HANS J. HAHN Appellant v. HER MAJESTY THE QUEEN AND, 2011 FCA 282

Federal Court of Appeal CANADA Cour d’appel fédérale Federal Court of Appeal CANADA Cour d’appel fédérale Date: 20111013 Docket: A-111-11 Citation: 2011 FCA 282 CORAM: NADON J.A. SHARLOW J.A. DAWSON J.A. BETWEEN: HANS J. HAHN Appellant and HER MAJESTY THE QUEEN AND CANADA REVENUE AGENCY (CRA) Respondent s Heard at Edmonton, Alberta , on October 13, 2011. Judgment delivered from the Bench at Edmonton, Alberta , on October 13, 2011. REASONS FOR JUDGMENT OF THE COURT BY: SHARLOW J.A. Date: 20111013 Docket: A-111-11 Citation: 2011 FCA 282 CORAM: NADON J.A. SHARLOW J.A. DAWSON J.A.

BETWEEN: HANS J. HAHN Appellant and HER MAJESTY THE QUEEN & CANADA REVENUE AGENCY (CRA) Respondents REASONS FOR JUDGMENT OF THE COURT (Delivered from the Bench at Edmonton , Alberta, on October 13, 2011) SHARLOW J.A. [ 1 ] Mr. Hahn is appealing the judgment of Justice Bowie of the Tax Court of Canada dated February 7, 2011. That judgment dismissed Mr. Hahn’s appeals from assessments under the Income Tax Act , R.S.C. 1985, c. 1 (5 th Supp.), for 2007 and 2008. The reasons for judgment were rendered orally at the conclusion of a hearing on February 2, 2011, and are unreported. [ 2 ] The provisions of the Income Tax Act that are relevant to this case are paragraph 56(1) (

a) and subparagraph 110(1) ( f )(i). Paragraph 56(1)(

a) requires a taxpayer to include in income any amount received as a pension benefit. Subparagraph 110(1)( f )(

i) permits an offsetting deduction for the amount of a pension benefit included in income that is exempt from income tax in Canada because of a provision in a tax convention between Canada and another country. [ 3 ] There is a tax convention between Canada and the Federal Republic of Germany. It came into force on March 28, 2002. By virtue of paragraph 3(

c) of

article 18 of the Canada-Germany Convention, any benefit paid under the social security legislation of Germany to a resident of Canada may be taxed in Canada, but any portion of the benefit that would be excluded from taxable income in Germany if the taxpayer were a resident of Germany is exempt from tax in Canada. [ 4 ] Mr. Hahn has been a resident of Canada since 1978. He has been in receipt of a pension from Germany since 2003. Pursuant to paragraph 56(1)( a ), Mr. Hahn is required to include the amount of his German pension in computing his income for Canadian income tax purposes.

However, the German pension is a benefit paid under the social security legislation of Germany , part of which would be excluded from his taxable income if he were resident in Germany . Therefore, by virtue of paragraph 3(

c) of

article 18 of the Canada- Germany Convention, Mr. Hahn is entitled to a deduction under subparagraph 110(1)( f )(

i) for the excluded portion. [ 5 ] For 2003 and 2004, the excluded portion of Mr. Hahn’s German pension was 73%. That is explained in a publication of the Canada Revenue Agency entitled “Change to the taxation of social security pensions received from Germany by a resident of Canada – 2003 and 2004”. Beginning in 2005, German law changed with the result that the excluded portion was reduced to 50% for 2005 and subsequent years.

That change is explained in another publication of the Canada Revenue Agency entitled “Change to the taxation of social security pensions received from Germany by a resident of Canada – BEGINNING 2005”. [ 6 ] In this appeal, Mr. Hahn claims to be entitled to the benefit of a 73% exemption for 2007 and 2008. His claim is based on a statement in the 2003-2004 publication referred to above that explains how to determine the excluded portion of a German pension, which is stated as a percentage. The statement upon which Mr.

Hahn relies reads, “This percentage will remain unchanged over the lifetime of the recipient”. [ 7 ] Mr. Hahn interprets this statement as a representation or promise by the Canada Revenue Agency that the excluded portion of his German pension is 73% in perpetuity. He argues that the Canada Revenue Agency, having made this statement, must allow him the 73% exemption for his German pension for every year of his life. [ 8 ] Justice Bowie rejected Mr. Hahn’s argument on the basis that his tax liability is fixed by law and cannot be altered by anything the Canada Revenue Agency may say or publish. Despite Mr.

Hahn’s concise and well articulated submissions, we have not

been persuaded that Justice Bowie’s decision is wrong in law. On the undisputed facts, the excluded portion of Mr. Hahn’s German pension for 2007 and 2008 was 50%. It follows that this appeal must be dismissed. The Crown will be awarded the costs of this appeal, fixed at $500 plus disbursements. "K. Sharlow" J.A. FEDERAL COURT OF APPEAL NAMES OF COUNSEL AND SOLICITORS OF RECORD DOCKET: A-111-11 STYLE OF CAUSE: HANS J. HAHN v. HER MAJESTY THE QUEEN and CANADA REVENUE AGENCY (CRA) PLACE OF HEARING: Edmonton , Alberta DATE OF HEARING: October 13, 2011 REASONS FOR JUDGMENT NADON J.A. OF THE COURT BY: SHARLOW J.A.

DAWSON J.A. DELIVERED FROM THE BENCH BY: SHARLOW J.A. APPEARANCES : Mr. Hans J. Hahn FOR THE APPELLANT (Self-Represented) Mr. Gregory Perlinski FOR THE RESPONDENT

SOLICITORS OF RECORD : N/A FOR THE APPELLANT (Self-Represented) Myles J. Kirvan Deputy Attorney General of Canada FOR THE RESPONDENT