29 June 2004 Internal T.I. 2004-0078231I7 - Medical Expenses - Cosmetic procedures

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Principal Issues: Could a medical plan qualify as a PHSP if it included coverage for cosmetic medical expenses (botox & artecoll injections, eyelid surgery)?

Position: Yes

Reasons: It is our position that an amount paid to a medical practitioner for surgery of any kind whether cosmetic or elective generally qualifies as a medical expense.

Mr. Derek Tolmie

Ottawa Tax Service Office
Tax Avoidance Section 2004-007823
Shaun Harkin, CMA

June 29, 2004

Dear Mr. Tolmie:

Re: Technical Interpretation Request: XXXXXXXXXX

This is in reply to your letter of May 25, 2004 wherein you requested our view on whether the above-mentioned plan could qualify as a private health services plan ("PHSP") considering the fact that the plan included coverage for botox and artecoll injections and cosmetic eyelid surgery. You also asked for our position on whether cosmetic surgery qualifies as a medical expense.

Our Comments

In order for a plan to be a PHSP, coverage must be limited to hospital care or expenses or medical care or expenses, which normally would otherwise have qualified as a medical expense under the Income Tax Act (the "Act").

Under paragraph 118.2(2)(a) of the Act, an amount paid to a medical doctor normally qualifies as a medical expense for the purpose of the medical expense tax credit, since such amounts are usually paid for medical services rendered. In our view, when an amount is paid to a medical practitioner in respect of surgery of any kind, whether cosmetic or elective, there is a presumption that the surgery is beneficial to the patient's health. Consequently, it is our view that the amount paid to a medical practitioner for cosmetic eyelid surgery can generally be accepted as being a medical expense that qualifies under paragraph 118.2(2)(a) of the Act.

As for botox and artecoll injections, it is our view that these are in respect of medical services. Therefore, any amount paid to a medical doctor for these services would qualify as a medical expense for the purpose of the medical expense tax credit under paragraph 118.2(2)(a) of the Act.

Accordingly, the fact that the above-mentioned plan includes coverage for botox and artecoll injections and cosmetic eyelid surgery would not in and of itself exclude the plan from qualifying as a PHSP.

We trust the above comments are of assistance.

Yours truly,

Wayne Antle, CGA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate

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