15 September 2003 External T.I. 2003-0011695 - TUITION TAX CREDIT FOREIGN UNIVERSITY

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 CCRA.

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

Principal Issues: Is a U.S. university program based on a 3-semester system, with each semester lasting 10 weeks, plus a week of exams, eligible for the tuition tax credit?

Position: No

Reasons: Interpretation of the legislation and consistent with prior opinions.

2003-001169
XXXXXXXXXX Renée Shields
(613) 948-5273
September 15, 2003

Dear XXXXXXXXXX:

Re: Tuition Tax Credit

This is in response to your electronic correspondence of April 30, 2003 inquiring whether fees for a program offered by XXXXXXXXXX, on a campus in the United States, ("the Program") is eligible for the tuition tax credit.

Written confirmation of the tax implications inherent in particular transactions is given by this Directorate only where the transactions are proposed and are the subject matter of an advance income tax ruling request submitted in the manner set out in Information Circular 70-6R5, Advanced Income Tax Rulings, dated May 17, 2002. Where the particular transactions are completed, the inquiry should be addressed to the relevant tax services office. The following comments are, therefore, of a general nature only and are not binding on the Canada Customs and Revenue Agency ("CCRA"). All publications referred to herein can be accessed on the CCRA website at the following address: http://www.ccra-adrc.gc.ca/tax/technical/incometax/menu-e.html.

The CCRA's general views regarding the tuition tax credit are contained in Interpretation Bulletin IT-516R2, "Tuition Tax Credit."

We understand that the Program is of a ten-week duration, followed by one week of exams. One of the main tests in the Income Tax Act (the "Act") for the tuition fees paid to a foreign university to be eligible for the tuition tax credit is the requirement that the course cannot be less than thirteen consecutive weeks in duration. The only exception to the thirteen-week rule is for students living in Canada who commute from their residence near the boundary between Canada and the United States to an educational institution in the United States. Accordingly, the wording of the Act does not permit the Program to qualify for the tuition tax credit.

While the CCRA is responsible for administering and enforcing the Act, we note that the Department of Finance is responsible for tax policy and any proposed changes to the Act. As such, we have drawn this situation to the attention of the Department of Finance and would recommend that any follow up queries be addressed to the Tax Legislation Division of its Tax Policy Branch.

We trust that these comments will be of assistance.

Yours truly,

Mickey Sarazin, C.A.

for Director
Financial Industries Division
Income Tax Rulings Directorate
Policy and Legislation Branch