The scope of GST/HST can often create confusion for physicians and health care providers due to the specifics contained in the general exemption for medical services. It is understood that most services performed by a medical practitioner are exempt from GST/HST where they are made for the purpose of:
- maintaining health,
- preventing disease,
- treating, relieving or remediating an injury, illness, disorder or disability,
- assisting (other than financially) an individual in coping with an injury, illness, disorder or disability, or
- providing palliative health care.
The result of this broad exemption is a common misconception that all services provided by medical practitioners are exempt from GST/HST and they therefore do not need to register their practices for GST/HST. This is certainly not the case and medical practitioners should carefully evaluate whether GST/HST registration is required, especially when providing ancillary or uninsured services.
When is GST/HST Registration Required?
If your total taxable supplies exceed $30,000 over four consecutive calendar quarters, you must register for GST/HST. A taxable supply is considered goods or services provided in the course of commercial activity in Canada, which is not otherwise exempt from GST/HST.
Once registered, a medical practitioner is required to collect GST/HST on revenues which are not exempt from GST/HST.
Which Uninsured Services are Exempt from GST/HST?
In general, GST/HST may apply where the primary purpose is not motivated by the protection, maintenance, or restoration of health of the individual patient. The chart below summarizes the application of GST/HST to common ancillary or uninsured revenues:
Hospital On-Call Fees
The current Canada Revenue Agency (“CRA”) position for hospital on-call fees (contained in Excise and GST/HST News – No. 101 and various GST/HST Rulings) states that GST/HST should apply as the fee is not dependent on the rendering of health care services by the medical practitioner to a patient. It is also important to note that CRA also confirms that where the consideration is payable or reimbursed by the government of a province, under a plan established under an act of the legislature of the province to provide for health care services for all insured persons of the province, the supply of the right may be an exempt supply for GST/HST purposes.
As a result, it is important for medical practitioners to review their specific situation on a case-by-case basis to determine whether GST/HST registration is required. For assistance with GST/HST, contact us and ask to speak to an expert on our HST team.
