C Relph v. Minister of National Revenue, [1976] CTC 2086, 76 DTC 1081

The Chairman:—This is the appeal of C Relph from an income tax assessment in respect of the 1972 taxation year.

The issue as stated by the appellant at the hearing of this appeal presents a problem which is not within the jurisdiction of this Board.

Prior to 1972, the appellant was a Canadian resident. Late in 1971 he applied for and obtained employment in Germany with the Canadian Forces Europe under the “Locally-Engaged Employees Regulations” as established by Treasury Board. (Exhibits R-1, R-2 and R-3.)

In assessing the appellant for the 1972 taxation year, the Minister of National Revenue deemed him, pursuant to subsection 250(1) of the Income Tax Act, to have been a resident of Canada and an officer or servant of Canada during 1972.

The appellant in presenting his case at the hearing did not contend that he was not a Canadian resident nor did he suggest that he should not be taxed in Canada. He admitted not paying any income tax to the Government of Germany, and agreed that he should pay some taxes to Canada but contended that the Department of National Revenue in assessing him did not take into account the devaluation of the Canadian dollar as a result of the foreign exchange rate and applied a 19% tax rate to his devaluated salary in 1972. In subsequent years the appellant was taxed at the normal tax rate for a salary which had lost its purchasing power in proportion to the foreign exchange rate prevalent at the time. The appellant felt that in the circumstances he was unable to continue working in Germany and returned to Canada in 1975 where he is now unemployed.

Although the Board may consider that the appellant was a victim of the foreign exchange rate it can only decide the issue on the basis of whether or not the appellant was taxed according to the appropriate provisions of the Income Tax Act.

From the evidence, there is, in my view, no doubt that the appellant was a Canadian resident in 1972. It appears that the appellant was paid by the Government of Canada according to the terms set out in the “Locally-Engaged Employees Regulations” and there is no evidence before me that the appellant was wrongly assessed or that he was taxed otherwise than on the basis of the appropriate section of the Income Tax Act.

In the circumstances, the Board has no alternative but to dismiss the appeal.

Appeal dismissed.