Income Tax Severed Letters

Principal Issues: 1. Whether amounts paid to a fertility clinic in Canada, to obtain reproductive materials which are sourced by the Canadian fertility clinic from a donor bank outside of Canada, are eligible medical expenses for purposes of the medical expense tax credit (METC). 2. Whether the cost of certain assisted human reproduction services that were contracted with and paid to a fertility clinic or donor bank located outside Canada are eligible medical expenses for purposes of the METC. 3. Whether the cost of certain assisted human reproduction services where an individual who wants a child needs to purchase donor eggs, donor sperm and requires the use of a surrogate mother are eligible medical expenses for purposes of the METC. 4. Whether amounts paid either directly to a donor or surrogate, or paid to a fertility clinic or donor clinic, in respect of the donor or surrogate could be an eligible medical expense for purposes of the METC. 5. Whether administrative fees charged by the fertility or donor clinics are eligible medical expenses for purposes of the METC where they are ancillary to medical services performed or the purchase of goods that are eligible medical expenses. 6. Whether receipts used to support a METC claim by a taxpayer, from a fertility or donor clinic, need to describe the nature of each service or good provided, for the fees paid to the fertility and donor clinics.

Position: 1. Question of Fact. 2. Question of Fact. 3. Question of Fact. 4. Likely, yes. 5. Question of Fact. 6. Yes.

Reasons: 1. Legislation, paragraph 118.2(2)(v) specifies that the amounts must be paid to a fertility clinic or donor bank in Canada, however, it does not specify that the reproductive material must be obtained in Canada. 2. Where assisted human reproduction procedures are for the patient, they may be eligible medical expenses pursuant to paragraphs 118.2(2)(a), (n) or (o). 3. Where assisted human reproduction procedures are for the surrogate, they may be deemed to be the medical expense of the individual if the goods are acquired in or services are received in Canada by the surrogate. 4. Legislation 5. Depends on whether the amounts fall under 118.2(2)(a) or 118.2(2)(v). 6. Legislation.