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Medical Activities: Taxable or Exempt?

01/05/2017


​​​​This release was originally published on Droit Inc and has been reproduced with permission.

MNP Experts

Are services provided by physicians taxable? The rules are constantly changing so it’s important to be vigilant, says this expert...

Generally speaking, registering for GST and QST is mandatory if your total taxable supplies exceed $30,000 for the previous four calendar quarters. Note that most health care services are considered to be exempt supplies and are therefore not subject to GST and QST.

This exemption applies to medical services covered by the RAMQ and other consultation, diagnostic or treatment services. What’s not exempt are medical services considered to be cosmetic. That’s why most physicians aren’t registered for GST and QST: very few of their services are taxable.

However, given the growing array of services physicians are compensated for, more and more of their services are subject to GST and QST.

Taxable supplies include reports and examinations for insurance or employment purposes, medical examinations carried out at the request of the SAAQ or the QPP, cosmetic surgery not covered by the RAMQ, the administrative role of department head at a hospital and on-call fees. In these cases, there’s no doctor/patient relationship.

Let’s look at on-call fees as described in the federal government’s 2017 Excise and GST / HST News. Facilities that are required to have a physician on call will enter into an agreement with the physician that provides for a set fee to be paid for a given period of time. This fee is not contingent on the physician rendering exempt health care services during the on-call period.

As a result, the on-call service would be a taxable supply subject to GST and QST and the physician could be required to remit indirect taxes to the government.

Since the variety of medical services provided by physicians is continually changing, it’s important to be vigilant and find out if these services are taxable or exempt from GST and QST. Physicians should first determine the amount of their supplies not covered by the RAMQ. If that amount exceeds $30,000, they should consult an indirect tax specialist, who can offer advice and confirm if they need to register for GST and QST.

​For more information, contact Elsa Ho-Hio-Hen, CPA, CMA at 514.228.7798 or [email protected]