5 June 2012 External T.I. 2012-0448971E5 - Stem cell therapy not available in Canada

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 the cost of stem cell therapy not available in Canada qualifies for the METC.

Position: Question of fact, but likely yes.

Reasons: Amounts paid to a medical practitioner or a licensed private hospital qualify as a medical expense under paragraph 118.2(2)(a) of the Act.

XXXXXXXXXX
						2012-044897
						André Gallant
June 5, 2012

Dear XXXXXXXXXX:

Re: Stem Cell Therapy

We are replying to your email dated May 24, 2012, concerning the cost of stem cell therapy, which is currently not available in Canada, to treat a severe hearing loss. You are asking whether the amounts paid for travel and medical services would qualify as medical expenses for purposes of the medical expense tax credit (“METC”).

Payments to Medical Practitioners and Hospitals

Amounts paid by an individual to a “medical practitioner” or to a “public or licensed private hospital” to obtain medical services qualify as medical expenses for the METC pursuant to paragraph 118.2(2)(a) of the Income Tax Act (the “Act”). The term medical practitioner can include individuals such as a medical doctor, dentist, pharmacist, nurse or optometrist provided that he or she is authorized to practice in the stated profession according to the laws of the jurisdiction in which the service is rendered, whereas “licensed private hospital” means licensed by the jurisdiction in which the hospital operates. The fact that the jurisdiction is outside Canada would not be relevant in applying these definitions.

Pursuant to paragraph 118.2(2)(o) of the Act, qualifying medical expenses include amounts paid for laboratory, radiological or other diagnostic procedures or services, with necessary interpretations, for maintaining health, preventing disease or assisting in the diagnosis or treatment of an injury, illness, or disability as prescribed by a medical practitioner. Qualifying medical expenses can be in respect of amounts paid to persons or for services received either within, or outside of Canada.

Transportation and Travel Expenses

Under paragraph 118.2(2)(g) of the Act, an individual may claim as an eligible medical expense an amount paid to a person engaged in the business of providing transportation services, to the extent that the payment is made for the transportation of

(i) the patient, and
(ii) one individual who accompanied the patient, where the patient was, and has been certified by a medical practitioner to be, incapable of travelling without the assistance of an attendant from the locality where the patient dwells to a place, not less than 40 kilometres from that locality, where medical services are normally provided, or from that place to that locality, if
(iii) substantially equivalent medical services are not available in that locality,
(iv) the route travelled by the patient is, having regard to the circumstances, a reasonably direct route, and
(v) the patient travels to that place to obtain medical services for himself or herself and it is reasonable, having regard to the circumstances, for the patient to travel to that place to obtain those services.

In addition, under paragraph 118.2(2)(h) of the Act, an individual may claim an amount paid for reasonable travel expenses (for example, accommodation, meals and parking) incurred in respect of the patient and, where the patient has been certified by a medical practitioner to be, incapable of travelling without the assistance of an attendant, in respect of the individual who accompanied the patient, to obtain medical services in a place that is not less than 80 kilometres from the locality where the patient dwells if the circumstances described in subparagraphs (g)(iii), (iv) and (v) above apply.

While it is a question of fact whether the above requirements are met, it is our view that the requirement in (iii) may be met even if medical services are available nearer to the individual’s locality if, in the circumstances, it is reasonable for the individual to have travelled to the place where the medical services were obtained.

For meals and vehicle expenses, you can choose to use the detailed method or the simplified method for calculating meal and vehicle expenses. If you use the detailed method, you have to keep all receipts and records for your 12-month period. For accommodation expenses, you must provide receipts and you must be able to demonstrate that the amount paid for accommodation is necessary as a result of the distance travelled and your medical condition. You can claim the amount for accommodation as shown on your receipts. More information on this topic can be found on the Canada Revenue Agency’s web site at: www.cra-arc.gc.ca.

Based on the information you provided, it is our view that the cost of the stem cell therapy would likely qualify for the METC provided that all the requirements found in paragraph 118.2(2)(a) are met. The cost of travelling to the location where the treatment is received would also likely qualify for the METC provided that all the requirements found in paragraph 118.2(2)(h) are met.

Yours truly,

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