21 September 2012 External T.I. 2012-0461911E5 - medical expenses - travel outside country

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 medical and travel expenses incurred for surgery outside of the country qualify as medical expenses for purposes of the medical expense tax credit?

Position: Insufficient information provided to determine whether requirements of paragraphs 118.2(2)(a), (g) and (h) are met.

Reasons: The law.

XXXXXXXXXX
2012-046191

September 21, 2012

Dear XXXXXXXXXX:

Re: Medical Expense Tax Credit – Medical Travel Expenses

This is in response to your letter of September 12, 2012, inquiring about whether your client can claim medical and travel expenses incurred outside the country.

Your client is planning on going to the United States to have surgery. You are asking whether the cost of the surgery and related travel expenses qualifies as a medical expense for purposes of the medical expense tax credit.

Written confirmation of the tax consequences that apply to a particular fact situation is given by this Directorate only in the context of an advanced income tax ruling request submitted in the manner set out in Information Circular 70-6R5, Advanced Income Tax Rulings, dated May 17, 2002. This Information Circular and other Canada Revenue Agency publications can be accessed on the CRA Web site at www.cra-arc.gc.ca. However, we are prepared to provide the following general comments, which may be of assistance.

Our Comments

Medical Services

Medical expenses which are eligible for the medical expense tax credit (“METC”) are limited to those described in subsection 118.2(2) of the Income Tax Act ("Act"). If a particular expenditure is not described as an eligible medical expense in subsection 118.2(2) of the Act, or if the conditions under which the expenditure would qualify are not met, the expenditure does not qualify for purposes of the METC, even though the expenditure may have been incurred for medical reasons.

Subsection 118.2(2) of the Act defines the expenses that qualify for the METC. Pursuant to paragraph (a) of that provision, an amount is considered to qualify as a medical expense of an individual if it is paid to a medical practitioner, dentist or nurse or a public or licensed private hospital in respect of a medical or dental service. In general terms, a "medical practitioner" is a person who is authorized by a province or other jurisdiction to act as a medical practitioner. In our view, a person is authorized by a province or other jurisdiction to act as a medical practitioner if there is specific legislation that enables, permits or empowers the person to practice as such.

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 and meals) incurred in respect of the patient and, where the patient was, and has been certified by a medical practitioner to be, incapable of travelling without the assistance of an attendant, in respect of one 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.

We do not have sufficient information to determine whether all of the requirements set out above are met. Therefore, we cannot determine whether the medical costs and travel costs incurred qualify as medical expenses for purposes of the METC.

We trust our comments will be of assistance.

Yours truly,

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