As an example of an “as if resident” (“AIR”) clause, the Directorate referred to Art. 18(2) of the Canada-Italy Treaty which relevantly indicated that the tax which Canada could impose on a periodic pension arising in Canada does not exceed the lesser of (a) 15% of the excess of the annual pension amount over Cdn.$12,000, and (b) the amount of Canadian tax the recipient would have been required to pay on the annual pension amount had the recipient been resident in Canada.
CRA indicated that, by virtue of s. 227(6), a taxpayer request for an assessment of tax under this Treaty provision must be made no later than two years after the end of the calendar year in which the pension amounts were paid. Among other considerations, it noted that Art. 18(2) does not provide a specific timeline for making such a request and that the Canada-Italy Treaty contains no provision extending the timeframe for a refund request in this regard (and noted, somewhat in contrast, Art. XXVI of the US Treaty discussed in 9402551).