22 January 1998 External T.I. E9800005 - TRAVEL, ROOM AND BOARD AS 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:

Whether transportation, room and board expenses can be considered tuition fees under existing and proposed legislation.

Position:

no.

Reasons:

IT-516R2 clearly states that such expenses do not qualify as tuition fees. The proposed introduction of subsection 118.5(3) should not change this position. The proposed legislation was not intended to allow such expenses according to Mr. Robert Dubrule of Finance.

Mr. Brian G. Long
Director, International Academic
   Relations Division              					980000
Department of Foreign Affairs     				 J.E. Grisé
  and International Trade
125 Sussex Drive
Ottawa, Ontario
K1A 0G2

January 22, 1998

Dear Mr. Long:

Re: Eligible Tuition Fees

This is in reply to your letter of December 19, 1997, concerning items that may be considered as eligible tuition fees for the purpose of the non-refundable tax credit relating to tuition fees.

You are particularly interested in our assessment whether tuition fees would qualify as eligible tuition tax credits if the university, college or other educational institution in Canada offering a given course included in its tuition fees all related costs associated with the complete fulfilment of the requirements for the course, including the costs of actually getting the student to the site of study.

You would also like clarification of another potential scenario. In this scenario, a university or college charges a student for living and meals expenses at the institution. It also sets a tuition fee for the student to participate during part of the period in a program abroad. The institution undertakes to cover any shortfall that might apply to the living and meals costs related to that period abroad.

We are attaching Interpretation Bulletin IT-516R2, Tuition Tax Credit, for your information. Paragraphs 26 and 27 of the bulletin are of particular interest to you since they describe what items are considered eligible tuition fees and the items that are not considered eligible tuition fees. You will note from items (c) and (d) of paragraph 27 of the bulletin that transportation, board and lodging are not considered eligible tuition fees whether identified separately or included as course or subject fees. Accordingly, in our view, the payments in the two situations you have raised relating to transportation, living and meals cost would not qualify for the tuition fee tax credit.

Bill C-28 which received first reading on December 10, 1997, contains proposed amendments, for 1997 and subsequent years, to the legislation relating to tuition fees. We are enclosing, for you convenience, a copy of the proposed changes along with the explanatory notes to the proposed changes prepared by the Department of Finance. In our view, the proposed legislation will not apply to include the type of expenses referred to in your letter as tuition fees.

Since the current and proposed legislation on tuition fees do not include the type of expenses outlined above, you way wish to review the matter with the Department of Finance.

Yours truly,

John F. Oulton
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch

Attachments

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