Business
HST I N THE CLINIC
I
n July 2010, Ontario implemented a major tax reform that harmonized the
provincial sales tax (PST) with the federal GST under one single value added tax
system called the harmonized sales tax (HST) at 13%. Most goods and services
in or imported into Canada are subject to GST/HST. It is important for business
operators to know which goods and services are taxable and which are exempt.
Does the HST Apply to Health
Care Services?
Does the HST Apply to Health
Care Supplies?
Under the HST system, the services
of some health care professionals
are taxable and the services of others
are exempt. The list of health care
professionals whose services are exempt
from GST/HST can be found in Part II
of Schedule V to the Excise Tax Act (the
ETA). If you provide only exempt goods
and services, you cannot register for a
GST/HST account.
The following is a partial list of health
care professionals whose services
are listed as exempt: chiropractors,
chiropodists, dieticians, podiatrists,
physiotherapists, registered nurses,
registered nursing assistants and licensed
or registered practical nurses.
If a health care professional is not
listed in Part II of Schedule V to the
ETA , the services that they provide
are usually taxable. The following is a
partial list of therapists or health care
workers whose services are generally
considered by the Canada Revenue
Agency (CRA) to be taxable for GST/
HST purposes: acupuncturists, health
care assistants (including physiotherapy
and occupational therapy assistants),
kinesiologists, massage therapists,
naturopaths and sports therapists.
Most supplies are taxable. Certain
supplies are exempt from GST/HST while
others are zero-rated .
Zero-rated supplies are taxable at the
rate of 0%. No GST/HST is charged on
them, but GST/HST registrants can claim
an input tax credit for the GST/HST they
pay on purchases and expenses made to
provide them. Zero-rated medical supplies
count towards your total worldwide
taxable supplies of goods and services.
Custom-made orthotic and
orthopaedic devices are one example
of a zero-rated supply. If these devices
are not entirely custom-made, they are
zero-rated only when prescribed by a
medical practitioner. See the CRA’s GST/
HST Memoranda Series Chapter 4-2,
Medical and Assistive Devices for more
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SPRING 2015
information.
Do I Need to Apply for a GST/
HST Account?
It is mandatory for businesses (except
public service bodies) to register for a
GST/HST account if your total worldwide
taxable supplies of goods and services
exceed $30,000 in a single calendar
quarter or in four consecutive calendar
quarters. This includes zero-rated
supplies like custom-made orthotics and
orthopaedic devices.
The following are general examples of
products and services commonly supplied
in a chiropractic practice which count
towards a clinic’s total worldwide taxable
supplies of goods and services:
∞∞ massage therapy clinical service
provided to patients by a chiropractor
or any other non-medical practitioner,
∞∞ fees for non-clinical services (e.g.,
medical-legal reports, return to work/
school notes, copying of clinical
records),
∞∞ fees paid by an associate for the use of
the principal’s facilities or administrative
services (we strongly urge you to
consult with your legal or tax adviser
regarding your specific situation),
∞∞ sale of most dietary supplements
(except those which count as basic
groceries and are therefore exempt),
and,
∞∞ sale of most orthotics, cervical pillows,
and other orthopaedic supports.
Businesses which only provide exempt
goods and services cannot:
∞∞ register for GST/HST,
∞∞ charge GST/HST, or,
∞∞ claim input tax credits (ITCs).
In general, businesses with GST/HST
taxable sales of $30,000 or less in the last
year (“Small Suppliers”) are not required to
register and collect the tax.
If you are already registered but
taxable sales are $30,000 or less, you still