9 January 2019 External T.I. 2018-0760741E5 - METC consultation fees and pharmacogenomics test

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 amounts paid for a consultation service and the cost of a pharmacogenomics test, are eligible medical expenses for the purpose of the METC.

Position: Question of fact, see response.

Reasons: See response.

XXXXXXXXXX							2018-076074
C. Underhill
January 9, 2019

Dear XXXXXXXXXX:

Re: Medical expense tax credit - amounts paid for a consultation service and a pharmacogenomics test

We are writing in response to your email dated May 18, 2018, in which you asked whether the cost of a consultation service provided by a pharmacist, which includes the cost of a pharmacogenomics test, are considered to be eligible medical expenses for the purpose of the medical expense tax credit (“METC”).

It is our understanding that the interpretation of the results of the pharmacogenomics test must be delivered to the patient by a pharmacist as part of the consultation service. In a telephone conversation on June 20, 2018 (Underhill/XXXXXXXXXX), you confirmed that:

• a prescription by a medical doctor is not required in order for a patient to take the pharmacogenomics test (i.e., the pharmacist will recommend the patient take the test); and
• the invoice from the pharmacist will provide a breakdown of the costs, for example, the cost of the consultation service and the pharmacogenomics test kit will be separated.

Our comments

This technical interpretation provides general comments about the provisions of the Income Tax Act (“Act”) and related legislation (where referenced). It does not confirm the income tax treatment of a particular situation involving a specific taxpayer but is intended to assist you in making that determination. The income tax treatment of a particular transaction proposed by a specific taxpayer will only be confirmed by this Directorate in the context of an advance income tax ruling request submitted in the manner set out in Information Circular IC 70-6R8, Advance Income Tax Rulings and Technical Interpretations.

The METC is a 15% non-refundable tax credit that provides tax relief for individuals who have incurred significant medical expenses for themselves or certain dependants. The CRA’s general views regarding the METC are contained in Income Tax Folio S1-F1-C1, Medical Expense Tax Credit (the “Folio”).

Medical expenses which are eligible for the METC are limited to those described in subsection 118.2(2) of the 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 will not qualify for purposes of the METC, even though the expenditure may have been incurred for medical reasons.

Amounts paid for medical services provided by medical practitioners who meet specific requirements under the Act are generally eligible for the METC. Paragraph 118.4(2)(a) of the Act, requires the medical practitioner to be authorized to practice in accordance with the laws of their particular jurisdiction. The Canada Revenue Agency’s (“CRA”) webpage titled, Authorized medical practitioners for the purposes of the medical expense tax credit, recognizes a pharmacist in the province of British Columbia as a medical practitioner for the purposes of the METC. Therefore, amounts paid for medical services provided by a pharmacist in B.C. may be eligible expenses for the METC.

As explained in paragraph 1.26 of the Folio, medical services are diagnostic, therapeutic or rehabilitative services that are performed by a medical practitioner acting within the scope of his or her professional training. In addition, as per paragraph 1.27 of the Folio, payments to medical practitioners are considered eligible medical expenses when they are paid for medical services or procedures that relate to existing illnesses or conditions of the patient.

Accordingly, if the medical services or procedures relate to an existing illness or condition of the patient, and the services are provided by a medical practitioner who is acting within the scope of his or her professional training which assist in making a diagnosis or formulating a course of treatment for a patient, the amounts paid for such services would qualify for the METC under paragraph 118.2(2)(a) of the Act.

Under paragraph 118.2(2)(o) of the Act, eligible medical expenses also include amounts paid:

• for laboratory, radiological or other diagnostic procedures or services together with necessary interpretations;
• for maintaining health, preventing disease or assisting in the diagnosis or treatment of any injury, illness or disability;
• for the patient; and
• as prescribed by a medical practitioner.

The expenditures must satisfy all four conditions in order to be considered eligible medical expenses.

The reference to “other diagnostic procedures or services” is generally limited to diagnostic procedures or services of the same class as laboratory or radiological services. Therefore, given the broad wording of paragraph 118.2(2)(o), where a test or procedure is taken to assist the medical practitioner in making a diagnosis, formulating a course of treatment, or maintaining a patient’s health, the cost of the test or procedure would qualify for the METC, provided all the other conditions in paragraph 118.2(2)(o) are met. For more information, see paragraphs 1.128 to 1.131 of the Folio.

It is a question of fact as to whether a particular expenditure or procedure qualifies for the METC. It is our view, that where all the requirements of either paragraphs 118.2(2)(a) or 118.2(2)(o) of the Act are met, the amounts paid for the cost of a consultation service provided by a pharmacist for services rendered in B. C., and the cost of a pharmacogenomics test would likely qualify as eligible medical expenses for the purposes of the METC.

We trust our comments will be of assistance to you.

Yours truly,

Lita Krantz, CPA, CA
Manager, Tax Credits and Ministerial Issues
Business and Employment Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch