National Taxation Bureau of Kaohsiung, Ministry of Finance (NTBK) expressed that, recently, it received the inquiry from a taxpayer that, his mother is a patient with severe dementia who now lives in a private nursing home, with reference to intention of No. 701 interpretation from Judicial Yuan, may those paid care fees be claimed as itemized deduction when he/she file the tax of 2016 in May 2017?
NTBK interpreted that, the legislative intention of “Medical and childbirth expenses” in Point 3, Item 2, Subsection 2, Paragraph 1, Article 17 of the Income Act shall refer the medical expenses paid for the treatment of physical illness, they are necessary expenses in life and may be deducted. Considering the medical expenses for the patients receiving long-term health care (such as dementia, people in vegetable state, extremely severe chronic psychosis, long-term confined in bed due to stroke or other severe illness and so on), the nature of which is the necessary expenses for maintenance of survival; according to that article, if only the medical expenses paid to the public offices established according to the law or the contracted medical institutions based on the National Health Insurance may be claimed as the itemized deduction, but the medical expenses paid to other legal medical institutions other than the above public offices or medical institutions may not be claimed as itemized deductions, then it will be tantamount to negatively impacting the intention of equal protection of the right to life of those who receiving long-term cares. In order to rectify such differential treatment, on November 7 2012, based on the intention of No. 701 interpretation from Judicial Yuan on July 6 of the same year, the Ministry of Finance announced Order of Tai Tsai Shui Zi No. 10100176690, that the medical expenses which may be claimed as itemized deductions previously limited to those paid to the public hospital, contracted medical institutions based on the National Health Insurance now are extended to those paid to other legal medical institutes. However, the care fees paid to private nursing home or expended for home care with similar nature shall still not be within the scope of being claimed as itemized deductions so far.
NTBK further interpreted that, as far, only the “medical expenses” in the expenses paid for long-term care may be claimed as itemized deductions. The other care fees or meal fees may not be claimed as itemized deductions. Moreover, the “medical expenses” paid by non-long-term care receiver may be claimed as itemized deductions shall still limited to those paid to public hospital, contracted medical institutions based on the National Health Insurance or hospitals whose accounting records are certified by the Ministry of Finance. Expenses paid to other legal medical institutions still shall not be claimed. The taxpayers shall pay attention to aforementioned regulations in order protect their own rights. 【#041】
Contact: Mrs.Pan, Revenue officer of the Second Legal Affairs Division