29 November 2000 External T.I. 2000-0036455 - QUALIFYING UNIVERSITY

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues:

Can fees paid to the XXXXXXXXXX Program qualify for a tuition tax credit pursuant to paragraph 118.5(1)(b)of the Act?

Position TAKEN
No

REASON FOR POSITION TAKEN

The program is not a part of the curriculum of a university rather it is a program that can earn credits towards a university degree and recognized by certain universities.

XXXXXXXXXX

November 29, 2000

Dear XXXXXXXXXX:

Re: XXXXXXXXXX - Qualifying University Outside Canada

This is in reply to your letter of July 6, 2000, wherein you ask us to determine whether tuition fees paid by a student to XXXXXXXXXX, will qualify for the tuition tax credit pursuant to paragraph 118.5(1)(b) of the Income Tax Act (the "Act").

You have enclosed documentation that describes the XXXXXXXXXX program as an independent, non-profit, educational and services program with the aim of developing leadership, responsibility and understanding among races, classes and cultures.

XXXXXXXXXX

Our Comments:

As explained in Information Circular 70-6R3, it is not this Directorate's practice to comment on proposed transactions involving specific taxpayers other than in the form of an advance income tax ruling submitted in the manner set out in that Circular. If the situation described is an actual completed transaction, your enquiry should be addressed to the local Tax Services Office. However, we are prepared to offer the following general comments which may be of assistance.

The Canada Customs and Revenue Agency's (the "CCRA") general position on the tuition tax credit is set out in Interpretation Bulletin IT-516R2. Generally, to qualify for a tuition tax credit to a university outside Canada, the student must be in full-time attendance at that particular university in a course leading to a degree.

In our review of XXXXXXXXXX, we note that the organization is a separate entity from XXXXXXXXXX and it is not empowered to confer degrees. XXXXXXXXXX curriculum is therefore recognized by certain universities who will give credits towards courses at those universities.

It is our understanding that XXXXXXXXXX is not a university and its courses do not lead to a degree. Accordingly, the student program fees paid to XXXXXXXXXX is not eligible for a tuition tax credit under paragraph 118.5(1)(b) of the Act. We also confirm that whether or not the student attends as a full-time student at XXXXXXXXXX following completion of the XXXXXXXXXX program would not change our views. The student would still not qualify for the tuition tax credit for the time he or she previously spent with the XXXXXXXXXX program because during that period of time the student was not in full-time attendance at a university. In this regard, we refer you to paragraph 5 of Interpretation Bulletin IT-516R2 which states "An educational institution located in a country outside Canada is presumed to qualify for purposes of paragraph 118.5(1)(b) if it is recognized by an accrediting body (that is nationally accepted in that country) as being an educational institution which confers degrees at least at the bachelor or equivalent level."(underlining for emphasis).

We regret that we could not provide you with a more favourable reply. We trust however that our comments are of assistance.

Your truly,

Jim Wilson
for Director
Business and Publications Division
Income Tax Rulings Directorate
Policy and Legislation Branch

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