GST/HST for Physicians in Canada: Exempt vs. Taxable Medical Services

Most physicians don't spend much time thinking about GST/HST for their practice because the majority of medical services they provide are exempt from GST/HST. While this is true, there are exceptions that can create GST/HST registration and filing obligations for your practice.

This article will provide a high level overview of which physician services in Canada are generally GST/HST exempt, which may be subject to GST/HST, and when GST/HST registration becomes mandatory.

Common GST/HST Treatment of Physician Services in Canada

As a quick reference, the table below summarizes the GST/HST treatment of several common physician services.

Important: The GST/HST treatment depends on the specific facts and the purpose of the service. Similar looking services may receive different GST/HST treatment depending on why they are performed. The table above is intended as a general guide only.

Why are some services exempt while others are taxable?

The GST/HST rules generally exempt physician services that are provided for the diagnosis, treatment, protection, maintenance or restoration of a patient's health.

By contrast, services that are primarily administrative, legal, employment related, insurance related, or provided for another non-medical purpose may be subject to GST/HST.

Because the analysis depends on the purpose of the service, it's important to review each new income source before assuming it is GST/HST exempt.

When is GST/HST registration required?

If you provide only GST/HST exempt medical services, you do not need to register for GST/HST.

However, if some or all of these services that you provide are subject to GST/HST (i.e. you provide ‘taxable services’), you should monitor the fees earned from those activities.

Generally:

• If your annual revenue from providing taxable services is less than $30,000, you are considered a small supplier and GST/HST registration is not required. In other words, you do not have to worry about charging GST/HST for your practice.

  
  

• If your annual revenue from providing taxable services exceed $30,000, GST/HST registration becomes mandatory. In other words, your practice will need to register for GST/HST number with the CRA and you will need to charge GST/HST (only on your taxable services).

  
  

• The registration timing depends on when you exceed the $30,000 threshold but generally, it is required shortly after you exceed the $30,000 threshold.

  
  

Final Thoughts

For many physicians, GST/HST is not something they think about because their practice consists almost entirely of exempt patient care.

However, even a relatively small amount of consulting income, uninsured services, cosmetic procedures, expert reports, or administrative work can have GST/HST implications.

The good news is that many physicians remain below the $30,000 small supplier threshold, meaning GST/HST registration may not yet be required. Nevertheless, it's worthwhile to periodically review your revenue streams so there are no surprises as your practice grows.

Warm regards, 

Francis Do, CPA, CA

Have any questions? Please contact Francis Do at Francis@francisdo.com or 416-572-9633.

Disclaimer: This article is not intended to be a tax advice. Always consult and verify with a tax professional.