912787
Dear 19(1):
We are writing in reply to your letter of October 2, 1991, wherein you requested our views on the meaning of the word "enrolled" in the context of paragraph 118.5(1)(a) of the Income Tax Act (the Act) as it relates to the following situation:
A college situated in Canada, charges an application fee of $400. This fee is retained by the college if the student is accepted into the college or the student decides not to attend the college. In this regard you have requested our views as to whether or not this fee would be eligible for the tuition tax credit under paragraph 118.5(1)(a) of the Act.
Our Comments
The term "enrolled" is not defined in the Act and should, therefore, be given its ordinary meaning in applying paragraph 118.5(1)(a) of the Act. Webster's Ninth New Collegiate Dictionary defines enrol as "to insert, register or enter in a list, catalogue, or roll ... to enrol oneself or cause oneself to be enrolled."
In the context of enrolment of a student at an educational institution for purposes of paragraph 118.5(1)(a) of the Act, it is our opinion that the student should be registered with the registrar of the institution such that the student would be contractually liable for any tuition fees required to be paid to the institution with respect to the chosen course of study.
Since paragraph 118.5(1)(a) of the Act requires the individual to be enrolled in the institution and the fees must be for tuition in respect of the year, it is our opinion that the $400 fee would not qualify as a tuition fee in the situation where a student, although accepted by the institution, decides not to attend the institution. Should the individual become registered in the institution, the non-refundable application fee of $400 would qualify for the tuition tax credit pursuant to paragraph 118.5(1)(a) of the Act (see paragraph 26 of IT-516).
We trust our comments will be of assistance to you.
Yours truly,
P.D. Fuoco for DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch