23 July 2009 External T.I. 2007-0260961E5 - Universities Outside Canada

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 XXXXXXXXXX is considered by the CRA to be a "university outside Canada" for purposes of section 118.5 of the Income Tax Act?

Position: Yes

Reasons: Confirmed by IRPPD. XXXXXXXXXX is a member of XXXXXXXXXX , and confers degrees at the Bachelor level and above.

                                                2007-026096
XXXXXXXXXX                                      Lori Merrigan
(613) 957-8979
July 23, 2009

Dear XXXXXXXXXX :

Re: Universities Outside Canada - Sections 118.5 and Schedule VIII

This is in response to your letter of November 12, 2007, inquiring about the Canada Revenue Agency's ("CRA") position regarding XXXXXXXXXX . We apologize for the delay in replying to your letter.

Written confirmation of the tax implications inherent in particular transactions, involving a specific taxpayer, is given by this Directorate only where the transactions are proposed and are the subject matter of an advance income tax ruling request submitted in the manner set out in Information Circular 70-6R5, "Advance Income Tax Rulings". This Information Circular and other CRA publications can be accessed on the internet at http://www.cra-arc.gc.ca. Should your situation involve a completed or ongoing transaction, you should submit all relevant facts and documentation to the appropriate Tax Services Office ("TSO") for their views. Although we cannot comment on your specific situation, we are able to provide the following general comments, which may be of assistance.

Generally, an individual who is, during the year, a student in full-time attendance at a university outside Canada may claim a tuition tax credit for any tuition fees paid for the year to that university, pursuant to paragraph 118.5(1)(b) of the Income Tax Act (the "Act"), provided, among other things, that the fees are for a course of at least 13 consecutive weeks duration leading to a degree. The CRA does not generally consider a student to be in full-time attendance at a university outside Canada where the courses are taken only by correspondence. For more information on this issue please refer to CRA publications P105, "Students and Income Tax", and RC192, "Information for Students - Educational Institutions Outside Canada" ("RC192"), which are available on the CRA Web site.

The term "university" is not defined in the Act, therefore, one must look to the meaning of the term as it is ordinarily defined and understood. An educational institution located in a country outside Canada is generally considered to be a "university" for purposes of paragraph 118.5(1)(b) of the Act if it is recognized by an accrediting body of that country as being an educational institution which confers degrees of at least the bachelor or equivalent level. For more details please see our publication RC192, referred to above.

The CRA accepts that an institution listed in Schedule VIII of the Income Tax Regulations (the "ITR") is an educational institution satisfying the requirements of paragraph 118.5(1)(b) of the Act. However, the list of institutions provided in Schedule VIII is not an exhaustive list for purposes of what is a "university" as that term is used in section 118.5 of the Act. XXXXXXXXXX is not listed in Schedule VIII; nevertheless, we can confirm that this educational institution is considered by the CRA to be a "university outside Canada" for purposes of section 118.5 of the Act, as it is a member of XXXXXXXXXX and confers degrees at the bachelor's level and above.

To be considered for prescribed status and listed in Schedule VIII of the ITR, which relates to charitable donations, it is the responsibility of an official or authorized representative of the foreign educational institution to send a written request to the CRA accompanied by required documentation. Additional information concerning such an application can be found in the CRA publication RC191, "Donations to Prescribed Universities Outside Canada", which is available on the CRA Web site.

We trust that these comments will be of assistance.

Yours truly,

Eliza Erskine
A/Manager
Non-Profit Organizations and Aboriginal Issues
Financial Sector and Exempt Entities Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch