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Edited version of private ruling
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Ruling
Subject: Medical expense Tax Offset
Are you entitled to a medical expenses tax offset for the expenses relating to IVF treatment overseas?
Yes.
This ruling applies for the following period:
Year ending 30 June 2010
The scheme commences on:
1 July 2009
Relevant facts and circumstances
You and your spouse are Australian residents for tax purposes.
You had multiple IVF failures in Australia and sought treatment overseas.
The treatment was performed by a legally qualified medical practitioner at an overseas medical clinic.
You incurred expenses with regards to specialist fees, treatment, medication and blood tests.
You have provided copies of invoices and proof of payments for all the expenses.
Your medication was authorised by your doctor and purchased from pharmacies overseas.
You have not been reimbursed any amounts from a private health fund or Medicare.
You have paid net medical expenses exceeding $1,500 for the 2009-10 income year.
Summary
The costs of your IVF treatment qualifies as medical expenses for the purposes of the medical expenses tax offset under section 159P of the Income Tax Assessment Act 1936 (ITAA 1936).
Detailed reasoning
Section 159P of the ITAA 1936 provides that a tax offset is allowable to a taxpayer whose net medical expenses (that is, medical expenses less any amount paid or payable by Medicare or any other fund) in the year of income exceed a certain threshold.
For the year ended 30 June 2010, the amount of the tax offset is 20% of the excess of net medical expenses over the threshold of $1,500.
To qualify for the tax offset, the medical expenses must be paid by a taxpayer who is an Australian resident, in respect of themselves, or in respect of a resident dependant. Where the invoice is invoiced to a spouse, however the expense is paid by you, the expense may still be considered for the offset under this provision.
The term medical expenses is defined in subsection 159P(4) of the ITAA 1936, and includes payments to a legally qualified medical practitioner, or a public or private hospital in respect of an illness or operation.
IT 2359 accepts that IVF procedures are procedures in respect of the illness of infertility, and that payments to a legally qualified medical practitioner or a hospital for treatment under an IVF program qualify as medical expenses under subsection 159P(4) of the ITAA 1936.
In your case, you have incurred expenses related to IVF treatment overseas. The expenses for specialist fees, medication and blood tests are considered to be costs of the treatment to overcome infertility.
You are using the IVF treatment program to overcome infertility. It is accepted that the IVF treatments you have received overseas is in respect of the long term treatment program of the illness of infertility.
The procedure was undertaken and blood tests organised by a legally qualified medical practitioner and medications were purchased from pharmacies overseas.
You have not received any reimbursement amount from your private health insurer or Medicare.
Taxation Rulings IT 261 and TR 93/14 provide guidance on payments to a hospital within the meaning of subsection 159P(4) of the ITAA 1936. These Rulings state that as the term 'hospital' is not defined it has its ordinary meaning, that is, an institution in which sick or injured persons are given medical or surgical treatment.
The clinic is where infertility is treated, and is considered to be a hospital as it is an institution in which provides medical or surgical treatment.
Therefore, you are entitled to the medical expenses offset under subsection 159(1) of the ITAA 1936 for expenses in relation to IVF treatment you have received.