Principal Issues: Client is requesting official confirmation that it may issue T2202A - Tuition, Education and Textbook Amounts Certificates as outlined under IT-516R2 Tuition Tax Credit
Position: Depends
Reasons: Question of fact, legislation, and previous position
XXXXXXXXXX 2010-038401 George A. Robertson, CMA July 4, 2011
Dear XXXXXXXXXX :
Re: Issuance of T2202A - Tuition, Education and Textbook Amounts Certificates
This is in response to your request of September 27, 2010 sent to Canada Revenue Agency (CRA) XXXXXXXXXX Tax Services Office concerning confirmation that XXXXXXXXXX may issue T2202A - Tuition, Education and Textbook Amounts Certificates (T2202A).
Our understanding of the facts is:
- XXXXXXXXXX states:
- that it is an educational institution providing courses at a post-secondary school level;
- it is now in its XXXXXXXXXX year of existence, and has more than XXXXXXXXXX full-time students; the semesters are XXXXXXXXXX weeks long, and the primary method of instruction is XXXXXXXXXX ;
- the level of instruction is post-secondary and has been recognized as such by universities in Canada and the United States.
- XXXXXXXXXX have strict entrance requirements, which include requiring the obtaining secondary school diploma, and written examinations for the successful completion of courses.
- Students who complete XXXXXXXXXX requirements receive certificates.
- XXXXXXXXXX is not listed as being certified by the Minister of Human Resources and Skills Development (HRSD) to be an educational institution for purposes of subparagraph 118.5(1)(a)(ii) of the Income Tax Act (the Act)--providing courses, other than courses designed for university credit, that furnish a person with skills for, or improve a person's skills in, an occupation. . .
- XXXXXXXXXX is not listed in The Canadian Information Centre for International Credentials' (CICIC) searchable list of all public and private recognized and authorized post-secondary institutions across Canada.
- XXXXXXXXXX is not offering its courses as leading to a degree.
- XXXXXXXXXX is a registered charity carrying on its charitable activities classified as "Education and Research".
Written confirmation of the tax implications inherent in particular transactions may only be provided by this Directorate where the transactions are proposed and are the subject matter of an advance income tax ruling submitted in the manner set out in Information Circular 70-6R5, Advance Income Tax Rulings, dated May 17, 2002. This Information Circular and other CRA publications can be accessed on the Internet at http://www.cra-arc.gc.ca/formspubs/menu-e.html. We are however, prepared to provide the following general comments, which may be of assistance.
Our comments
The CRA's general views regarding the tuition tax credit are found in Interpretation Bulletin IT-516R2 Tuition Tax Credit. Paragraph 118.5(1)(a) of the Act sets out the rules for an individual to qualify for a tuition tax credit for courses taken at an educational institution in Canada. Generally, in order to qualify for a tuition tax credit pursuant to this paragraph, the individual must:
- have been enrolled at a university, college or other educational institution that is in Canada,
- taking courses at the post-secondary level (unless the educational institution is certified by Human Resources and Skills Development Canada [HRSDC]) and
- the fees paid must have exceeded $100.
The Canadian Information Centre for International Credentials (CICIC) maintains a searchable list of all public and private recognized and authorized post-secondary institutions across Canada. These are institutions that have received "consent" from the province or territory where the institution is located to offer a degree program. If an institution is not on the list maintained by the CICIC, it does not mean that the institution is not a post-secondary institution.
In considering if an entity is an educational institution, reference should be made to the ordinary usage of these words. The Tax Court of Canada (the TCC) discussed what qualifies as an educational institution in Canada in the case of Hillman v. the Queen, 2006 TCC 578. . .
According to the court, the Oxford dictionary defined Education as:
the systematic instruction, schooling or training given to the young in preparation for the work of life; by extension similar instruction or training obtained in adult age.
An institution was defined as:
an establishment, organization, or association instituted for the promotion of some object, esp. one of public or general utility, religious, charitable, educational etc...
As well, it must be determined whether the types of courses offered by the institution are at the "post-secondary level". Generally, a course would be at the post-secondary level if a student is required to have a high school diploma to take the course, or the credit given for the course is included towards earning a college or university degree or diploma. It is possible for a student to be registered at an "educational institution in Canada" and be taking post-secondary courses at this institution without the institution being registered with the province in which it is located. [Emphasis added]
The issuance of T2202A slips depends on each particular situation and the fulfilling of the requirements of section 118.5 of the Act, for the tuition tax credit. Offering courses at a post- secondary school level is one of the necessary pre-requisites for this credit. XXXXXXXXXX has not yet been certified to grant degrees or diplomas at the post secondary level. It would be helpful if your courses were included towards earning a college or university degree or diploma and if your courses are recognized by registrars at other Canadian universities. You will need to ensure you have proper documentation, with the independent validation from other Canadian universities to support your student's entitlement to the Tuition, Education and Textbook amounts.
Institutions wishing to obtain information on certification requirements and procedures for purposes of subparagraph 118.5(1)(a)(ii) of the Act should refer to the web site www.hrsdc.gc.ca/eng/learning/canada_student_loan/MCL/priv.shtml
While we trust that these comments will be of assistance, they are given in accordance with the practice referred to in paragraph 22 of IC 70-6R5 and are not binding on the CRA in respect of any particular situation.
Yours truly,
Sharmini Ratnasingham
Assistant Director
Ontario Corporate Tax Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch