The reason for the minimum distance is so the cannister will properly prime itself prior to turning it on. The distance between the top of the cannister and the water level should be more than the minimum distance for proper operation. Basically, priming is filling the cannister and getting water to the impeller unit, so it's not spinning in a pocket of air. Check what your instruction manual says for minimum distance, and see if it meets that. I'm sure it will. I've ordered an XP2 for my new 29G, which will sit in the stand under the tank. Distance is fine.
Example: If the minimum distance is 25 inches, then the distance from the top of the cannister and the waterline should be greater than 25 inches. It's height that counts, not distance away from the tank.