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Changes Around GST / HST and On-Call Payments

03/04/2017


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​​Changes around GST / HST and On-Call Payments

The Canada Revenue Agency (CRA) recently released a GST / HST technical interpretation* concerning on-call payments made by hospitals to physicians that may impact your GST / HST filing requirements.

In its interpretation, the CRA concluded hospital on-call fees paid by a hospital to a physician are consideration for a taxable supply and subject to GST / HST. Depending on your situation, you may be required to collect and remit GST / HST for on-call services.

Of note, the CRA did not review specific facts or agreements in reaching its conclusion. The CRA was advised that on-call payments made by a hospital to a physician permit a hospital to retain the physician’s services to treat patients when the hospital does not require the physician on site when there are no patients present. The on-call payment ensures a physician remains close to the hospital to respond to urgent calls when patients do arrive.

The application of GST / HST to on-call payments will be fact specific. Therefore, with this new information, you will need to evaluate your own situation with a trusted advisor and verify whether GST / HST applies and what it means for your practice.

If a physician had worldwide revenues from taxable supplies greater than $30,000 over the last four consecutive calendar quarters, the physician would be required to register for GST / HST and must collect and remit GST / HST calculated on the value of all taxable supplies.

In addition to on-call payments, the CRA also has clear positions concerning the application of GST / HST to: teaching, research and administrative payments whether made by a hospital university or health authority, and payments made by a provincial government in the context of alternate funding plans.

Proper GST / HST planning and compliance can reduce physicians’ practice costs, as well as potential issues associated with non-compliance. MNP’s Tax and Professional Services teams are available to help physicians address this complex and continuously evolving area. 

For more information on how this could impact you and / or your practice, contact Marty Clement, CPA, CA, at 250.763.8919 or [email protected]

*a technical interpretation generally explains the CRA’s interpretation of Canadian tax law and may not extend t​o all situations. ​

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