2 June 1999 Internal T.I. 9908997 - MEDICAL EXPENSE - SHARK TREATMENT IN MEXICO

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.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues: Whether the cost of a trip to Mexico for a medical treatment using shark fins and cartilage qualifies as a medical expense.

Position: Question of fact.

Reasons: The cost can likely be broken down into three separate items: (1) a payment to a licensed medical clinic; (2) the cost of shark fins and cartilage and (3) travel expenses. (1) Where fees for medical treatments are paid to a private clinic, the fees would not qualify as a medical expense under paragraph 118.2(2)(a) of the Act unless the clinic qualified as a “licensed private hospital.” Whether a particular clinic is a licensed private hospital is a question of fact, which can only be determined after reviewing the relevant documentation and related legislation. (2) In general terms, the cost of shark fins and cartilage used in a medical procedure would qualify as a medical expense under paragraph 118.2(2)(n) if the use of these substances by the patient is prescribed by a medical practitioner (see paragraph 4 of IT-519R2) and if they are dispensed by a licensed pharmacist who records the prescription and issues a proper receipt. (3) Paragraph 118.2(2)(h) provides for the inclusion of certain travel expenses as medical expenses. The travel expenses must have been incurred in travelling to a place to obtain medical services for a patient who is the taxpayer, his spouse or a dependant, 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. The travel expenses must be reasonable in amount and it must be reasonable, having regard to the circumstances, for the patient to travel to that particular place to obtain the medical services. Further, the patient must have travelled not less than 80 kilometres, in a reasonably direct route, to obtain the medical services and substantially equivalent services must not have been available in the locality where the patient dwells. It is our view that the taxpayer must have had an existing medical condition or illness and the services must have been performed by health professionals or related institutions. While there is no requirement that the health professional or related institution be licensed, it is our view that this would generally be the case.

		June 2, 1999

	XXXXXXXXXX  Tax Services Office	HEADQUARTERS
	Client Services	J. Gibbons
(613) 957-8953
	Attention: XXXXXXXXXX
		7-990899

Medical Expenses

This is in response to your memorandum of March 23, 1999, in which you requested our views on whether any part of a taxpayer’s cost of obtaining cancer treatment in Mexico, which involved shark fins and cartilage, will qualify as a medical expense for the purposes of the medical expense tax credit in subsection 118.2(1) of the Act. You state that the treatment is performed by licensed doctors at a licensed medical clinic. In the situation you describe, there is no conventional treatment in Canada for the taxpayer’s particular cancer.

You mention in your memorandum that the cost of the trip to Mexico for treatment and the treatment itself totalled approximately $XXXXXXXXXX \. For discussion purposes, we have presumed that this total is made up of three separate items: (1) a payment to a licensed medical clinic; (2) the cost of shark fins and cartilage and (3) travel expenses. If the taxpayer has not provided a breakdown of the medical expenses, you will have to obtain this information since each item has different statutory requirements.

In your memorandum, you question whether our earlier opinion of October 2, 1997 (our reference 7-971189) on chelation treatments would also apply in this case. In that opinion, we indicated that, where fees for chelation treatments are paid to a private clinic, the fees would not qualify as a medical expense under paragraph 118.2(2)(a) of the Act unless the clinic qualified as a “licensed private hospital.” Whether a particular clinic is a licensed private hospital is a question of fact, which can only be determined after reviewing the relevant documentation and related legislation. Likewise, in this case, you must determine whether the taxpayer’s payment (referred to in (1) above) to a licensed medical clinic (in Mexico) constitutes a payment to a licensed private hospital for medical services.

In general terms, the cost of shark fins and cartilage (referred to in 2 above) used in a medical procedure would qualify as a medical expense under paragraph 118.2(2)(n) if the use of these substances by the patient is prescribed by a medical practitioner (see paragraph 4 of IT-519R2) and if they are dispensed by a licensed pharmacist who records the prescription and issues a proper receipt.

As regards travel expenses (referred to in (3) above), paragraph 118.2(2)(h) provides for the inclusion of certain travel expenses as medical expenses. The travel expenses must have been incurred in travelling to a place to obtain medical services for a patient who is the taxpayer, his spouse or a dependant, 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. The travel expenses must be reasonable in amount and it must be reasonable, having regard to the circumstances, for the patient to travel to that particular place to obtain the medical services. Further, the patient must have travelled not less than 80 kilometres, in a reasonably direct route, to obtain the medical services and substantially equivalent services must not have been available in the locality where the patient dwells. Although it is a question of fact whether a taxpayer has obtained medical services at a particular place, it is our view that the taxpayer must have had an existing medical condition or illness and the services must have been performed by one or more of persons who are health professionals or health institutions. While there is no requirement that the health professional or health institution be licensed, it is our view that this would generally be the case.

J.F. Oulton, CA
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch

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