| 19(1) | File No. 5-9820 |
| S. Short | |
| (613) 957-2134 |
June 21, 1990
Dear Sirs:
Re: Tuition Fees - Overseas Study Tours
This is in reply to your letter dated March 20, 1990 wherein you have queried the deductibility, for tax purposes, of costs incurred by 24(1) in study tours to foreign countries. You provided the following details:
1. The tours are organized by private enterprises and designed specifically for elementary and secondary school teachers. The 24(1) reviews the travel itinerary to ensure it has sufficient educational content.
2. School visits are arranged in the foreign country to give teachers first hand experience with the country's culture and educational system. There is a considerable professional development expectation of the teacher. The teacher is expected to develop teaching units and to submit a detailed report to the 24(1) to assist in developing teaching curriculum.
3. The teacher's employer, a local school district, 24(1)
4. Teachers are normally paid salary in respect of the school year (10 months) and are not paid in respect of July or August.
You have concluded that the costs incurred by a teacher are not eligible for the tuition credit under section 118.5 of the Income Tax Act since the teacher is not enrolled in an educational institution in Canada that is a university, college or other institution providing courses at a post-secondary school level nor is the teacher enrolled at an educational institution in Canada that is certified by the Minister of Employment and Immigration as described in subparagraph 118.5(1)(a)(ii) of the Act.
We agree with this conclusion.
You asked whether the teacher's cost of participating in a study tour would be eligible if the following conditions were met:
i) the tour was organized by a university or college as a course for teachers;
ii) was not of less than three weeks consecutive duration;
iii) was conducted during the summer while the teacher was not in receipt of income from employment;
iv) cost was billed to the employer (school district) for up to 70% and to the teacher for the balance, and
v) the course otherwise met the requirements of section 118.6 of the Act.
A portion of the teacher's expenses could qualify as tuition fees in the above circumstances if, under condition i) above, the teachers taking the tour were doing so as part or all of a course in which they were enrolled as a student at the educational institution. From a review of the sample itineraries enclosed by you, it appears that formal instruction or lectures would comprise part of such a course.
If this is the case, that part of course fees that relates to such instruction could qualify as tuition fees. As discussed in paragraph 23 of Interpretation Bulletin IT-82R3, fees for student activities, transportation, board and lodging are not considered to be tuition fees. Accordingly, it is unlikely that a significant component of the cost of such a course would qualify as "tuition".
We also point out that the amount paid by the 24(1) may constitute a taxable benefit under paragraph 6(1)(a) of the Act to a teacher taking the course if the tour is primarily for the benefit of the teacher rather than the employer. Please refer to the comments in paragraphs 18 and 19 in Interpretation Bulletin IT-470R in this regard.
It is your opinion that the teacher's cost of participating in a study tour or course as described above would not qualify as a deductible employment expense for tax purposes.
We agree with your opinion which is supported in paragraph 8 of Interpretation Bulletin IT-357R.
You have asked whether any other provisions of the Income Tax Act would permit a deduction or a tax credit to the teachers in respect of the costs they incur.
We are not aware of any such provisions.
We trust that the above comments are of assistance to you.
Yours truly,
R.D. Weil for DirectorBusiness and General DivisionRulings DirectorateLegislative and IntergovernmentalAffairs Branch