7 April 2006 External T.I. 2005-0152801E5 F - Remboursement de frais de scolarité -- summary under Subsection 15(1)

In finding that the payment by a corporation of the expenses (tuition, accommodation and travel) for Bob, its sole employee and sole shareholder, to attend an executive MBA (EMBA) program did not give rise to a taxable benefit under s. 15(1) or 6(1)(a), CRA stated:

[T]he EMBA program is indirectly related to the corporation's business and will provide Bob with the necessary skills and abilities that will enable the corporation to develop new business opportunities. ...

It is not uncommon today for employers to pay the costs of training their employees for programs such as the EMBA. We therefore believe that section 15 should not apply in this case since the payment of tuition fees represents a bona fide business transaction. With respect to subsection 6(1) - the provision governing employee benefits - we also exclude its application for the same reasons.

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