Tax is systematically withheld on income from ADRs at above the maximum rates permitted by the conventions. Can such withholdings be considered foreign income taxes in their entirety? CRA responded:
[T]he excess amount unduly paid could generally be recovered from the foreign tax authority. From a Canadian point of view, this excess amount would be considered as a "voluntary tax". As such … this amount would not qualify as an "income or profit tax". No foreign tax credit could be granted in respect of the excess amount. …
In addition, it would not be deductible under subsection 20(11).