19 April 2007 External T.I. 2007-0223981E5 - Medical Expense - Remedies and Supplements

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: Whether any payments for remedies and supplements dispensed to a patient without a prescription would be eligible as a medical expense for purposes of the medical expense tax credit.

Position: No.

Reasons: Payments for remedies dispensed to a patient must be recorded by a pharmacist to qualify as a medical expense for purposes of the medical expense tax credit pursuant to paragraph 118.2(2)(n) of the Income Tax Act. This paragraph also requires that a medical practitioner prescribe the remedy. Remedies described in this paragraph will not qualify as medical expenses if they have been dispensed to a patient without satisfying both of these requirements.

								2007-022398
XXXXXXXXXX  						J. Eckler
(416) 952-8930
April 19, 2007

Dear XXXXXXXXXX:

Re: Medical Expense - Remedies and Supplements

We are writing in reply to your letter of February 2, 2007, regarding medical expenses.

In your letter, you ask whether payments for drugs, medicaments or other preparations or substances prescribed by a medical practitioner or dentist, recorded by a pharmacist, and dispensed to a patient, would be eligible as a medical expense for purposes of the medical expense tax credit.

It is not this Directorate's practice to comment on proposed transactions involving specific taxpayers other than in the form of an advanced income tax ruling. For more information about how to obtain a ruling, please refer to Information Circular 70-6R5, "Advanced Income Tax Rulings, dated May 17, 2002. This Information Circular and other CRA publications can be accessed on the internet at http://www.cra-arc.gc.ca. Should your situation involve a specific taxpayer and a completed transaction, you should submit all relevant facts and documentation to the appropriate Tax Services Office ("TSO") for their views. A list of TSOs is available on the "Contact Us" page of the CRA website. Although we cannot comment on your specific situation, we are prepared to provide the following general comments, which may be of assistance.

Our Comments

The CRA's general views regarding the medical expense tax credit are contained in Interpretation Bulletin IT-519R2 (Consolidated), Medical Expenses and Disability Tax Credits and Attendant Care Expense Deduction. This bulletin is available on our Web site at www.cra-arc.gc.ca. Subsection 118.2(2) of the Income Tax Act (the "Act") includes provisions describing the types of drugs, medicaments and other preparations that may qualify as medical expenses. These are:

(a) drugs, medicaments or other preparations or substances, that are prescribed by a medical practitioner, and purchased from a pharmacist who records the prescription in a prescription record, pursuant to paragraph 118.2(2)(n);

(b) insulin, oxygen and liver extract injectible for pernicious anaemia and vitamin B12 for pernicious anaemia, that are prescribed by a medical practitioner, but which a pharmacy or any other type of store may sell without a written prescription, pursuant to paragraph 118.2(2)(k);

(c) the incremental cost of gluten-free food products, as compared to the cost of comparable non-gluten-free food products, if the patient has been certified in writing by a medical practitioner to be a person who, because of celiac disease, requires a gluten-free diet, pursuant to paragraph 118.2(2)(r);

(d) drugs obtained under Health Canada's Special Access Programme in accordance with sections C.08.010 and C.08.011 of the Food and Drug Regulations and purchased for use by the patient, pursuant to paragraph 118.2(2)(s); and

(e) on behalf of the patient who is authorized to possess marihuana for medical purposes under the Marihuana Medical Access Regulations or section 56 of the Controlled Drugs and Substances Act, for

(i) the cost of medical marihuana or marihuana seeds purchased from Health Canada, or

(ii) the cost of marihuana purchased from an individual who possesses, on behalf of that patient, a designated-person production license to produce marihuana under the Marihuana Medical Access Regulations or an exemption for cultivation or production under section 56 of the Controlled Drugs and Substances Act, pursuant to paragraph 118.2(2)(u).

In order for the amounts described in (a) above to qualify as medical expenses they must be manufactured, sold or represented for use in:

(i) the diagnosis, treatment or prevention of a disease, disorder or abnormal physical state,

(ii) the treatment of the symptoms of a disease, disorder or abnormal physical state, or

(iii) restoring, correcting or modifying an organic function.

The requirements of paragraph 118.2(2)(n) set out above do not necessarily preclude vitamins and minerals, which also happen to be available over the counter without a prescription. However, in our view, the cost of such items generally would only qualify as a medical expense if they were prescribed by a medical practitioner and recorded by a pharmacist. We are unaware of any situation where a licensed pharmacist is required to record the prescription of vitamins and minerals in a prescription record in accordance with the relevant provincial legislation governing such professions. Since a pharmacist is not required to record the purchase of supplements from a Naturopath or Acupuncturist, it is our view that the amounts paid for the supplements will not qualify as a medical expense under paragraph 118.2(2)(n) of the Act.

We trust that these comments will be of assistance.

Yours truly,

G. Moore
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch