CRA indicates that CPP and OAS payments are treated as pensions and social security payments under the Canada-Italy Treaty

Regarding the receipt by an individual resident in Italy of periodic CPP and OAS benefit payments, CRA found that:

• Art. 18(2) of the Canada-Italy Treaty limits the tax on Canadian-source pension income (including CPP) to the lesser of 15% of the total such income exceeding $12,000 and the amount of tax (referred to as the “as-if-resident” or “AIR” amount) that a resident of Canada would pay on that income.
• Art. 18(3) of the Treaty limits the tax on OAS income to the AIR amount (with the result that “[i]n most cases, that rate of tax is 25% in accordance with subsection 212(1).”)

Neal Armstrong. Summary of 6 April 2023 Internal T.I. 2022-0929731I7 under Treaties – Income Tax Conventions – Art. 18.