Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 161175
Business Number: […]
Dear [Client]:
Subject: GST/HST RULING
Immigration Medical Examinations
Thank you for your fax of [mm/dd/yyyy] and our telephone conversation of [mm/dd/yyyy] concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the supply of Immigration Medical Examinations. We apologize for the delay in this response.
The HST applies in the participating provinces at the following rates: 13% in Ontario, New Brunswick and Newfoundland and Labrador, 14% in Prince Edward Island and 15% in Nova Scotia. The GST applies in the rest of Canada at the rate of 5%.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
STATEMENT OF FACTS
We understand the following from your fax and our telephone conversation:
1. The Immigration and Refugee Protection Act (IRPA) and its regulations set out, among others, the medical requirements that foreign nationals (individuals) must meet in order to come to Canada as temporary or permanent residents. In addition, the IRPA sets out the grounds on which a person may be found to be inadmissible to Canada.
2. The objectives of the IRPA include ensuring that the movement of people into Canada contributes to the country’s cultural, social and economic interests and affirming Canada’s humanitarian commitments while protecting the health, safety and security of Canadians.
3. With few exceptions, the Immigration Medical Examination is a mandatory requirement under the IRPA (subsection 16(2) of the IRPA).
4. The Immigration Medical Examination is a medical evaluation (medical screening) completed by panel physicians (medical doctors) as well as health facilities in Canada, such as laboratories, medical clinics, centers or hospitals. A Medical Report form (IMM 1017) and other supplemental forms or an on-line submission of examination results must be provided. According to section 29 of the Immigration and Refugee Protection Regulations, the Immigration Medical Examination includes any or all of the following:
a) physical examination;
b) mental examination;
c) review of past medical history;
d) laboratory tests;
e) diagnostic tests; and
f) medical assessment of records respecting the applicants (foreign nationals).
5. Occasionally, additional reports are required by medical specialists such as psychiatrists, respirologists etc. to supplement the IMM 1017 and other forms.
6. Once completed by the panel physicians, the forms and applicable laboratory and other diagnostic test results are sent to […][XYZ] for assessment and determination of whether the person’s health condition is:
a) likely to be a danger to public health;
b) likely to be a danger to public safety; or
c) might reasonably be expected to cause excessive demand on health or social services. (Footnote 1)
7. […]
8. Panel physicians are medical doctors that […] provide Immigration Medical Examinations. A foreign national must have an Immigration Medical Examination from one of the panel physicians […]. Their own medical doctor cannot conduct the medical exam.
9. The panel physicians invoice [XYZ] for Immigration Medical Examinations […].
10. In the past, the panel physicians did not charge the GST/HST on the fee for the Immigration Medical Examinations, however, the panel physicians have now been advised by the Canada Revenue Agency (CRA) that the GST/HST must be collected on their fee for the Immigration Medical Examinations.
RULING REQUESTED
You would like to know if the supply of Immigration Medical Examinations provided by panel physicians is taxable for GST/HST purposes.
RULING GIVEN
Based on the facts set out above, we rule that:
1. The supply of an Immigration Medical Examination by panel physicians made before March 22, 2013 is an exempt supply of a service pursuant to section 5 of Part II of Schedule V.
2. The supply of Immigration Medical Examination by panel physicians made after March 21, 2013 is a taxable supply of a service for GST/HST purposes.
EXPLANATION
Supplies made before March 22, 2013
Part II of Schedule V sets out the health care services that are exempt under the GST/HST.
Section 5 of Part II of Schedule V exempts a supply of a consultative, diagnostic, treatment or other health care service that is rendered by a medical practitioner to an individual.
The term "medical practitioner" is defined in section 1 of Part II of Schedule V, for purposes of Part II of Schedule, to mean "a person who is entitled under the laws of a province to practise the profession of medicine or dentistry". The panel physicians (medical doctors) are medical practitioners for purposes of Part II of Schedule V.
The supply of Immigration Medical Examinations by panel physicians to [XYZ] that consist of performing a medical examination and providing a written report are exempt supplies of services pursuant to section 5 of Part II of Schedule V for supplies made before March 22, 2013. However, if the services provided by the panel physicians are cosmetic service supplies as defined in section 1 of Part II of Schedule V, the supply of these services would not be exempt from the GST/HST by virtue of the application of section 1.1 of Part II of Schedule V.
