4 August 1994 External T.I. 9411365 - TUITION FEES

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.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues:

what is an eligible tuition fee

Position TAKEN:

reiterate what is in para 27 & 28 of it-516

Reasons FOR POSITION TAKEN:

enquirer was looking for confirmation of specific fees as he thought the bulletin was unclear

A. Humenuk
XXXXXXXXXX			941136

Attention: XXXXXXXXXX

August 8, 1994

Dear Sirs:

Re: Eligible Tuition Fees

Your letters of April 15 and May 15, 1994 addressed to the XXXXXXXXXX District Office have been referred to us for reply.

In the comments that follow, unless otherwise stated, all statute references are to the Income Tax Act S.C. 1970-71-72, c.63 as amended, consolidated to June 10, 1993 (the "Act").

You ask us to confirm that the following fees which are charged by XXXXXXXXXX University qualify as eligible tuition fees for the purpose of the tuition tax credit described in section 118.5 of the Act:

Admission and Application Fees including application fees, documentation evaluation fees, letter of permission fees, reinstatement fees, registration change fees and thesis extension fees;

Examination Fees including fees for grade appeals, English proficiency test fees, examination challenge fees and examination rewrite fees;

Charges for Certificates, Diplomas and Degrees including degree and transcript fees;

Academic Fees including concert fees charged to music students who are required to attend such concerts as a requirement to obtain a degree in Music;

Mandatory Student Service Fee calculated with reference to the number of credit hours and used to maintain the career planning and placement office and

Mandatory Athletics Fee calculated with reference to the number of credit hours and used to support the varsity athletic teams, athletic therapy and intramural activities.

Paragraphs 27 and 28 of Interpretation Bulletin IT-516R "Tuition Tax Credit" categorize customary fees which may be charged by an educational institution either as part of the basic fee for instruction or identified separately. In our telephone conversation of July 20, 1994 (XXXXXXXXXX/Humenuk), you indicated that the above noted list of fees represents the list of fees other than subject or course fees which are charged by XXXXXXXXXX University which are potentially eligible as tuition fees.

We cannot confirm the tax consequences of a particular transaction without a thorough review of all relevant facts and documentation pertaining to the transaction. For example, as stated in paragraph 27(e) of the bulletin, application fees are only eligible for the tuition tax credit where the student does in fact subsequently enrol at the educational institution. Accordingly, the comments which follow are intended as general guidance and do not represent confirmation of the eligibility of any particular fee charged by XXXXXXXXXX University in any particular case.

Since the Act does not define the term "tuition fees" for the purposes of the Act, the ordinary or common meaning prevails. The Concise Oxford Dictionary reports the meaning of tuition as "teaching, instruction, especially as a thing to be paid for". The fees described in paragraph 26 of the bulletin relate primarily to the process of instruction whereas the fees described in paragraph 27 relate to some other good or service provided by the educational institution.

The various fees listed in your letter under admission and application fees are considered tuition fees where the student does in fact enrol in the program or courses applied for. Consequently, in the case of a change of registration fee (adding courses, deleting courses or adding and deleting courses), the eligibility of the fees as tuition would depend on the circumstances. For example, where a student deletes 4 out of 5 course without adding any courses, the fee charged could not be considered sufficiently related to the course of instruction to be considered a tuition fee. Thus, like an administrative charge to withdraw from a program, the fee would not be eligible for the tuition tax credit.

As stated in the bulletin, examination fees, such as those described in your letter, are eligible tuition fees as is the fee charged for the degree issued upon the completion of the course load necessary to obtain the degree. However, in our telephone conversation you advised us that an official transcript is separate from the statement of marks which is issued at the end of the school year to advise the student of the degree of success in the courses taken. The purpose of the official transcript is to provide confirmation to other parties of a student's marks in the courses taken at that institution and is a separate service. Accordingly, the fee for transcripts is not an eligible tuition fee.

Under the category of academic fees, you indicated in our telephone conversation that students enrolled in the faculty of Music are charged a $XXXX fee to cover the cost of concerts which the student is required to attend. The Dean of Music in consultation with faculty members chooses the concerts and purchases the appropriate number of tickets with this fee. These concerts are not necessarily performed by the students and staff at the University. Where attendance at the concerts is a compulsory part of the student's program, the fee charged for the concerts would be an eligible tuition fee.

In the case of student activity fees, whether social or athletic, it is not relevant whether or not the fee is mandatory or whether or not the student can or will avail himself/herself of the services covered by the fee. As stated in paragraph 28 of the bulletin, athletic fees are not considered eligible tuition fees. This is so even where such fees are charged to all students irrespective of their participation in athletic events. In a similar manner, fees charged for health services, career counselling and job placement are considered as fees for additional services and are not eligible for the tuition tax credit. Accordingly, the mandatory student service and athletic fees described in your letter would not be eligible for the tuition tax credit.

While we trust that our comments are of assistance to you, we would caution that they do not constitute an advance income tax ruling and are, accordingly, not binding upon the Department with respect to any particular transaction.

We trust our comments will be of assistance to you.

Yours truly,

P.D. Fuoco
for Director
Business and General Division
Rulings Directorate
Policy and Legislation Branch