Medical Professionals and GST/QST Requirements

Today, there are a large number of healthcare professionals that are not registered for GST/HST simply because there is not any legal requirement for them to do so.

The reason is that under the Excise Tax Act, many healthcare professionals offer services that fall under the “exempt services” category.

However the interpretation has changed somewhat in the last few years as to what is considered to fit into the exempt services category. The difference between exempt and non exempt medical services has since been more specifically defined.

This puts healthcare professionals in a position to have to consider whether or not which medical services they offer fall under which particular category. Quite often they will fall under both categories.

What if you Provide Non-Exempt Medical Services?

Many healthcare professionals may not realize that they may be obligated to pay GST/QST under the new rules , yet fail to register due to their lack of knowledge or awareness of the new definitions within the Excise Tax Act. It should be the responsibility of their accountant to raise this issue as, failure to do so, can result in costly penalties. Unfortunately in many instances this is not the case, and this issue is often overlooked resulting in consequence to the medical practitioner.

Even for those that are registered for the GST/QST It is important to be aware of what medical services and supplies are subject to the GST/QST

About Non-Exempt Services Surpassing $30,000 Per Year

Any non exempt services offered that surpass the annual threshold of 30K in revenue the healthcare professional is required to required to register for GST/HST.

Whether or not a healthcare professional’s non exempt services surpasses 30,000 in annual revenue, their obligation to file their GST/QST returns remains regardless of the amount of revenue earned.

Understanding Which Services are Exempt And Which Are Not

Medical Services that are performed for the maintenance , protection, or restoration of a patients health would fall under the exempt category. Other services that are of cosmetic nature would fall under the non exempt category.

Therefore it is important for healthcare professionals and their accountants work together to clearly define these parameters in order to properly comply with regulations.

Therefore healthcare professionals must register for the GST/QST once their revenue of non exempt services exceeds 30,000$ . This means the total value of medical reports written for insurance
companies and block fees collected are in excess of $30,000 per year, then it would be required to register for GST/HST

Some examples of non-exempt services would include but not limit to: back-to-work notes, Driver’s License Reports, completion of Disability Tax Credit form, cosmetic surgery and teeth whitening.
However examinations and medical services rendered that are covered by a provincial health insurance plan , will fall under the exempt category

Here is a short list of non exempt services

Managing Your Revenue Exposure

As a healthcare professional , it is important that your GST/QST obligations be considered by your accountant or tax adviser each year if you are providing a variety of healthcare supplies and
services.

If your professional activities change over the course of the year, it would be vitally important to re-assess which current services / supplies fall under exempt / non-exempt categories. It would be important to re-address these issues with your tax accountant / adviser in order to ensure that your level of non-exempt services revenue fall under compliance with GST/QST regulations in order to avoid non intended consequences. If you are still not sure after consultation with your tax adviser, it would be recommended to get a second opinion.

Disclaimer:
This article only provides information in a general nature and is only as current as the date in which it is posted. It is not updated and therefore may no longer be current. This document should not be relied upon as it does not claim to, nor provide advice on legal or tax matters. All tax situations are specific in nature and will likely differ from the situations that are presented in the article. It is advisable that you seek and consult a tax professional if you have any specific legal or tax questions. This document is intended to provide general information on a particular subject or subjects(s) and this article is not an exhaustive treatment of such subject(s). In accordance, the information in this document is not intended to constitute or replace accounting, tax, legal, investment, consulting, or other professional advice or services. Before any decision is made, or any action taken which might affect your personal finances or business, you should consult a qualified, professional adviser.