Principal Issues: Whether cosmetic procedures to treat acne vulgaris are ineligible for the METC by virtue of subsection 118.2(2.1).
Position: Generally, cosmetic procedures to treat common acne would not qualify for the METC by virtue of subsection 118.2(2.1). However, procedures to treat acne that is severe, persistent and disfiguring would generally be considered to have a medical or reconstructive purpose and thus subsection 118.2(2.1) would not apply. Therefore, such procedures may qualify for the METC if all the conditions under paragraph 118.2(2)(a) are also met.
Reasons: Wording of provision. However, it is a question of fact whether or not a medical service is provided purely for cosmetic purposes and whether or not it is necessary for medical or reconstructive purposes.
XXXXXXXXXX 2011-041259 Chrys Tzortzis, CA September 27, 2011
Dear XXXXXXXXXX :
Re: Eligible medical expense
We are writing in reply to your letter of June 8, 2011, wherein you inquire as to whether an amount paid to a dermatologist for the treatment of acne vulgaris (which is the medical term for common acne) is an eligible medical expense for the purposes of the medical expense tax credit ("METC"). Your inquiry is in reference to your daughter who is under the age of 18 years and was diagnosed by the dermatologist with extensive comedonel acne.
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. Since your inquiry concerns an actual situation involving questions of fact, it should be dealt with by your local tax services office. If you wish to have the CRA review your actual situation, you should submit all of the relevant information and documentation to the particular tax services office serving your area, a list of which 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.
Medical expenses which are eligible for the METC are limited to those described in subsection 118.2(2) of the Income Tax Act (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 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 laws of the jurisdiction in which the service is rendered. Therefore, in order to determine whether a particular practitioner qualifies as such under the Act, one must look to the relevant provincial legislation to determine whether the particular practitioner is authorized under the laws of that province. It is our understanding that dermatologists are medical doctors recognized as such throughout Canada and, therefore, are medical practitioners for purposes of paragraph 118.2(2)(a) of the Act.
However, 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 and the examples include chemical peels and laser treatments (skin resurfacing and removal of age spots). However, a cosmetic procedure will continue to qualify for the METC if it is required for medical or reconstructive purposes. Examples of procedures that would generally be considered to have a medical or reconstructive purpose include those that would 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.
In our view, cosmetic procedures to treat common acne would generally not qualify for the METC by virtue of subsection 118.2(2.1). However, cosmetic procedures to treat acne that is severe, persistent and disfiguring 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