15 May 1996 Income Tax Severed Letter 9608427 - Tuition tax credit — university 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:

Would tuition fees paid to a foreign university for courses qualify as deductible tuition fees pursuant to subparagraph 118.5(1)(b) in the case of two specific postgraduate programs which are offered via computer hookup.

POSITION TAKEN:

In order for tuition fees paid to a university outside Canada to qualify for the tuition tax credit, certain criteria, as discussed in IT-516R, must be met. Upon review of the information submitted it is clear that although both universities are accredited educational institutions and the programs lead to a degree upon successful conclusion in the case of one of the universities although the University in question considers the student to be in full-time attendance, the courses are not at least 13 weeks in duration and thus the tuition paid in respect of these courses would not be deductible. In the case of the other University, it appears the criteria has been met.

REASONS FOR POSITION TAKEN:

Legislation. Previous correspondence 951372

May 15, 1996

Edmonton Tax Services OfficeHEADQUARTERS Client Assistance D. Zion (613) 957-8953 Attention: Louise Johnson 960842

Tuition Tax Credit - University Outside Canada

This is in response to your memorandum of March 4, 1996, in which you ask whether or not tuition fees paid for courses taken via computer hookup at a university located outside of Canada would qualify for the tuition tax credit. You have some concerns that the courses are correspondence courses and in light of the comments contained in paragraph 10 of interpretation bulletin IT-516 Tuition Tax Credit, the tuition fees would not be eligible for the tuition tax credit.

As we understand the situation, XXXXXXXXXX He has obtained information, which has been provided to us for review, from XXXXXXXXXX regarding their independent study programs in which all, or the majority of instruction, is provided via computer hookup.

XXXXXXXXXX has requested confirmation as to the deductibility of the tuition fees paid for these programs. The programs under consideration at both universities lead to a degree upon successful completion and, we have made the assumption, based on the information provided, that XXXXXXXXXX would be pursuing postgraduate studies should he decide to enrol at either university.

Our Comments

In order for tuition fees paid to a university outside Canada to qualify for the tuition tax credit, certain criteria, as discussed in IT-516R, must be met. Upon review of the information submitted, it is clear that both the universities in question are accredited educational institutions and that the programs lead to a degree upon successful completion. The remaining criteria to be met are whether or not the courses can be considered to be at least 13 consecutive weeks in duration and whether or not the student can be considered to be in full-time attendance at the university under the circumstances described.

We have had occasion to review the deductibility of tuition fees paid to the XXXXXXXXXX It is our understanding, from the information provided to us as well as documentation we have received from the XXXXXXXXXX directly, that the physical attendance requirements under the program in question is limited to computer interaction which allows the long-distance student to participate in and interact with instructors and other students in the program. The program described does not have all the usual characteristics of a correspondence course and is not considered a correspondence course by the XXXXXXXXXX Consequently, it is our view that the tuition fees paid would not be disallowed for this reason.

When a university considers students enrolled in programs such as this to be in full-time attendance with the corresponding expectations of participation and accords them the same rights and privileges as those students physically in full-time attendance in the program, then for purposes of the Act, they should be considered to have met the full-time attendance requirement.

An additional fact came to light during the course of our previous review of the XXXXXXXXXX with respect to the issue of a course's duration. We have confirmed with the XXXXXXXXXX that the courses in question are of XXXXXXXXXX

period which is comparable to the traditional program when a student takes a typical full-time 13-week semester course load. The XXXXXXXXXX courses are comparable in content, instruction and study time to that taken by a student in the traditional semester system, the difference being that the courses are not taken concurrently, but in succession. As a result, the tuition fees paid for these courses are not eligible for the tuition tax credit by virtue of subparagraph 118.5(1)(b)(i) of the Act, because they were paid in respect of a course of less than 13 consecutive weeks duration. In addition, the student would not be eligible for the education tax credit by virtue of courses failing to meet the same 13 consecutive weeks duration requirement contained in paragraph 118.6(1)(b) of the Act. Further investigation may be warranted to confirm the length of the courses in which XXXXXXXXXX intends to enrol at the XXXXXXXXXX before you provide your final response to his request.

Our review of the material forwarded by XXXXXXXXXX indicates that a short period of residency is required for each XXXXXXXXXX course. Given our previous comments regarding whether or not a course should be considered a correspondence course, we are of the view that the courses offered by XXXXXXXXXX are not correspondence courses. It appears that in the XXXXXXXXXX each course runs the length of an entire 15 week semester and, provided that XXXXXXXXXX is considered in full-time attendance by the XXXXXXXXXX it is our view that the tuition fees paid to XXXXXXXXXX would qualify for the tuition tax credit.

We trust that our comments will be of assistance in replying to XXXXXXXXXX

John F. Oulton Section Chief Business, Property & Personal Section Business and Publications Division Income Tax Rulings and Interpretations Directorate Policy and Legislation Branch