Principal Issues: Whether the cost of an executive medical in the form of a comprehensive health assessment or an executive health and lifestyle assessment is qualifying medical expenses for purposes of paragraph 118.2(2)(a)
Position: Yes, to the extent that services rendered under the executive medical was performed by a medical practitioner and the services relates to the diagnosis, treatment or prevention of disease
Reasons: The costs of health care services qualify as a medical expense for purposes of the medical expense tax credit if the services relate to the diagnosis, treatment or prevention of disease and the services are performed by a medical practitioner or nurse acting within the scope of their professional training.
D Tiu XXXXXXXXXX (613) 957-8961 2006-017583 May 29, 2006
XXXXXXXXXX:
Re: Executive Medical in a Private Clinic
We are writing in response to your March 13, 2006 inquiry on the above subject and our subsequent telephone discussion (XXXXXXXXXX/Tiu). You inquired whether the cost of an executive medical done in a private clinic would qualify as a medical expense for tax credit purposes under subsection 118.2(2) of the Income Tax Act (the "Act"). We understand that by executive medical, you are referring to XXXXXXXXXX.
Written confirmation of the tax consequences inherent in a particular transaction or series of transactions are given by this Directorate only where the transactions are proposed and are the subject matter of an advance ruling request submitted in the manner set out in Information Circular 70-6R5. In any event, a request cannot be considered for a ruling when the transactions are completed or where the issues involved are primarily questions of fact. Notwithstanding the foregoing, we are prepared to provide the following general comments.
Our Comments
Section 118.2 of the Act provides rules for determining the amount that may be claimed, as a tax credit, in respect of medical expenses. The credit applies to qualifying medical expenses, in excess of defined limits, incurred in any 12-month period ending in the taxation year.
Paragraph 118.2(2)(a) of the Act defines a medical expense to include an amount paid to a medical practitioner or nurse in respect of a medical service. A medical service is a service relating to the diagnosis, treatment or prevention of disease.
Subsection 118.4(2) of the Act states that a reference to a "medical practitioner" or a "nurse" is a reference to a person who is authorized to practice as such pursuant to the laws of the jurisdiction in which the service is rendered. Thus, a medical doctor would qualify as a medical practitioner.
In our view, the costs of health care services qualify as medical expenses for the purpose of the medical expense tax credit if the following two conditions are satisfied:
(a) the services relate to the diagnosis, treatment or prevention of disease; and
(b) the services are performed by a medical practitioner or nurse acting within the scope of their professional training.
The information to which you have referred us suggests that XXXXXXXXXX provides clients with a complete assessment of their current state of health and allows them to manage their future health needs. This assessment is personalized and gender-specific, and includes a series of sophisticated diagnostic tests. It also includes an extensive risk review of the client's medical history and lifestyle, and a detailed follow-up report.
Similarly, XXXXXXXXXX program is represented to be a comprehensive XXXXXXXXXX. This preventive service includes a medical examination by a specialized XXXXXXXXXX physician, as well as a range of procedures to evaluate cancer and cardiac risk, assess vision, hearing and lung functions, and evaluate lifestyle factors such as exercise, diet, stress and smoking.
Accordingly, if the service providers involved in a comprehensive assessment described above are medical practitioners or nurses, it is our view that the entire cost of the assessment would qualify for the medical expense tax credit. However, if any of the service providers involved in an assessment (excluding necessary clerical staff) are not medical practitioners or nurses, that portion of the cost of the assessment attributable to that service provider would not qualify for the medical expense tax credit.
For instance, both service providers to whom you referred us mentioned the services of a nutritionist. A nutritionist is a medical practitioner only if authorized to practice pursuant to the laws of the jurisdiction in which services are rendered. For instance, while we are aware that there is Ontario legislation regulating the profession of dietetics (a dietician) such that a member of the College of Dietitians of Ontario would be a medical practitioner for purposes of the Act, we are not aware of the legislation, if any, applicable to nutritionists in Ontario or elsewhere in Canada.
We hope that this information will be of assistance to you.
Yours truly,
Robin Maley
Section Manager
For Division Director
Business and Partnerships Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch