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 "placement fee" charged by a university to cover the cost of staffing and other resources required to identify placement opportunities for a student's required fieldwork can be considered ancillary fees and charges.
Position: Question of fact.
Reasons: Ancillary fees and charges do not include any fee or charge to the extent that it is levied for services not ordinarily provided at educational institutions in Canada that offer courses at a post-secondary school level.
XXXXXXXXXX 2004-005476
J. Gibbons, CGA
June 2, 2004
Dear XXXXXXXXXX:
Re: Tuition Fees
This is in reply to your letter dated December 23, 2003, wherein you requested our views whether the "XXXXXXXXXX" (the "Placement Fee") as charged by the XXXXXXXXXX (the "University") can be included on form T2202A, "Tuition and Education Amounts Certificate."
We understand that the Placement Fee is a compulsory fee charged to University students enrolled in particular programs that require the students to engage in fieldwork that is related to their chosen disciplines. The Placement Fee is a one-time fee of $XXXXXXXXXX that covers the cost of staffing and other resources required to identify placement opportunities and manage the ongoing relationships and administration associated with running the placement program.
Written confirmation of the tax implications inherent in particular transactions are given by this Directorate only where the transactions are proposed and the subject matter of a request for an advanced income tax ruling submitted in the manner set out in Information Circular 70-6R5. However, we have provided some general comments below, which we hope will be of assistance to you.
Form T2202A is used to report "fees for the individual's tuition," as this term is used in subsection 118.5(1) of the Income Tax Act (the "Act") for purposes of claiming the tuition tax credit. In this regard, pursuant to subsection 118.5(3) of the Act, fees for the individual's tuition includes ancillary fees and charges paid to a university, college or other educational institution providing courses at a post-secondary school level in respect of a student's enrolment therein in a program at a post-secondary school level, other than those fees described in paragraphs 118.5(3)(c) and (d) of the Act.
Pursuant to subparagraph 118.5(3)(c)(iii) of the Act, ancillary fees and charges do not include any fee or charge to the extent that it is levied for services not ordinarily provided at educational institutions in Canada that offer courses at a post-secondary school level. Whether the Placement Fee will not be considered ancillary fees and charges by reason of this provision is a question of fact that can only be ascertained by determining whether or not the particular services for which the Placement Fee is charged are ordinarily provided by post-secondary educational institutions in Canada.
In addition, under paragraph 118.5(3)(d) of the Act, if an otherwise qualifying ancillary fee or charge that is required to be paid by a particular full-time or part-time student is not required to be paid by all of an institution's full-time or part-time students, as the case may be (hereinafter referred to as a "non-universal fee"), the fee may only be included as an ancillary fee or charge to the extent that the total of all non-universal fees paid in respect of the particular student's enrolment at the institution does not exceed $250. Thus, since the Placement Fee appears to be a non-universal fee (because it is charged only to students in particular programs), it, along with any other non-universal fees paid in respect of a particular student's enrolment at the University, would be subject to this $250 cap.
We trust that these comments will be of assistance.
Yours truly,
Roxane Brazeau-LeBlond, CA
for Director
Financial Industries Division
Income Tax Rulings Directorate
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