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.
Principal Issues: Whether a particular University in Canada can issue a T2202A for purposes of the tuition and education credit given the circumstances surrounding the particular situation.
Position: Likely not for the tuition credit, but a qualified yes for purposes of the education credit
Reasons: Education Credit: Provided the student meets the requirements of 118.6(1) and is a student enrolled in a qualifying or specified educational program at a designated educational institution - as it is our general opinion that this requirement can be met by a student taking the required courses at a designated educational institution or by correspondence, the fact that a student is trained in the program abroad should not, in and of itself, disqualify the program for purposes of the education credit; Tuition Credit: The tuition fees are paid by the students to a separate organization, the tuition fees are not paid to the University as required by 118.5(1)(a), but still a question of fact.
2003-004988
XXXXXXXXXX Kimberly Duval
(613) 957-8982
April 20, 2004
Dear XXXXXXXXXX:
Re: Education and Tuition Tax Credit - Issuance of Form T2202A
This is in response to your letter of November 17, 2003 inquiring whether the XXXXXXXXXX (the "University") should be issuing Form T2202A to students enrolled in the XXXXXXXXXX (the "Program") currently being offered jointly by the University and the XXXXXXXXXX (the "Organization"). We apologize for the delay in responding to your request.
We understand that the Program is a Masters level program, sponsored by the Canadian International Development Agency, and is offered at the Organization's headquarters in XXXXXXXXXX. The Program is aimed at training high-potential professionals from around the world. After completion of the XXXXXXXXXX-month Program, students receive a Master of XXXXXXXXXX from the University.
The particular situation outlined in your letter appears to relate to a factual one, involving a specific taxpayer. As explained in Information Circular 70-6R5, Advanced Income Tax Rulings, it is not this Directorate's practice to comment on proposed transactions involving specific taxpayers other than in the form of an Advanced Income Tax Ruling. Should your situation involve a specific taxpayer and a completed transaction, you should submit all relevant facts and documentation to the appropriate Tax Services Office for their views. However, we are prepared to offer the following general comments that may be of assistance.
Education Tax Credit
The Canada Revenue Agency's ("CRA's") general interpretation of the provisions of the Income Tax Act (the "Act") that apply to the education tax credit is contained in Interpretation Bulletin IT-515R2, "Education Tax Credit." Generally, the education tax credit is available in respect of regular and correspondence education programs for students who are enrolled in qualifying or specified educational programs at designated educational institutions.
A "designated educational institution" may issue a T2202 or a T2202A to a full-time student enrolled in a "qualifying educational program" or to a part-time student enrolled in a "specified educational program". The expressions "qualifying educational program", "specified educational program" and "designated educational institution" are defined in subsection 118.6(1) of the Act.
If the student is enrolled in a qualifying educational program as a full-time student at a designated educational institution, the student may be entitled to a non-refundable education tax credit of $400 for each month during which the student was so enrolled, multiplied by the appropriate percentage for the year (16% for 2003). The expression "enrolled in a qualifying education program as a full-time student" is not defined in the Act. However, paragraphs 5 to 7 of IT-515R2 provide general comments regarding the CRA's interpretation of this expression. As indicated in paragraph 5 of IT-515R2, the requirement for enrolment as a full-time student at a designated educational institution must ultimately be met on the basis of the facts of each case and can be met by a student taking courses by correspondence or by a student enrolled in a distance education program.
Therefore, provided the other conditions of the provision are met, it is our view that this enrolment requirement can also be met by a student enrolled at a designated educational institution in Canada where the program instruction is offered abroad. We would have to review the facts in any particular situation in order to determine whether all of the conditions are satisfied.
Tuition Tax Credit
The CRA's general interpretation of the provisions of the Act that apply to the tuition tax credit is contained in Interpretation Bulletin IT-516R2, "Tuition Tax Credit." Subject to certain exceptions, the tuition tax credit is generally available to individuals enrolled at a university or college in accordance with subparagraph 118.5(1)(a)(i) of the Act. The tuition tax credit is computed with reference to the amount of tuition fees paid to the educational institution for each student.
Generally, where a student is paying tuition fees to a separate entity (other than to the educational institution where the student is enrolled), the conditions of paragraph 118.5(1)(a) of the Act have not been satisfied as the tuition fees have not been paid to the educational institution itself. However, whether or not the separate entity responsible for collecting the tuition fees from each student is, in fact, acting as agent for the university such that the university has still received tuition fees indirectly from the students, is a question a fact. This determination could only be made on a case-by-case basis and only after a review of the contractual arrangement and/or legal relationship between the entities involved.
For your information, the CRA administers and enforces the laws set out in the Act. The Department of Finance is responsible for tax policy and amending the Act. Should you wish to write to the Department of Finance to reconsider its existing position to take into account this particular situation, you may do so by writing to the following address: Department of Finance, Tax Policy Branch, 140 O'Connor Street, Ottawa, Ontario, K1A 0G5.
We trust that these comments will be of assistance.
Yours truly,
Roxane Brazeau-LeBlond, C.A.
for Director
Financial Industries Division
Income Tax Rulings Directorate
Policy and Planning Branch
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