Private ruling: Medical expenses tax offset
Published: August 2012
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Do the costs of the dental work performed on your teeth qualify as eligible medical expenses for the purposes of the medical expenses tax offset? | A1: Yes.

Relevant facts and circumstances: You have undergone an extensive dental procedure that was performed by a legally qualified dentist. Clinical examination found that some of your teeth have a weak tooth structure which was affected by previous dental work. The dental procedure was strongly recommended to protect the remaining tooth structure and prevent future damage.

Relevant legislative provisions: Income Tax Assessment Act 1936 Section 159P.

Reasons for decision: Summary: A medical expenses tax offset is available to a taxpayer under section 159P of the Income Tax Assessment Act 1936 (ITAA 1936) where the taxpayer incurs medical expenses in an income year for themselves or a dependant who is an Australian resident. The medical expenses tax offset is 20% of the amount by which the net medical expenses exceed $2,060 for the 2011-12 income year. Net medical expenses are the medical expenses a taxpayer has paid less any refunds they received, or could have received, from Medicare or a private health fund. Subsection 159P(4) of the ITAA 1936 defines medical expenses which are eligible for the medical expenses tax offset and includes payments made to a legally qualified dentist for dental services or treatment or the supply, alteration or repair of artificial teeth. Dental services or treatment which are performed solely for cosmetic reasons are ineligible medical expenses and are not included in the calculation of the offset. A cosmetic dental service or treatment is one which beautifies or changes a person's appearance and is designed to effect a superficial alteration while keeping the basis unchanged. In your case, you have had extensive dental work performed on your teeth that were in poor condition. It is considered that whilst some of the dental work may have had a cosmetic effect, the treatment you received was primarily concerned with the correction of a dental problem and was not conducted solely for cosmetic reasons. Accordingly you are entitled to include the costs of the dental treatment in the calculation of your medical expenses tax offset.

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