2019-0812161E5 Pulsed electromagnetic field therapy devices

Principal Issues: The taxpayer's request seeks a) clarifications regarding technical interpretation 2019-079898; and b) the support of the Income Tax Rulings Directorate for the purpose of requesting that a new category of devices eligible for the medical expense tax credit be added to section 5700 of the Income Tax Regulations.

Position: a) Clarifications provided; and b) The Income Tax Rulings Directorate is not in a position to support requests from taxpayers seeking changes to tax policy from the Department of Finance Canada.

Reasons: a) See response; b) the values and expected behaviours that guide public servants in general, and Canada Revenue Agency employees in specific, in all activities related to their professional duties - see the Canada Revenue Agency's Code of integrity and professional conduct (regarding impartiality) and the Values and Ethics Code for the Public Sector.

Author: El-Kadi, Randa
Section: Section 5700 of the Income Tax Regulations

XXXXXXXXXX                                                                                                                                       2019-081216
                                                                                                                                                               Randa El-Kadi
July 31, 2019

Re:  Adding a new category of eligible medical devices

Dear XXXXXXXXXX,

We are replying to your correspondence of May 21, 2019, wherein you seek clarification regarding technical interpretation 2019-079898, which we issued in response to a request we received to have pulsed electromagnetic field (PEMF) therapy devices added to the list of medical devices eligible for the medical expense tax credit.

In your correspondence, you recognize that any proposal to change that list will be a change in tax policy and therefore, will be the responsibility of the Department of Finance Canada. Nevertheless, you seem to ask whether the Income Tax Rulings Directorate of the Canada Revenue Agency would be in a position to support a request for such a change. In your view, the health benefits of PEMF therapy and the demand for PEMF devices would warrant the creation of a new category of devices in section 5700 of the Income Tax Regulations (the Regulations).

Our comments:

Technical interpretation 2019-079898

In reaching the conclusions in technical interpretation 2019-079898, we have considered all the provisions in subsection 118.2(2) of the Income Tax Act and in section 5700 of the Regulations. We determined that paragraph 5700(v) of the Regulations was the only provision that applied to electromagnetic therapy devices.

You asked that we clarify the meaning of paragraph 5700(v). To that effect, we interpret it as implying that the eligibility of electromagnetic therapy devices is limited to a specific use and purpose, that is, to stimulate the production of bone tissue in the treatment of non-union fractures or in helping with bone fusion.

We realize that PEMF devices do not fall under the ambit of paragraph 5700(z.2) of the Regulations, which is specific to electrotherapy devices. The only reason we had referred to that provision in our technical interpretation was because the possibility of it applying to PEMF therapy devices XXXXXXXXXX.

Supporting requests that seek changes to tax policy

In terms of your request to meet with officials from the Income Tax Rulings Directorate and your suggestion that the Directorate support your request to have the Department of Finance amend the Regulations in favour of a new category for PEMF devices (without a specific use), we are not in a position to grant you such a request. As public servants, our mission is to serve in the public interest with impartiality. This entails performing, and being perceived to perform, our duties in an impartial manner, as well as acting in a manner that will bear the closest public scrutiny.

We thank you for reaching out to our Directorate and we trust our comments will be of assistance.

Yours truly,

Lita Krantz, CPA, CA
Manager
Tax Credits and Ministerial Issues
Business and Employment Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch

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