found in the “Qualified Notices” section here. Please also see a letter from counsel on this issue below.
2024 Tax Information Update
- 2024 Schedule K-1 forms are available through our Tax Package Information website: https://www.taxpackagesupport.com/BEP.
- 2024 T5013 forms are mailed by individual investor brokers. Please contact your broker directly with questions on this form.