3 October 2011 External T.I. 2011-0411181E5 - medical expense - endovenous laser therapy

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 endovenous laser therapy for varicose veins would be considered cosmetic surgery?

Position: No.

Reasons: Based on information provided, it appears to be not purely cosmetic. EVLT treatment qualifies as a medical service as it relates to treatment for a medical condition, varicose veins.

XXXXXXXXXX 								2011-041118
									J. Gibbons, CGA
October 3, 2011

Dear XXXXXXXXXX :

Re: Endovenous Laser Therapy ("EVLT")

We are replying to your letter of June 22, 2011, concerning whether the cost of EVLT 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").

In particular, your question relates to EVLT as a treatment for symptomatic varicose veins, which is generally characterized by bulging, throbbing pain, swelling and discomfort. It is our understanding that in EVLT, an optical fiber is inserted into the vein to be treated, and then laser light, normally in the infrared portion of the spectrum, is shone into the interior of the vein. This causes the vein to contract, after which the optical fiber is slowly withdrawn. After the procedure, a patient is required to use compression stockings for the following three weeks. You are asking whether the cost of the EVLT procedure and the compression stockings are eligible medical expenses.

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.

Our Comments

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 otherwise 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 a medical or dental service, including any related expenses, which has been provided purely for cosmetic purposes unless it is necessary for medical or reconstructive purposes.

Based on the information provided, it is our view that the cost of the EVLT procedure paid to a medical practitioner, or to a public or licensed private hospital for a patient with symptomatic varicose veins would not be considered to be purely cosmetic and would qualify as an eligible medical expense under paragraph 118.2(2)(a) of the Act.

You have also asked whether the cost of compression stockings qualifies as a medical expense. Paragraph 39 of the current version of Interpretation Bulletin IT-519, Medical Expense and Disability Tax Credits and Attendant Care Expense Deduction, indicates that for purposes of the meaning of the phrase "brace for a limb" in paragraph 118.2(2)(i) of the Act, that phrase is considered to include "woven or elasticized stockings where these are of a kind that are carefully fitted to measurement or are made to measure." Therefore, if the compression stockings you refer to in your letter are of a kind described above, the cost would qualify as a medical expense.

We trust these comments will be of assistance.

Yours truly,

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