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Edited version of your private ruling
Authorisation Number: 1012539830312
Ruling
Subject: net medical expenses tax offset
Question
Are medical expenses incurred in respect of an illness by an Australian resident, but paid to a medical practitioner located overseas, eligible medical expenses for the purposes of the net medical expenses tax offset?
Answer
Yes
This ruling applies for the following period:
Year ended 30 June 2013
The scheme commences on:
1 July 2012
Relevant facts and circumstances
You are currently receiving treatment for an illness.
This treatment is being performed by both a legally qualified doctor located in Australia and a legally qualified doctor located overseas.
You have incurred medical expenses relating to your treatment which have been paid to the clinic located overseas.
Relevant legislative provisions
Income Tax Assessment Act 1936 Section 159P
Reasons for decision
A medical expenses tax offset is available under section 159P of the Income Tax Assessment Act 1936 (ITAA 1936). To qualify for the rebate, the medical expenses must be paid by a resident taxpayer in respect of themselves or a resident dependant. However, it is not necessary that the payments be made to a resident of Australia or that they be paid in Australia. Therefore, medical expenses paid during an overseas trip may be included in the calculation of the tax offset.
Accordingly, you may be entitled to a medical expenses offset if the expenses are medical expenses for the purposes of section 159P of the ITAA 1936.
The term "medical expenses" is defined in subsection 159P(4) of the ITAA1936.
Paragraph 159P(4)(a) of the ITAA 1936 provides that payments to a legally qualified medical practitioner, nurse or hospital in respect of an illness or operation are 'medical expenses'.
Paragraph 159P(4)(d) of the ITAA 1936 provides that payments for therapeutic treatment administered by direction of a legally qualified medical practitioner are also 'medical expenses'.
The condition you are receiving treatment for is considered an illness in accordance with Taxation Ruling IT 2359.