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Supplies of health care services
DRAFT FOR DISCUSSION PURPOSES ONLY
In a Tax Court of Canada decision concerning
The Court concluded that the individuals were “patients” of the Riverfront facility because they attended the facility to be examined by a physician. The Court concluded that because Riverfront provided the examination rooms and other equipment necessary for the examinations and remunerated the physicians for the examinations and reports, Riverfront’s supplies of IMEs and reports fell within the exemption provided in section 2 of Part II of Schedule V to the ETA. This provision exempts a supply made by the operator of a health care facility of an institutional health care service rendered to a patient of the facility. Thus, for an IME to be an exempt supply, the activities that comprise the IME must fall in one of the exemptions in the ETA.
In view of the Court’s comments regarding the physicians’ examinations, we reviewed our position on the tax status of supplies made directly by physicians of IME reports, as well as evaluations supplied by other health care professionals. Our position is noted below.
Riverfront Medical Evaluations Ltd. v. Canada (“Riverfront”), the issue was whether a corporation’s supplies of independent medical evaluation (“IME”) reports to insurance companies and lawyers were “institutional health care services” supplied by the operator of a health care facility and rendered to patients of the facility. Essentially, the Court found that an IME consisted of medical care because it consisted of a physical examination of an individual by a physician. In addition, the Court found that Riverfront was a “health care facility” for purposes of the Excise Tax Act (the “ETA”) because the physical examinations were provided at Riverfront’s facility.
Under the Excise Tax Act (the Act), exemptions from the GST/HST for supplies of medical and certain other health care services are generally limited to those made by suppliers who are engaged in the practice of a particular profession and who are licensed or certified under the laws of a province to practice the particular profession. These suppliers are defined in the Act.
For instance, a supply of a consultative, treatment, diagnostic or other health care service rendered to an individual is exempt for GST/HST purposes when a medical practitioner makes the supply. A medical practitioner is defined as a person who is licensed under the laws of a province to practice the profession of medicine or dentistry
In addition, a supply of an optometric, chiropractic, physiotherapy, podiatric, osteopathic, audiological, speech-language pathology, occupational therapy, or psychological service rendered to an individual is exempt when a practitioner supplies the service. A practitioner is defined in the Act as a person who practices the profession relevant to one of these services and who is licensed or otherwise certified to practice that profession (if required in the province where the service is supplied) or has the qualifications equivalent to those necessary to be so licensed or certified in another province (if not required in the province where the service is supplied). Please note that it is possible for a corporation to qualify as a medical practitioner or practitioner.