15 June 2011 External T.I. 2011-0401221E5 - Cosmetic procedures - Hair removal

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 severe and excessive hair growth as a result of a patient's Polycystic Ovarian Syndrome is precluded as a medical expense by virtue of subsection 1182(2.1).

Position: Question of fact, but in this case, since the procedures are a result of the medical condition of PCOS, they would appear to qualify as a medical expense if performed by a qualified medical practitioner.

Reasons: The hair removal procedures may qualify as an eligible medical expense since they appear to be necessary as a result of a medical condition and are therefore, not purely for cosmetic purposes.

XXXXXXXXXX 							2011-040122
								J. Gibbons, CGA
June 15, 2011

Re: Laser Hair Removal Procedures

We are writing in reply to your letter of March 31, 2011, wherein you inquire as to whether a procedure for laser hair removal is an eligible medical expense for the purposes of the medical expense tax credit ("METC").

According to your email, you were diagnosed XXXXXXXXXX with Polycystic Ovarian Syndrome ("PCOS") which have caused excessive hair growth on your face and neck. Your doctors have advised you that there is no medication to permanently remove the hair growth and suggested instead laser hair removal treatments.

Written confirmation of the tax consequences that apply to a particular fact situation is given by this Directorate only in the context of an advance income tax ruling request submitted in the manner set out in Information Circular 70-6R5, Advance Income Tax Rulings, dated May 17, 2002. This Information Circular and other CRA 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.

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 Income Tax Act (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 is considered to qualify as a medical expense for the purposes of the METC if it is paid to a medical practitioner, dentist or nurse or a public or licensed private hospital in respect of medical or dental services. Paragraph 118.4(2)(a) of the Act provides that where the reference to a medical practitioner, dentist or nurse (a "practitioner") is used in respect of a service rendered to an individual, that reference is to a person authorized to practice as such pursuant to the relevant provincial legislation to determine whether the particular practitioner is authorized under the laws of that province. Therefore, in order to determine whether a particular practitioner qualifies as such under the Act, one must look to the relevant provincial legislation whether the particular practitioner is authorized under the laws of that province. Thus, if a service is rendered in Ontario, the practitioner must be authorized to practice as such pursuant to the laws of Ontario. Your letter did not identify whether a medical practitioner, as contemplated under paragraph 118.2(2)(a), would perform the laser hair removal procedures.

Pursuant to subsection 118.2(2.1) of the Act, a medical expense does not include amounts paid for medical or dental services, nor any related expenses, provided purely for cosmetic purposes, unless necessary for medical or reconstructive purposes. The CRA has posted on its web site some examples of procedures that will generally be ineligible as medical expenses for purposes of the METC.

A cosmetic procedure will continue to qualify for the METC if it is required for medical or reconstructive purposes, such as surgery to ameliorate a deformity arising from, or directly related to, a congenital abnormality, a personal injury resulting from an accident or trauma, or a disfiguring disease.

It is a question of fact whether or not a medical or dental service is provided purely for cosmetic purposes and whether or not it is necessary for medical or reconstructive purposes. The determination in a particular situation would be based on consideration of all the relevant facts and supporting documentation. This may include consideration of an opinion of a qualified medical practitioner describing the nature and purpose of the procedure in sufficient detail in order to be able to make a determination.

In our view, procedures to treat PCOS would generally be considered to have a medical or reconstructive purpose. Therefore, such procedures may qualify as eligible medical expenses if all the conditions under paragraph 118.2(2)(a) are also met.

Yours truly,

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