25 June 2010 External T.I. 2010-0361011E5 - METC - gym membership and weight-loss clinic

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: 1- Whether a gym membership is an eligible medical expense. 2- Whether fees for a weight-loss clinic are an eligible medical expense.

Position: 1- No. 2- Maybe.

Reasons: 1- No provision qualifies a gym membership as an eligible medical expense. 2- May qualify under 118.2(2)(a).

XXXXXXXXXX 

									2010-036101
									C. Tzortzis
June 25, 2010

Dear XXXXXXXXXX :

Re: Gym Membership and Weight-Loss Clinic as Medical Expenses

We are writing in reply to your fax dated March 18, 2010, wherein you inquire whether the costs for a gym membership incurred to maintain health due to a previous work injury and fees for a weight-loss clinic incurred for the treatment of obesity are eligible medical expenses for the purposes of the medical expense tax credit ("METC"). Specifically, you are enquiring whether such costs are eligible for the METC pursuant to paragraph 118.2(2)(o) of the Income Tax Act ("Act") as they have been prescribed by a doctor. You also state in your fax that neither individual is eligible for the disability tax credit pursuant to section 118.3 of 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 a request for an advance income tax ruling submitted in the manner set out in Information Circular 70-6R5, Advanced Income Tax Rulings, dated May 17, 2002. This Information Circular and other Canada Revenue Agency publications can be accessed on the internet at http://www.cra-arc.gc.ca. Although we cannot comment on your specific situations, 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 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.

Paragraph 118.2(2)(o) of the Act allows as an eligible medical expense amounts paid for laboratory, radiological or other diagnostic procedures or services prescribed for a patient by a medical practitioner or dentist. Under this provision, the diagnostic procedures or services (together with the necessary interpretations) must be for maintaining health, preventing disease or assisting in the diagnosis or treatment of any injury, illness or disability. The reference to "other diagnostic procedures or services" is generally limited to diagnostic services or procedures of the same class as laboratory or radiological services. In other words, the procedures or services must assist a medical practitioner in making a diagnosis and formulating a course of treatment.

As a gym membership would not normally have a diagnostic purpose, such an expense would not qualify as a medical expense under paragraph 118.2(2)(o). Further, on page 13 of CRA Guide RC4064, Medical and Disability-Related Information, athletic or fitness club fees are listed as non-eligible for the METC. This publication is available on the CRA Web site at www.cra-arc.gc.ca.

Similarly, fees paid to a weight-loss clinic would not qualify as a medical expense under paragraph 118.2(2)(o) unless such fees are paid for a procedure or service of a diagnostic nature and the other conditions in the provision are met. However, fees for a weight-loss clinic may qualify under paragraph 118.2(2)(a) of the Act if all the conditions of that provision are met.

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. In general terms, a "medical practitioner" is a person who is authorized by a province or other jurisdiction to act as a medical practitioner. In our view, a person is authorized by a province or other jurisdiction to act as a medical practitioner if there is specific legislation that enables, permits or empowers the person to practice as such.

An amount paid by an individual in respect of a "medical service" provided by a licensed medical practitioner would qualify as a medical expense eligible for the METC where the amount is paid directly to the medical practitioner or to a corporation that employs the medical practitioner. A "medical service" is a service relating to the diagnosis, treatment or prevention of disease performed by a medical practitioner acting within the scope of his or her professional training. In our view, a weight-loss program would be considered a medical service when the program is offered to an individual for therapeutic or rehabilitative reasons. Accordingly, in our view, fees paid to a weight-loss clinic by an individual in respect of a weight-loss program for the treatment of obesity would qualify for the METC where the services are provided by a medical practitioner who is so authorized to act as such in the province in which the services are rendered.

Further information on medical expenses may be found in Interpretation Bulletin IT-519R2 (Consolidated), Medical Expense and Disability Tax Credits and Attendant Care Expense Deduction, which is posted on the CRA Web site at www.cra-arc.gc.ca.

We trust that 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