Regarding the withholding tax treatment of a payment made pursuant to an allocation in proportion to patronage (a "patronage dividend") to a partnership, CRA stated:
Subsection 135(3) provides that where a taxpayer pays a patronage dividend to a person resident in Canada who is not exempt from tax under section 149, the taxpayer must withhold tax in the manner provided in that subsection. Where a patronage dividend is paid to a partnership, it is our view that withholding tax should be made taking into account the status of each member of the partnership.