Private ruling: Tax offset for medical expenses
Published: September 2012
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Are you entitled to a medical expenses tax offset for medical expenses incurred overseas? | A1: Yes

Relevant facts and circumstances: You are an Australian resident. You travelled overseas to receive medical treatment. The overseas treatment was administered by a legally qualified medical practitioner. You paid for the medical expenses and these expenses were not available for reimbursement by Medicare or from any other source.

Relevant legislative provisions: Income Tax Assessment Act 1936 subsection 159P(3A) | Income Tax Assessment Act 1936 subsection 159P(4)(a)

Reasons for decision: Summary: Subsection 159P(3A) of the Income Tax Assessment Act 1936 (ITAA 1936) provides that a tax offset is allowable to a taxpayer whose net medical expenses in the year of income exceeds the threshold dollar amount specified in subsection 159P(3A). The definition of medical expenses in subsection 159P(4)(a)of the ITAA 1936 includes payments made to a legally qualified medical practitioner in respect of an illness or operation, but does not include payments in respect of a cosmetic operation. To qualify for the tax offset, 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 are paid in Australia. In the 2011-12 income year a tax offset is available to resident taxpayers under section 159P(3A) where their net medical expenses paid in the year of income exceeds $2,000, and the tax offset is calculated as 20% of the net medical expenses over $2,000. In your case, you received treatment for your medical condition overseas which was administered by a legally qualified medical practitioner and is not considered a cosmetic operation. Therefore, the costs are eligible medical expenses for medical tax offset purposes and you are entitled to include the cost of the treatment as expenses when calculating a medical tax offset.

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