2015-0589741E5 International in-vitro fertilization (IVF

Principal Issues: Whether the cost of IVF performed overseas and related travel costs would be eligible medical expenses for a male taxpayer.

Position: Medical and diagnostic services in relation to IVF for services provided to the taxpayer would be eligible medical expenses provided that they are prescribed by a medical practitioner. Transportation costs and reasonable travel expenses qualify only if all of the conditions under 118.2(g) and (h) are met.

Reasons: The wording in 118.2(2)

Author: El-Kadi, Randa
Section: 118.2

XXXXXXXXXX                                2015-058974
                                                        Randa El-Kadi

October 9, 2015

Dear XXXXXXXXXX:

Re: International in-vitro fertilization

This is in response to your email of May 14, 2015, in which you request our opinion as to whether the cost of in-vitro fertilization (“IVF”) performed overseas would be an eligible medical expense for purposes of the medical expense tax credit (“METC”).

You indicated that you are physically unable to produce healthy eggs and to bear children. You also stated that you and your husband are considering IVF (using donated eggs) and a surrogacy arrangement overseas due to the expense of the procedures and surrogacy laws in Canada.

In a telephone conversation on June 15, 2015 (XXXXXXXXXX/El-Kadi), you stated that your question was specific to the eligibility of expenses that your husband would be paying in relation to medical services provided to him, such as diagnostic/genetic tests and other IVF-related procedures. You also enquired about the eligibility of your husband’s travel expenses. 

Our Comments

This technical interpretation provides general comments about the provisions of the Income Tax Act (“Act”) and related legislation (where referenced). 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 IC 70-6R6, Advance Income Tax Rulings and Technical Interpretations.

This technical interpretation should be read in conjunction with the comments in our letter to you, dated April 14, 2015 (technical interpretation E 2015-0572891E5).

The Canada Revenue Agency’s (“CRA”) general views regarding the METC are contained in Income Tax Folio S1-F1-C1, Medical Expense Tax Credit (the “Folio”). As paragraphs 1.128 and 1.130 of the Folio indicate, generally, the cost of IVF would be an eligible medical expense provided that the IVF procedure is prescribed by a medical practitioner. When these paragraphs are read in the context of the whole Folio, it is understood that IVF-related expenses must be paid for medical or diagnostic services provided to the individual claiming the METC (or to the individual’s spouse or common-law partner, as applicable) to qualify as medical expenses.

An individual who must travel to obtain eligible medical services may be able to claim reasonable transportation and travel expenses as described in paragraphs 1.64 to 1.72 of the Folio. As such, an individual may be entitled to claim transportation and travel expenses if the following requirements are met:

i.    substantially equivalent medical services are not available in the individual’s locality;

ii.   a reasonably direct travelling route is taken by the individual; and

iii.  the individual travels to the particular place to obtain medical services for him or herself and it is reasonable, having regard to the circumstances, for the individual to travel to that place for medical services.

Reasonable travel expenses (including meals and accommodation) may be considered eligible medical expenses if they are incurred during the time that the individual is receiving medical services and provided that it is reasonable in the circumstances for the individual to remain at the place where he or she is receiving the medical services. It is a question of fact whether the requirements in (i) to (iii) above are met in any situation.

Additionally, as noted in paragraph 1.16 of the Folio, qualifying medical expenses of an individual do not include any expense for which the individual or certain other persons are entitled to be reimbursed (for example under a public or private medical or hospitalization plan), except to the extent that the amount of the reimbursement is required to be included in income.

We trust that these comments will be of assistance.

Yours truly,

Pamela Burnley, CPA, CA
Tax Credits and Ministerial Issues
Business and Employment Division
Income Tax Rulings Directorate

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