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 an educational assistance payment can be in a foreign currency.
Position: Yes
Reasons: Although the RESP rules do not prevent a promoter from paying EAPs in a foreign-denominated currency, there is no obligation on the promoter to issue EAPs in the beneficiary's currency of choice.
Signed on January 26, 2005
XXXXXXXXXX
Dear XXXXXXXXXX:
The Honourable John McCallum, Minister of National Revenue, has asked me to reply to your correspondence of August 5, 2004, addressed to the Honourable Joseph Volpe, former Minister of Human Resources and Skills Development, concerning the issuance of an educational assistance payment (EAP) in a foreign currency. Mr. Volpe's office forwarded a copy of your correspondence to Minister McCallum on September 14, 2004.
Under the rules for a registered education savings plan (RESP), which are set out in the Income Tax Act and the Income Tax Regulations, there is no requirement to issue EAPs in Canadian dollars. However, although the RESP rules do not prevent the administrator of the plan from paying EAPs in a foreign currency, the promoter is not obliged to issue EAPs in the beneficiary's currency of choice. Since an RESP is a contract between a subscriber and an administrator, the contract would ordinarily stipulate the manner in which EAPs are to be issued. Otherwise, it is left to the administrator's discretion whether to issue them in a foreign currency.
I appreciate the opportunity to respond to your concerns.
Yours sincerely,
Ed Gauthier
Deputy Assistant Commissioner
Tax and Regulatory Affairs
Policy and Planning Branch
c.c.: Minister's Office
Political Assistant
James Gibbons
957-9226
2004-009842
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