Principal Issues: [TaxInterpretations translation] Are the following expenses eligible physical activity expenses for the purposes of the Children's Fitness Tax Credit?
(1) course registration fees;
(2) speed skate rental fees;
(3) mandatory affiliation fees to the Fédération de patinage de vitesse du Québec;
(4) competition registration fees.
Position: To the extent that the fees all relate to a program that is a prescribed program of physical activity, the Canada Revenue Agency is of the view that the fees represent an eligible fitness expense.
Reasons: Wording of the definition of "eligible expense" in subsection 118.03(1) of the Income Tax Act.
2007-023204 XXXXXXXXXX François Bordeleau, Advocate February 15, 2008
Dear Sir,
Subject: Children's Fitness Tax Credit
This is in response to your letter of April 18, 2007 asking whether certain fees paid for a prescribed program of physical activity may qualify for the children's fitness tax credit ("CFTC").
More specifically, you indicated that your organization offers various skating courses to young children aged 4 to 16 as part of its activities from September to April. You asked whether the following fees are eligible expenses under subsection 118.03(1) of the Income Tax Act (the “Act”):
- course registration fees;
- speed skate rental fees;
- mandatory affiliation fees to the Fédération de patinage de vitesse du Québec;
- competition registration fees.
The term "the expenses in question" will be used to refer to the above expenses.
Unless otherwise indicated, all statutory references herein are to the provisions of the Act.
Under subsection 118.03(2), an individual may claim the CFTC if the individual pays an amount that is an "eligible expense". In general terms, an eligible expense includes the amount of a fee paid to a qualifying entity attributable to the cost of registration or membership of the qualifying child in a prescribed program of physical activity. The cost of registration or membership includes the cost to the qualifying entity of the program in respect of its administration, instruction, rental of required facilities, and uniforms and equipment that are not available to be acquired by a participant in the program for an amount less than their fair market value. However, the cost of registration or membership does not include, inter alia, the cost of accommodation, travel, food or beverages.
To the extent that the fees in question all relate to a program that is a prescribed program of physical activity, it is our view that the fees in question all represent "eligible fitness expenses".
Best regards,
Randy Hewlett
Manager
Business and Partnerships Section
Business and Partnerships Division
Income Tax Rulings Directorate.