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If you are a medical practitioner, are you required to be registered for GST/HST and QST?


It is a common misconception that medical practitioners including licensed doctors, nurses and dentists do not have to register for GST/HST, and for QST purposes, as the case may be, on the basis that most of the services they provide are exempt from indirect tax. However, in fact it may be necessary for medical practitioners to register for GST/HST and QST. This is largely because while the scope and nature of many taxable services provided by medical practitioners is expanding, what is considered to be an exempt service for purposes of GST/HST and QST has been narrowed by new legislation. As such, it has become increasingly important for medical practitioners to consider the GST/HST and QST implications of the services they provide.

Implications of the 2013 Federal Budget Changes

Previously, under the Canada Revenue Agency's (CRA) guidance, many reports including independent medical examinations (IMEs) were exempt from GST/HST. The 2013 Federal Budget amended provisions relating to the health care section in the Excise Tax Act (ETA). As a result of these amendments, services performed by medical practitioners may be taxable or exempt from GST/HST depending on the purpose of the supply. As outlined in the legislation, if the purpose of the supply is not one of the purposes found in the definition of “qualifying health care supply” (QHSC) (defined below), the supply will be subject to GST/HST. Therefore, this specifically impacts supplies of medical examinations, reports and certificates which may have an indirect link to health.

The CRA published a draft GST/HST policy statement in October 2014 entitled Qualifying Health Care Supplies and the Application of Section 1.2 of Part II of Schedule V to the Excise Tax Act to the Supply of Medical Examinations, Reports and Certificates outlining its position on the new legislation. In response to the CRA the Canadian Medical Association's (CMA) stated that the draft CRA statement provided insufficient guidance and they are concerned that this ambiguity will ultimately lead to confusion for patients and clinicians alike. Specifically, “additional clarity is required with respect to;

  • the meaning of the various elements in the definition of a QHCS,
  • the factors to be considered when determining if a supply is a QHCS, and
  • the documentation required to support a physician's conclusions regarding the nature of his/her supplies.”

What is a QHCS?

A QHCS is the supply of a property or a service that is for the purpose of the maintenance, prevention, or restoration of the health of a person or for palliative care. When determining whether a supply of a service is a QHCS some factors to consider include:

  • Who requires the report or examination?
  • What is the intended purpose?
  • Are the supplies made for more than one purpose?
The following is a non-exhaustive list of healthcare related services and the GST/HST treatment that will generally apply:
Reports and formsGST/HSTNo GST/HST
Medical-legal reportsX 
Disability certificate (including ancillary services)X 
Disability tax credit formX 
Expert opinion reportsX 
Citizenship and Immigration Canada reportX 
Driver's license reportX 
Block and annual feesX 
Preparation and transfer of medical records X
Prescription renewal over the telephone X
Examination and certificate for sick leave X
Management, research, teachingX 
Hospital on-call feesX 

All property and services covered by a provincial health insurance plan continue to be exempt from GST/HST. The only exception to this may be if a supply has been classified as zero-rated.

Should you register?

If you are a medical practitioner and under the new rules your taxable services exceed the $30,000 annual threshold, you are required to register for GST/HST. Medical practitioners that are found to have exceeded the threshold and not registered will incur penalties and interest on any outstanding tax that is due. Remember that you can also choose to register voluntarily. This could make financial sense for some medical practitioners if the tax paid on eligible expenses exceeds the tax collected on taxable supplies.

Once you are registered, you are required to collect and remit GST/HST on all taxable supplies and services that are not a QHCS. Take note that there are structures between a clinic and a medical practitioner that can be used to reduce or eliminate the GST/HST. Contact your BDO advisor to find out more information on these structures.

Québec Sales Tax

Since the QST regime is harmonized to the GST/HST regime, the comments in this publication applies for QST purposes and to medical practitioner who are practicing in Québec, with required modifications.


The application of GST/HST, and QST if applicable, to medical reports and examinations can be complex. Medical practitioners have a lot to consider with respect to the types of services they supply and whether registration may be required. The tax status of examinations and reports that are for the purpose of a patient's present and future health care needs should not be affected by the GST/HST and QST changes


Contact your BDO advisor, or local BDO office if you have any questions about the application of GST/HST to the various types of services you provide.

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The information in this publication is current as of March 23, 2017.

This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact BDO Canada LLP to discuss these matters in the context of your particular circumstances. BDO Canada LLP, its partners, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.

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