4 May 2021 External T.I. 2020-0853361E5 F - Frais d'asepsie / asepsis fees
Principal Issues: Are fees paid to a dentist for asepsis deductible in computing income?
Position: No, but they may qualify for a medical expense credit depending on the circumstances.
Reasons: Question of fact.
XXXXXXXXXX 2020-085336 M-Christine Torchio
May 4, 2021
Dear Madam,
Subject: Fees for asepsis (covid tax) paid to a dentist
Mr. Geoff Trueman, Deputy Commissioner of the Legislative Policy and Regulatory Affairs Branch of the Canada Revenue Agency, has asked me to respond to your email received from the office of the Honourable Diane Lebouthillier, Minister of National Revenue, in which you asked whether the fees for asepsis, colloquially referred to as the COVID tax, that you paid to a dentist are deductible in calculating your income
All statutory references herein are to the provisions of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) (the "Act").
Our comments
This technical interpretation provides general comments about the provisions of the Act and related legislation. It does not confirm the income tax treatment of a particular situation involving a specific taxpayer but is intended to assist you in making that determination. The income tax treatment of particular transactions proposed by a specific taxpayer will only be confirmed by this Directorate in the context of an advance income tax ruling request submitted in the manner set out in Information Circular IC70-6R11, Advance Income Tax Rulings and Technical Interpretations.
According to the information you have provided, you have paid a dentist for asepsis in the oral examination and treatment of your children's cavities for which you have not been reimbursed. Briefly explained, asepsis is the set of procedures that prevent infection. It includes, among other things, personal protective equipment (gloves, mask, protective glasses, lab coat, etc.), cleaning, disinfection and sterilization. We understand that in this time of pandemic, many health professionals have had to implement additional asepsis to ensure the health and safety of their patients and staff.
For the purposes of the Act, fees paid to a dentist for dental care provided to an individual, the individual’s spouse or common-law partner or a dependant are not deductible in computing income. However, such expenses may, under certain conditions, qualify for a medical expense tax credit ("METC"). Among these conditions, the expenses must qualify as eligible medical expenses under subsection 118.2(2). The METC is a non-refundable credit and reduces the tax payable.
In short, an individual's eligible medical expenses include fees paid to a dentist for dental services provided to the individual, the individual's spouse or common-law partner, or a dependant of the individual, in the taxation year in which the fees were incurred. Since these services cannot be provided without asepsis, we are of the view that fees paid for asepsis in the course of an oral examination and treatment of cavities are eligible medical expenses since they were paid for dental services that were not performed purely for cosmetic purposes.
For more information on the requirements for claiming an METC, see Guide RC4065, Medical Expenses available at canada.ca/en/revenue-agency/services/forms-publications/publications/rc4065 or Income Tax Folio S1-F1-C1, Medical Expense Tax Credit available at canada.ca/en/revenue-agency/services/tax/technical-information/income-tax/income-tax-folios-index/series-1-individuals/folio-1-health-medical/income-tax-folio-s1-f1-c1-medical-expense-tax-credit.html.
In addition, if you have incurred significant eligible medical expenses, you may be entitled to a refundable tax credit known as the refundable medical expense supplement. More details are available in Guide RC4065 and in paragraphs 1.148 to 1.153 of Folio S1-F1-C1.
We hope that these comments are of assistance.
Best regards,
Nancy Deslandes, CPA, CGA, D. Fisc
Manager
Business and Employment Income Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch