What is the tax nature of the distributions paid by Brookfield Renewable Corporation?

Brookfield Renewable Corporation expects to pay eligible dividends to its shareholders.

I am a Canadian resident. Is the dividend I am paid from Brookfield Renewable Corporation subject to withholding tax?

Dividends paid from Brookfield Renewable Corporation to Canadian resident shareholders are not subject to withholding tax.

Is the dividend I am paid from Brookfield Renewable Corporation considered an “eligible dividends”?

For purposes of the enhanced dividend tax credit rules contained in the Income Tax Act (Canada) and any corresponding provincial and territorial tax legislation, all dividends (and deemed dividends) paid by Brookfield Renewable Corporation to Canadian residents and unless stated otherwise, are designated as “eligible dividends”.

Is Brookfield Renewable Corporation eligible for Tax-Deferred Plans?

Brookfield Renewable Corporation is a qualified investment for registered retirement savings plans, deferred profit-sharing plans, registered retirement income funds, registered education savings plans, registered disability savings plans and tax-free savings accounts.

What Tax Form will I receive as a Canadian shareholder?

Form T5 – Statement of Investment Income will be issued to Canadian resident shareholders. Form T5 contains information about investment income from Brookfield Renewable Corporation.

Who will send my Tax Form (T5)?

Unregistered Canadian resident shareholders (i.e., those holding their shares in street name with their brokerage) who own their shares in a non tax-deferred account should receive a T5 from their Canadian broker. If you are a beneficial Canadian resident shareholder and did not receive your Form T5, please contact the brokerage firm with whom your shares are held.

Registered Canadian resident shareholders will receive a T5 directly from our transfer agent Computershare Trust Company of Canada. If you are a registered Canadian resident shareholder and did not receive your Form T5, please contact Computershare toll-free at 1-800-564-6253 or direct dial at 1-514-982-7555.

When will I (non-registered shareholder) receive my Tax Form (T5)?

Typically, brokers will prepare and distribute the Form T5 in late February. If you have any questions about Form T5 you should contact your broker.

Why does the $CAD cash I received not equal the amount reflected on my T5?

The dividends you receive adjusted for foreign exchange rates should equal the investment income reported on Form T5. There may be minor differences due to exchange rates.

Is Brookfield Renewable Corporation a Specified Foreign Property?

Brookfield Renewable Corporation is not a Specified Foreign Property and therefore does not need to be reported on Form T1135 Foreign Income Verification Statement.

What is the Adjusted Cost Base (“ACB”) of my shares?

In general, a shareholder's tax cost or ACB of his/her Brookfield Renewable Corporation shares should equal the amount paid to acquire the shares.

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 Canadian federal income tax purposes?

The special distribution should not be taxable to a Canadian resident shareholder for Canadian income tax purposes provided the adjusted cost base of the Brookfield Renewable Partners L.P. units held by the Canadian resident holder is positive after the special distribution.

In general, this special distribution will reduce the adjusted cost base of your interest in the partnership units of Brookfield Renewable Partners L.P. by an amount equal to the fair market value at the time of the special distribution of the class A shares of Brookfield Renewable Corporation (“BEPC Shares”) you have received. The same fair market value at the time of the special distribution of the BEPC Shares is your adjusted cost basis in your BEPC Shares. The closing price of a share of Brookfield Renewable Corporation on the New York Stock Exchange on July 30, 2020 (the date of the special distribution) was US$40.72. The Bank of Canada daily exchange rate for July 30^th, 2020 for USD/CAD was 1.3432.

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.

I understand I can exchange a class A share of Brookfield Renewable Corporation for a unit of Brookfield Renewable Partners L.P. What are the tax consequences to a Canadian shareholder as a result of this exchange?

The exchange would be considered a disposition of the class A share of Brookfield Renewable Corporation. A Canadian resident shareholder who disposes of a share of Brookfield Renewable Corporation, will realize a capital gain (or sustain a capital loss) equal to the amount by which the proceeds of disposition exceed (or are exceeded by) the aggregate of the shareholder’s adjusted cost base of such share and any reasonable costs of disposition.

What is the tax nature of the distributions paid by Brookfield Renewable Corporation?

Subject to the holding period, dividends paid by Brookfield Renewable Corporation will be eligible for “qualified dividend” treatment. Whether dividends paid by Brookfield Renewable Corporation will in fact be “qualified dividends” to any shareholder will depend on that shareholder’s specific circumstances, including the shareholder’s holding period for the Brookfield Renewable Corporation shares on which such dividends are received.

Is Brookfield Renewable Corporation considered a Passive Foreign Investment Company (“PFIC”)?

Based on the current and anticipated composition of the income, assets and operations of Brookfield Renewable Corporation and its subsidiaries, Brookfield Renewable Corporation does not believe that it will be a PFIC for U.S. federal income tax purposes for the current taxable year or for future taxable years. However, the application of the PFIC rules is subject to uncertainty in several respects, and a separate determination must be made after the close of each taxable year as to whether Brookfield Renewable Corporation is a PFIC for that year. Changes in the composition of Brookfield Renewable Corporation income or assets may cause Brookfield Renewable Corporation to become a PFIC. Accordingly, there can be no assurance that Brookfield Renewable Corporation will not be a PFIC for any taxable year. 

I am a U.S. resident. Is the dividend I am paid from Brookfield Renewable Corporation subject to withholding tax?

Dividends paid from Brookfield Renewable Corporation to a U.S. resident shareholder may be subject to Canadian withholding tax. The rate of withholding varies, amongst other factors, depending on the type of ownership account, and whether holders have provided their broker (or Brookfield Renewable Corporation’s transfer agent in the case of registered shareholders) with the appropriate Canada Revenue Agency (“CRA”) form (Form NR301, NR302, and NR303). The withholding tax rate can range from nil to 25%.

What Tax Form will I receive as a U.S. shareholder?

Dividends paid by Brookfield Renewable Corporation are reported annually on Form 1099 which is generally distributed to shareholders in February.

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. In relation to the adjustments mentioned in (i), such adjustments will be made available on each investor’s K-1 information slip and we expect that such adjustments will be immaterial to nearly all BEP unitholders, except for those unitholders with large holdings (e.g. greater than 50,000 units).

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.

I owned shares of Terraform Power prior to the formation of Brookfield Renewable Corporation. As a result of the merger with Brookfield Renewable Corporation in 2020, I received class A shares of Brookfield Renewable Corporation. Is the merger/transaction taxable for U.S. federal income tax purposes? 

The exchange of Terraform Power shares into Class A shares of Brookfield Renewable Corporation should not be a taxable transaction for U.S. federal income tax purposes. The initial aggregate tax basis in the Class A shares received by former shareholders of Terraform Power will be equal to the historical aggregate tax basis of their Terraform Power shares immediately prior to the exchange.

For a detailed discussion of the material tax considerations for former TerraForm Power shareholders relating to the merger and resulting receipt of class A shares of Brookfield Renewable, please refer to the Terraform Power Proxy Statement.
 

I exchanged a Class A share of Brookfield Renewable Corporation for a unit of Brookfield Renewable Partners L.P in 2020. What are the tax consequences to a U.S. shareholder as a result of this exchange?

We expect the exchange to be treated as a taxable sale of your Class A Shares for U.S. federal income tax purposes. A shareholder treating the exchange as a taxable sale would recognize gain or loss equal to the difference between the value of the Brookfield Renewable Partners LP units received (at the time of the exchange) and the adjusted tax basis of the Brookfield Renewable Corporation Class A shares exchanged. However, the U.S. tax characterization of the exchange depends on your specific facts and circumstances.

I am a European resident. Is the dividend I am paid from Brookfield Renewable Corporation subject to withholding tax?

Dividends paid from Brookfield Renewable Corporation to European resident shareholders may be subject to Canadian withholding tax. The rate of withholding varies, amongst other factors, depending on the type of ownership account, the tax residency of the shareholder, and whether shareholders have provided their broker (or Brookfield Renewable Corporation’s transfer agent in the case of registered shareholders) with the appropriate Canada Revenue Agency (“CRA”) form (Form NR301, NR302, and NR303).