B-109 "Application of the GST/HST to the Practice of Naturopathic Doctors" 31 July 2015

Naturopathy is provincially regulated and therefore the scope of practice, and what constitutes a naturopathic service for GST/HST purposes, varies from province to province. The scope of practice for a naturopathic doctor may include, but is not limited to:

• physical examinations/assessments (medication reviews, diagnostic testing)
• botanical medicine
• clinical nutrition
• physical medicine (massage, manipulation, hydrotherapy)
• homeopathic medicine
• acupuncture
• intravenous (IV) therapy
• chelation therapy
• hyperbaric oxygen therapy
• lifestyle counselling

Example 4 [file review for opinion]

...The review of a file by a naturopathic doctor for purposes of providing an opinion on the diagnosis, prognosis, or treatment of an individual is a naturopathic service rendered to an individual by a practitioner of naturopathic services. ...

Example 5 [insurance co. report]

A naturopathic doctor performs an assessment and prepares a report required by an insurance company in respect of applications for, or the continuation of an insurance policy. ...

...The purpose of this supply is to assist the insurance company in determining if an individual is eligible for coverage under an insurance policy. Although the individual may ultimately receive medical or rehabilitative benefits under an insurance policy, the purpose of this supply is not to treat or assist the individual but rather to determine eligibility to enter into or continue an insurance policy. The supply is not a qualifying health care supply. ...

Example 13 [dual supply: teaching and naturopathic service]

A naturopathic doctor contracts with a teaching clinic to supervise students at the clinic. Each student interacts one-on-one with a patient for the diagnosis and treatment of a disorder under the direction of the naturopathic doctor. The patient is invoiced by the naturopathic doctor for the service she receives. ...The naturopathic doctor also invoices the clinic for the teaching services he provides.

The GST/HST will not apply to the fee charged to the patient for the service she receives where it is an exempt naturopathic service. Although the naturopathic doctor oversees the services rendered to the patient and may have interaction with the patient, the naturopathic doctor is also making a supply of a teaching service to the clinic. Where no other exempting provision applies, the naturopathic doctor is required to charge and collect the GST/HST... .

Example 8 [nutritionist's services part of naturopathic supply]

A naturopathic doctor enters into a contract with a nutritionist to provide nutritional counselling to a patient of the naturopathic doctor. The nutritional counselling is ordered and supervised by the naturopathic doctor following an assessment of the patient. ... The patient is invoiced by the naturopathic doctor for the nutritional counselling based on an hourly rate.

Although the service is performed by the nutritionist, the service forms part of the overall naturopathic service rendered by the naturopathic doctor. The patient is a patient of the naturopathic doctor and the naturopathic doctor is ultimately liable for the provision of care to his or her patients. ...

Other Charges

...A cancellation fee paid by a patient for a missed or cancelled appointment is treated as payment for the intended supply (i.e., treatment or other naturopathic service).

Fee sharing

[In] situations involving arrangements with contracted associate practitioners...generally one practitioner (principal) contracts for the services of one or more associate practitioners at the principal's place of business.

...[W]here the principal and associate have entered into a bona fide arrangement to share the fees from the associate's supplies of exempt naturopathic services, the payment made by the associate is treated as an apportionment of fees between parties and not as consideration paid to the principal for a supply. ...

Example 13 [dual supply: teaching and naturopathic service]

A naturopathic doctor contracts with a teaching clinic to supervise students at the clinic. Each student interacts one-on-one with a patient for the diagnosis and treatment of a disorder under the direction of the naturopathic doctor. The patient is invoiced by the naturopathic doctor for the service she receives. ...The naturopathic doctor also invoices the clinic for the teaching services he provides.

The GST/HST will not apply to the fee charged to the patient for the service she receives where it is an exempt naturopathic service. Although the naturopathic doctor oversees the services rendered to the patient and may have interaction with the patient, the naturopathic doctor is also making a supply of a teaching service to the clinic. Where no other exempting provision applies, the naturopathic doctor is required to charge and collect the GST/HST... .

Example 8 [nutritionist's services part of naturopathic supply]

A naturopathic doctor enters into a contract with a nutritionist to provide nutritional counselling to a patient of the naturopathic doctor. The nutritional counselling is ordered and supervised by the naturopathic doctor following an assessment of the patient. ... The patient is invoiced by the naturopathic doctor for the nutritional counselling based on an hourly rate.

Although the service is performed by the nutritionist, the service forms part of the overall naturopathic service rendered by the naturopathic doctor. The patient is a patient of the naturopathic doctor and the naturopathic doctor is ultimately liable for the provision of care to his or her patients.

Other Charges

...A cancellation fee paid by a patient for a missed or cancelled appointment is treated as payment for the intended supply (i.e., treatment or other naturopathic service). Where the naturopathic service is taxable, the GST/HST will apply to the cancellation fee.

Deemed self supply resulting from naturopathic services becoming exempted after February 10, 2014

If, as a result of naturopathic services becoming exempt from the GST/HST, there is a change in use of the capital personal property by the naturopathic doctor from more than 50% in taxable activities to 50% or less in taxable activities, the naturopathic doctor ceases to use the property primarily in taxable activities. As a result, if the naturopathic doctor is a GST/HST registrant, he or she is deemed by subsection 200(2) to have sold the property immediately before the change in use occurs and, at the time the change in use occurs, is deemed to have collected the GST/HST on the sale of the property equal to the basic tax content of the property at that time.

Deemed self supply resulting from naturopathic services becoming exempted after February 10, 2014

Where a decrease of 10% or more in the use of the capital real property in taxable activities occurs (but there is no cessation of use, which is described in the section below), a corporation or partnership that is a GST/HST registrant is deemed under subsection 206(5), immediately before the change in use occurs, to have sold a portion of the property that reflects the decrease in use in taxable activities. In addition, unless the sale is exempt, the corporation or partnership is deemed to have collected, at the time the change occurs, the GST/HST equal to the basic tax content of the property on the portion of the property that is no longer used in taxable activities.

As indicated above, the deemed sale effectively requires the registrant to account for all, or part, of the GST/HST previously claimed as an ITC on the original purchase of, or on any later improvements made to, the property.