Supplies made after March 21, 2013
Amendments were made to provisions relating to the supply of health care services in Part II of Schedule V clarifying that GST/HST applies to supplies of reports, examinations and other property or services that are not made for the purpose of the protection, maintenance or restoration of the health of a person or for palliative care. The amendments apply to supplies made after March 21, 2013.
Section 1.2 of Part II of Schedule V has been added and provides that for the purposes of Part II of Schedule V, other than sections 9 and 11 to 14 (Footnote 2) , a supply that is not a “qualifying health care supply” is deemed not to be included in Part II of Schedule V and is therefore not exempt under any provision in Part II.
The term “qualifying health care supply” has also been added to section 1 of Part II of Schedule V and is defined to mean
“a supply of property or a service that is made for the purpose of
(a) maintaining health,
(b) preventing disease,
(c) treating, relieving or remediating an injury, illness, disorder or disability,
(d) assisting (other than financially) an individual in coping with an injury, illness, disorder or disability, or
(e) providing palliative health care.”
As a result of this amendment, services performed by health care professionals may be taxable or exempt depending on their purpose. This will particularly affect supplies of medical examinations, reports and certificates. In these cases it will be necessary to determine the purpose of the supply to determine its tax status.
Supplies of medical examinations, reports or certificates that meet the conditions of section 5 of Part II of Schedule V will be exempt if the supply is made for a purpose that meets the definition of qualifying health care supply and is not a cosmetic service supply. Supplies of medical examinations, reports and certificates that are made solely for other purposes, such as enabling a third party to make a decision for insurance or legal purposes, would be deemed not to be included in Part II of Schedule V and would be taxable for GST/HST purposes.
The purpose of the Immigration Medical Examination services provided by panel physicians is to assess if foreign nationals (individuals) meet the medical requirements for immigration to Canada as temporary or permanent residents. This purpose is not one included in those listed in the definition of the term “qualifying health care supply”. The fact that the medical examination may uncover health issues of the individual does not change the purpose of the supply.
Accordingly, the supply of Immigration Medical Examination services provided by panel physicians is not a qualifying health care supply as defined under section 1 of Part II of Schedule V. Therefore, the supply is deemed under section 1.2 of Part II of Schedule V not to be included in Part II of Schedule V and is not exempt under any provision in Part II of Schedule V. As no other exempting or relieving provision applies, the supply of the Immigration Medical Examination services made after March 21, 2013 is subject to GST/HST at the applicable rate (5%, 13%, 14% or 15%) depending on the place of supply, unless the supplier is a small supplier.
For additional information, please refer to GST/HST Notice No. 286, Draft GST/HST Policy Statement - 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.
It should be noted that even though the supply of Immigration Medical Examination services by panel physicians made after March 21, 2013 is a taxable supply for GST/HST purposes, GST/HST will not apply to payments made to physicians who are not GST/HST registrants. Generally, GST/HST registrants must collect GST/HST on their taxable (other than zero-rated) supplies of property and services in Canada. However, a person who is a small supplier and not a registrant is not required to collect tax on certain supplies it makes. For GST/HST purposes, a registrant includes a person who is registered for GST/HST and a person who is required to be registered for GST/HST purposes.
In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, the CRA is bound by the ruling(s) given in this letter provided that: none of the issues discussed in the ruling(s) are currently under audit, objection, or appeal; no future changes to the ETA, regulations or the CRA’s interpretative policy affect its validity; and all relevant facts and transactions have been fully and accurately disclosed.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 905-572-2636. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.
Yours truly,
Maria Forte-Long
Health Care Sectors Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
FOOTNOTES
1 Those criteria are found in section 38 of the IRPA.
2 Section 9 of Part II of Schedule V exempts supplies of properties and services covered by a provincial health insurance plan, section 11 exempts supplies of food to a health care facility, section 13 exempts supplies of home care services and section 14 exempts supplies of various training services. Please refer to those sections for the conditions required in order for the supply to be exempt.
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