23 February 1996 External T.I. 9605185 - TUITION TAX CREDIT FOR INSTITUTION 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.

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:

whether tuition fee credit may be claimed where educational institute outside Canada has applied for university status, where courses offered are reputably comparable to programs available at universities in Canada and in respect of which a Canada Student Loan has been approved

Position:

no

Reasons:

must be a university

		960518
XXXXXXXXXX	Sandra Short

February 23, 1996

Dear XXXXXXXXXX:

Re: Tuition paid to XXXXXXXXXX

This is in reply to your letter dated January 28, 1996 which asks that we reconsider your daughter's entitlement to claim a tuition tax credit in respect of her 1995 tuition fees paid to the XXXXXXXXXX (the Institute).

Where a student attends an educational institution outside Canada, paragraph 118.5(1)(b) of the Income Tax Act is the applicable reference stating the requirements which must be met before the individual is entitled to the tuition tax credit. Paragraph 118.5(1)(b) specifically requires that the student be "in full-time attendance at a university outside Canada in a course leading to a degree...". The requirements of the statute are not met where, among other things, the institute is not a university or where the student is not taking a course which leads to a degree. While a tuition tax credit is available to a student enrolled at an educational institution in Canada that is a university, college or other educational institution providing courses at a post-secondary school level, the legislation is clear that the tuition tax credit is not available to a student who attends any educational institution outside Canada that is of a type other than a university. Additionally, the student must be in a course which leads to a degree.

It is our understanding that the Canada Student Loans Act may recognize a university, college, or other educational institution for the purpose of granting loans to applicants; thus, approval for a loan under this Act does not support a finding that the Institute is a university or that the student is in a course leading to a degree. We appreciate that the Institute has now applied for university accreditation in XXXXXXXXXX and that this may be indicative that its programs of study may be considered comparable to those offered at universities in Canada. However, the Act does not extend the tuition tax credit to a situation where fees are paid to an institution which offers courses of study which may be similar to those offered by a university but which is not a university. It is our opinion that it would require an amendment to the Act in order to permit a tuition tax credit for fees paid to an institution outside Canada that is anything other than a university. Such amendments are the purview of the Department of Finance.

As an additional comment, we are not sure what you intended by your comment that 1995 is the only year in which your daughter will be able to claim the tuition tax credit because she has applied and received approval for a loan under the Canada Student Loans Act for her second year of studies at the Institute in 1996. A loan which assists a student in paying tuition costs does not impede the student's entitlement to a tuition tax credit.

We have enclosed a copy of Interpretation Bulletin IT-516R and would direct you to the comments in paragraphs 4 and 5 thereof. Recognition of an institution as a university will be considered only at the request of the institution. Should the Institute make successful application to this Department for recognition as a university once approval for such status has been granted by its own national accrediting agency in XXXXXXXXXX you may wish to contact your local tax services office to determine the earliest year in which the Institute's status as a university can or will be recognized by this Department. The comments found in paragraph 8 of Interpretation Bulletin IT-156R also explain the situations which will impede a student's entitlement to the tuition tax credit where the student is attending a university outside Canada.

We trust our comments have been of assistance to you.

Yours truly,

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

Encl.

c.c. Debra Symonds, International Tax Directorate

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