18 August 1995 External T.I. 9511345 - DRUGS AS A QUALIFYING MEDICAL EXPENSE

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.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues:

Whether various medicinal and like preparations that are dispensed by naturopathic practitioners qualify as medical expenses for tax credit purposes.

Position TAKEN:

In order to qualify as a medical expense under 118.2(2)(n) the drugs must be prescribed by a medical practitioner and purchased from a pharmacist who records the prescription. Some of the preparations may qualify under 118.2(2)(a), however, it will be a question of fact on a case by case basis.

Reasons FOR POSITION TAKEN:

Many of the preparations are not drugs or are unusual drugs which are dispensed directly to the patient by the medical practitioner.

L. Barrows
XXXXXXXXXX		951134

August 18, 1995

Dear XXXXXXXXXX:

Re: Qualifying Medical Expenses

Mr. A. Allen of the Toronto Tax Services office has referred your question concerning the above subject to this division for a written response.

We understand your question relates to the qualification of various medicinal and like preparations that are dispensed by naturopathic practitioners as medical expenses for tax credit purposes. It is also our understanding that these preparations (drugs, herbs and vitamins) are, in many cases, unusual and not available by prescription from a licensed pharmacist.

In order for drugs, medicaments and other preparations to qualify as a medical expense under paragraph 118.2(2)(n) of the Income Tax Act (the Act), they must be:

- prescribed by a medical practitioner and recorded as such by a pharmacist; and

- manufactured, sold or represented for use in:

a) restoring, correcting or modifying an organic function;

b) diagnosing, treating or preventing a disease, disorder or abnormal physical state; or

c) treating the symptoms of a disease, disorder or abnormal physical state.

Only substances mentioned in paragraph 118.2(2)(k) (insulin, oxygen, liver extract and vitamin B12) which are prescribed by a medical practitioner may be obtained from a pharmacy or other type of store without a written prescription.

Certain preparations or substances incidental to the treatment of a condition or illness may be included in the account of a medical practitioner or hospital as part of the fee charged for medical services. This fee may qualify as a medical expense under paragraph 118.2(2)(a) of the Act only to the extent that the fee is for diagnostic, therapeutic or rehabilitative services. It will therefore be a question of fact in a particular case (ie. type of service provided and amount and relevance of drug preparations to the medical service provided) if payments to a medical practitioner for these preparations and related services will qualify as a medical expense. In this regard, the Toronto Tax Services office is available to answer any specific questions you may have on a case by case basis.

We trust these comments will be helpful; however, please do not hesitate to contact us if we can be of further assistance.

Yours truly,

P.D. Fuoco
for Director
Business and General Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch

C.C.: A. Allen, Toronto Centre Tax Services