HST/GST on Physician Services: Taxable vs Exempt

Medical doctor services are generally exempt from HST/GST under the Excise Tax Act. However, some physicians provide services that are considered beyond “medical services” and these are subject to HST/GST. If you are a physician in such a scenario, it is important to understand the HST/GST registration, collection, and reporting requirements. If a medical doctor’s HST/HST taxable supplies (non-medical services) exceed $30,000 for four consecutive calendar quarters, registration is required.

Exempt Medical Supply:

Generally speaking, medical services are exempt where the services are consultative, diagnostic, treatment, or other healthcare related services. Essentially, the primary purpose of a service is to protect, maintain or restore health.

The Canada Revenue Agency (CRA) generally considered the following healthcare services exempt from HST/GST.

• Medical examinations, assessments, and diagnoses
• Medical treatments and procedures
• Emergency medical services
• Physician services, including consultations and surgeries
• Nursing services
• Laboratory and diagnostic testing services
• Ambulance services
• Physiotherapy, chiropractic, and other paramedical services provided by qualified practitioners
• Prescription drugs and medical devices
• Medical and hospital care provided by licensed facilities and professionals
• Medical services provided by veterinarians to treat animals
• Occupational therapy and speech-language pathology services

A practitioner is defined in the Act as a person who practices the profession relevant to services and who is licensed or otherwise certified to practice that profession (if required in the province where the service is supplied) or has the qualifications equivalent to those necessary to be so licensed or certified in another province (if not required in the province where the service is supplied). Please note that it is possible for a corporation to qualify as a medical practitioner or practitioner.

Accordingly, a corporation may supply health care services through their employees or through independent contractors they engage to perform services on their behalf. However, corporations who do not meet the definition of medical practitioner or practitioner should be aware that their supplies may not fall within the exemptions in the Act.

Taxable supplies for physicians:

If the primary purpose of a service is NOT to protect, maintain or restore health, they are considered a HST/GST taxable supply, and HST will be payable.

Here are some examples of non-medical services that may be subject to HST/GST in Canada:

• Cosmetic surgery and other elective medical procedures that are not medically necessary
• Personal training services
• CPP disability reports
• Preparing certificates or letters for employers, camps, or educational institutions
• Review of medical documentation for the third party 
• Consulting/research services
• Administrative role of department head at a hospital.
• Spa and beauty treatments, such as facials and massages
• Gym memberships and fitness classes
• Coaching and consulting services
• Nutrition and weight loss programs
• Services provided by naturopaths and other alternative healthcare practitioners who are not registered healthcare professionals
• Home healthcare services provided by caregivers who are not licensed healthcare professionals
• Products sold by healthcare providers that are not prescription drugs or medical devices, such as supplements, vitamins, and herbal remedies
• Medical and health-related products sold by non-medical retailers, such as eyeglasses, hearing aids, and orthopedic shoes

It is important to note that the above list is not exhaustive and there may be exceptions or specific circumstances where certain healthcare services may be subject to HST or exempted.  

It is recommended to consult with the CRA guides and publications or a tax professional for more information regarding HST and non-medical services.

If you are a medical professional and need assistance with the incorporation of your practice, bookkeeping, and/or other tax and accounting issues, please book a consultation call with our CPA for professional guidance.

Source Accounting Professional Corporation (CPA) is a full-service accounting firm in Mississauga, helping doctors, physicians, dentists, nurses, pharmacists, therapists, chiropractors, medical clinics, and other medical professionals by providing tax preparation, corporate tax filing, accounting, bookkeeping services, payroll solutions, etc. If you are looking for an accountant Mississauga (Brampton, Toronto, GTA) or an accountancy firm Mississauga, you are in the right place.

Disclaimer: The above contents are provided for general guidance only, based on information believed to be accurate and complete, but we cannot guarantee its accuracy or completeness. It does not provide legal advice, nor can it or should it be relied upon. Please contact/consult a qualified tax professional specific to your case.