6 October 2011 External T.I. 2011-0411641E5 - medical expense -cosmetic procedure

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 infant male circumcision is considered to be purely cosmetic in nature.

Position: Question of fact.

Reasons: Onus is on taxpayer to obtain details and verification from medical practitioner explaining why procedure is not purely cosmetic in nature.

XXXXXXXXXX
									2011-041164
									J. Gibbons, CGA

October 6, 2011

Dear XXXXXXXXXX :

Re: Infant Male Circumcision

We are replying to your email of June 24, 2011, concerning whether the cost of infant male circumcision performed by a medical doctor would qualify as an eligible medical expense for purposes of the medical expense tax credit ("METC") under subsection 118.2(1) of the Income Tax Act (the "Act").

Written confirmation of the tax implications inherent in particular transactions is given by this Directorate only where the transactions are proposed and are the subject matter of an advance income tax ruling request submitted in the manner set out in Information Circular 70-6R5, Advance Income Tax Rulings. Nonetheless, we have provided an outline of the rules in the Act that may be relevant to your situation.

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 does not qualify for purposes of the METC, even though the expenditure may have been incurred for medical reasons.

Pursuant to paragraph 118.2(2)(a) of the Act, an amount paid by an individual to a medical practitioner, a dentist or a nurse (a "medical practitioner") or to a public or private licensed hospital for medical services is a qualifying medical expense for the METC. A medical practitioner must be authorized to practice their particular profession according to the laws of the jurisdiction in which the service is rendered, whereas a licensed private hospital means licensed by the jurisdiction in which the hospital operates. A list of authorized medical practitioners by province is listed on our website at http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns300-350/330/ampp-eng.html. A "medical service" means a service relating to the diagnosis, treatment or prevention of a disease or disorder performed by a medical practitioner acting within the scope of his or her professional training.

An amount qualifying under paragraph 118.2(2)(a) of the Act may be denied pursuant to subsection 118.2(2.1) of the Act if the service was provided purely for cosmetic purposes. In particular, this latter provision excludes from eligible medical expenses, an amount paid for medical or dental services, including any related expenses, which are provided purely for cosmetic purposes unless they are necessary for medical or reconstructive purposes.

It is a question of fact whether a particular service or procedure was provided purely for cosmetic purposes, and the onus is on the taxpayer to substantiate that a particular medical service is not subject to this provision. Thus, where a particular medical procedure or service is cosmetic in nature, taxpayers may wish to obtain a detailed description of the nature and purpose of the medical service from the authorized medical practitioner performing the service as a means of establishing that subsection 118.2(2.1) of the Act does not apply.

We trust these comments will be of assistance.

Yours truly,

G. Moore
for Director
Business and Partnerships Division
Income Tax Rulings Directorate