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 cost of: (1) An in-vitro fertilization process performed outside Canada qualify as medical expenses, and whether (2) The related travel costs for an in-vitro fertilization performed outside Canada qualify as medical expenses.
Position: (1) Yes (2) Yes if the conditions of paragraph 118.2(2)(g)(v) are met.
Reasons: (1) Amounts paid to a medical practitioner or a licensed hospital qualify as a medical expense under paragraph 118.2(2)(a) of the Act. (2) Transportation expense to travel not less than 40 km to obtain medical services qualify under paragraph 118.2(2)(g) of the Act and other travel expenses qualify under paragraph 118.2(2)(h) of the Act if the individual travels not less than 80 km to obtain medical services and it is reasonable for the individual to have done so, the route taken was reasonably direct and substantially equivalent medical services were not available in the individual's locality.
XXXXXXXXXX 2011-039695
S. D'Angelo
March 9, 2011
Dear XXXXXXXXXX :
Re: In-Vitro Fertilization and Travel Expenses
This is in response to your correspondence of February 22, 2011 with regard to whether various amounts paid for an in-vitro fertilization ("IVF") process and related travel expenses qualify as medical expenses for purpose of the medical expense tax credit ("METC").
You and your wife decided to travel to Japan for an IVF procedure since due to your wife's age (39 years old) and long waiting periods locally, local IVF procedures may not have been a viable option. You have indicated that your wife's medical insurance covered a portion of the medical procedures and are asking whether the remaining portion of medical expenses and related travel costs incurred would qualify as medical expenses for purposes of the METC.
The situation outlined in your letter appears to relate to a factual one, involving a specific taxpayer. Should your situation involve a specific taxpayer and a completed transaction, you should submit all relevant facts and documentation to the appropriate Tax Services Office ("TSO") for their views. A list of TSOs is available on the "Contact Us" page of the CRA website. Although we cannot comment on your specific situation, we are prepared to provide the following general comments, which may be of assistance.
Our comments
Section 118.2 of the Income Tax Act (the "Act") provides rules for determining the amount that may be claimed, as a tax credit, in respect of medical expenses. Subsection 118.2(2) of the Act contains a list of expenditures that qualify as medical expenses. The CRA's views with respect to medical expenses are outlined in Interpretation Bulletin, IT-519R2 (Consolidated), "Medical Expense and Disability Tax Credits and Attendant Care Expense Deduction" ("IT-519R2").
As stated in paragraph 11 of IT-519R2, in order to qualify for the METC, the medical expenses must have been paid or deemed to have been paid and must not have been reimbursed or be reimbursable by a provincial or private health insurance plan. Paragraph 12 of IT-519R2 indicates that qualifying medical expenses can be in respect of amounts paid to persons or for services received either within, or outside of Canada.
Paragraph 118.2(2)(a) allows an individual to include, as a qualifying medical expense, an amount paid to a medical practitioner, dentist or nurse or a public or licensed private hospital for medical or dental services provided to the patient. The term "medical practitioner" includes a medical doctor, dentist, pharmacist, nurse or optometrist provided that he or she is authorized to practice in the stated profession according to the laws of the jurisdiction in which the service is rendered, whereas "licensed private hospital" means licensed by the jurisdiction in which the hospital operates.
Paragraph 118.2(2)(n) provides that for the purposes of subsection 118.2(1), a medical expense of an individual is an amount paid "for drugs, medicaments or other preparations or substances (other than those described in paragraph (k)) manufactured, sold or represented for use in the diagnosis, treatment or prevention of a disease, disorder, abnormal physical state, or the symptoms thereof or in restoring, correcting or modifying an organic function, purchased for use by the patient as prescribed by a medical practitioner or dentist and as recorded by a pharmacist".
In addition, pursuant to paragraph 118.2(2)(o), qualifying medical expenses include amounts paid for laboratory, radiological or other diagnostic procedures or services, with necessary interpretations, for maintaining health, preventing disease or assisting in the diagnosis or treatment of an injury, illness, or disability as prescribed by a medical practitioner. Paragraph 59 of IT-519R2 states:
"An example of such expenses, which may not be covered by provincial health insurance, are the following expenses involved with artificial insemination:
(a) the in-vitro fertilization procedure;
(b) daily ultrasound and blood tests once the in-vitro procedure has begun;
(c) anaesthetist fees; and
(d) cycle monitoring fees."
It is our view that, based on the information provided, the cost of the IVF procedures incurred appear to qualify as medical expenses for purposes of the METC, provided that the above conditions are met.
Travel Expenses
An amount paid to a person engaged in the business of providing transportation services to transport an individual not less than 40 kilometres from the locality where the individual resides to a place where medical services are received may qualify as a medical expense under paragraph 118.2(2)(g) of the Act. Also, other travel expenses (e.g. amounts expended for meals and accommodation for a patient and, where an individual has been certified as being incapable of travelling alone, for an accompanying individual) qualify for the METC under paragraph 118.2(2)(h) of the Act if the individual travels not less than 80 kilometres from the locality where the individual dwells to a place where medical services are received. An individual is entitled to claim transportation and travel expenses only if the following requirements are met:
(i) substantially equivalent medical services were not available in the individual's locality,
(ii) a reasonably direct travelling route was taken by the individual, and
(iii) the individual travelled to the particular place to obtain medical services for him or herself and it is reasonable, having regard to the circumstances, for the individual to have travelled to that place for medical services.
While it is a question of fact whether the above requirements are met, it is our view that the requirement in (iii) may be met even if medical services are available nearer to the individual's locality if, in the circumstances, it is reasonable for the individual to have travelled to the place where the medical services were obtained.
It is our view, based on the information provided, the travel costs incurred for the IVF procedure outside of Canada, likely qualify as medical expenses for purposes of the METC.
We trust our 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
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