17 February 1989 Income Tax Severed Letter 5-7260 -  

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.

J. A. Szeszycki (613) 957-2130

FEB 17 1989

Dear Sirs:

Re: Tuition Fees

We are responding to your letter of December 6, 1988 concerning the deductibility of tuition fees under the circumstances described below and whether amounts paid by the employer in respect of tuition fees of the employee would be considered a taxable benefit to the employee.

The facts of your situation, as we understand them are that:

XXXX

The legislated rules governing the deductibility of amounts in respect of tuition fees, where a student is in full time attendance at a university outside Canada are contained in paragraphs 60(e) of the Income Tax Act (the "Act")(for the 1987 and prior taxation year) and 118.5(1)(b) of the Act (for the 1988 and subsequent taxation years). Those provisions specifically exclude any fees paid in respect of a course that is less than 13 weeks in duration and the wording used is sufficiently clear as to preclude any discretion as to how those words will be interpreted. We must advise, therefore, that the tuition fees in respect of summer courses at the XXXX that are of less than 13 weeks duration cannot be considered for tax purposes. This is so regardless of whether the individual fits the description used in paragraph 8(a) of IT-82R3 as "a student in full-time attendance at a university in a course leading to a degree at not lower than the bachelor or equivalent level ..."

With respect to the taxability, as a benefit to the employee, of tuition fees paid by the employer on behalf of the employee, the comments found in paragraphs 18 and 19 of IT-470R (a copy of which is attached for your convenience) should provide the guidance you are looking for. There is insufficient detail in your letter for us to draw a conclusion one way or the other. It should be emphasized, however, that the taxability of the benefit does not depend on the deductibility of an amount in respect of tuition fees by the employee.

It is hoped the above comments assist in clarifying the Department's position on the matter.

Yours truly,

ORIGINAL SIGNED BY ORIGINAL SIGNÉ PAR

P. D. FUOCO

for Director Small Buainesa and General Division Specialty Rulings Directorate Legislative and Intergovernmental Affairs Branch

Enclosure