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:
Whether examination fees, administration fees and registration fees with respect to a professional association qualify as tuition tax credits.
Position TAKEN:
Examination and administration fees may qualify under certain circumstances, but registration fees never qualify.
Reasons FOR POSITION TAKEN:
Where the professional association qualifies as an educational institution, the examination fees and administration fees would only qualify as a tuition tax credit if they form an integral part of a course of studies (ref. Paragraph 26 of IT-516R2). The registration fees would not qualify as a tuition tax credit, as paragraph 27 of IT-516R2 clearly indicates that initiation or entrance fees to a professional organization are not considered to be eligible tuition fees.
XXXXXXXXXX 2000-003322
M. Milobar
Attention: XXXXXXXXXX
November 7, 2000
Dear Sirs:
Re: Tuition Tax Credit
This is in reply to your letter of June 19, 2000, wherein you request our views on the eligibility of examination fees, and related administration and registration fees for tuition tax credit under section 118.5 of the Income Tax Act ("Act"). We apologize for the delay in responding.
In summary, you presented two scenarios, as follows:
i. examination and administration fees in order to allow candidates to become registered with your association; and
ii. examination and registration fees pertaining to a post-graduate certificate program.
To qualify as an educational institution under subparagraph 118.5(1)(a)(i) of the Act, a professional organization must provide educational courses (i.e. a curriculum of study) to members, as well as having secondary school graduation as one minimum qualification for membership. For the purposes of this response, we have assumed that your association meets this criteria.
In order for examination and related fees to qualify for the tuition tax credit under paragraph 118.5(1)(a), the examination fees would have to form an integral part of a course of studies. In your correspondence you indicated that your Canadian candidates complete their studies at the college or university level, while your other candidates complete their studies outside of Canada. Based on this information, it would appear that the afore-mentioned fees are being paid for the purpose of being examined with respect to association registration, rather than forming an integral part of a course of studies. Thus, it follows that these fees would not qualify for the tuition tax credit.
With respect to your post-graduate certificate program; if the candidates complete their course(s) of study with your organization, and your organization qualifies as an educational institution (see earlier description), then it is our view that the examination fees would qualify for the tuition tax credit under paragraph 118.5(1)(a). However, if your candidates completed their post-graduate studies at another educational institution, the examination fees would not qualify for the tuition tax credit, for the same reason as noted in the preceding paragraph.
Finally, under no circumstances do registration fees to a professional association qualify for the tuition tax credit. This point is referenced in paragraph 27 of IT-516R2, a copy of which is enclosed.
We trust that these comments will be of assistance to your organization.
Yours truly,
Jim Wilson
for Director
Business and Publications Division
Income Tax Rulings Directorate
Policy and Legislation Branch
encl.
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