13 May 1999 External T.I. 9907405 - TUITION TAX CREDIT-DISTANCE LEARNING'

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 an individual would be entitled to the tuition tax credit for tuition fees paid to a U.K. university, in respect of a distance education postgraduate degree program of the university.

Position TAKEN:

No.

Reasons FOR POSITION TAKEN:

The individual would not be in “full-time attendance at a university outside Canada” as required in paragraph 118.5(1)(b). As indicated in paragraph 11 of IT-516R2, where the courses are taken only by correspondence, the student is not considered to be in full-time attendance at the university.

XXXXXXXXXX 5-990740
M. Azzi
May 13, 1999

Dear Sir:

Re: Tuition Tax Credit

This is in response to your letter of March 12, 1999, which is a follow-up to our reply to you of February 17, 1999, regarding the tuition tax credit.

We understand that you are a Canadian resident, you have a full-time job in Canada, and you would like to enrol in a distance education postgraduate (MBA) degree program at XXXXXXXXXX in the U.K. You note that, in your view, certain comments made in paragraphs 11 and 12 of Interpretation Bulletin IT-516R2, Tuition Tax Credit, seem to indicate that the program you are considering would qualify for the tuition tax credit, notwithstanding that you will not be in attendance at the university.

Our Comments

As indicated in our previous letter, one of the specific requirements of section 118.5 of the Income Tax Act (the “Act”), for claiming a tuition tax credit with respect to tuition fees paid to a university outside Canada, is that the student must be in full-time attendance at the university. As indicated in paragraph 11 of IT-516R2, where the courses are taken only by correspondence, the student is not considered to be in full-time attendance at the university. Accordingly, based on our understanding that the program you are considering with XXXXXXXXXX is a distance education program and that you will not be attending the university, you will not meet the full-time attendance requirement and, consequently, you will not be entitled to the tuition tax credit in respect of tuition fees paid for this program.

Please note that the comments in the last sentence of paragraph 11 and in paragraph 12 of IT-516R2 do not apply to your situation. These comments apply to students who are, to some degree, in attendance at a university outside Canada and, therefore, must consider whether other activities (such as their employment, research or thesis writing) would disqualify them from being in attendance “full-time”.

Finally, please note that Revenue Canada does not write or amend legislation; the function of Revenue Canada is to administer and enforce the laws set out in the Act. The concerns raised in your letter, regarding the fact that the Act contains a full-time attendance requirement for universities outside Canada, relate to tax policy, which is the responsibility of the Department of Finance and, accordingly, they should have been addressed to that Department. If you wish to pursue the tax policy concerns further, your enquiry should be directed to:

Department of Finance
Tax Policy Branch
L’Esplanade Laurier
140 O’Connor Street
Ottawa, Ontario
K1A 0G5

We trust that these comments will be of assistance.

Yours truly,

Jim Wilson
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch

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