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: 168544
Business Number: […]
Dear [Client]:
Subject: GST/HST INTERPRETATION
Supply of acupuncture services
Thank you for your facsimile of January 27, 2015 and your phone conversation on March 12, 2015, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the supply of services made by an acupuncturist […].
[…]
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.
BACKGROUND
We understand that you are providing services as a[n] […] acupuncturist in the provinces of […] through your business, […]. You are registered for GST/HST as a sole proprietor under the business number noted above.
[…]. The services you provide are not payable or reimbursed by a provincial health insurance plan.
[…]. The following documents pertain to your certification in the field of acupuncture: […]
INTERPRETATION REQUESTED
You would like to know whether the acupuncture services you provide are exempt from GST/HST.
Pursuant to paragraph 14 of GST/HST Memoranda 1.4, Excise and GST/HST Rulings and Interpretations Service, the Canada Revenue Agency (CRA) can only issue a ruling when the person requesting the ruling has provided all the relevant facts of the transactions. Where all the relevant facts are not provided, an interpretation may be issued. In this situation, we are unable to issue a ruling. Therefore, we are providing the following interpretation for your assistance.
INTERPRETATION GIVEN
Generally, most supplies of property and services made in Canada are subject to GST/HST, unless they are specifically exempt under Schedule V. Part II of Schedule V sets out the health care services that are exempt from GST/HST. Section 7 of Part II of Schedule V is relevant in this case.
Section 7 of Part II of Schedule V exempts a supply of any of the following services if the service is rendered to an individual by a practitioner of the service:
(a) optometric services;
(b) chiropractic services;
(c) physiotherapy services;
(d) chiropodic services;
(e) podiatric services;
(f) osteopathic services;
(g) audiological services;
(h) speech-language pathology services;
(i) occupational therapy services;
(j) psychological services;
(k) midwifery services;
(l) acupuncture services; and
(m) naturopathic services.
Section 1 of Part II of Schedule V defines a “practitioner” to mean:
in respect of a supply of optometric, chiropractic, physiotherapy, chiropodic, podiatric, osteopathic, audiological, speech-language pathology, occupational therapy, psychological, midwifery, dietetic, acupuncture or naturopathic services, means a person who
(a) practises the profession of optometry, chiropractic, physiotherapy, chiropody, podiatry, osteopathy, audiology, speech-language pathology, occupational therapy, psychology, midwifery, dietetics, acupuncture or naturopathy as a naturopathic doctor, as the case may be,
(b) where the person is required to be licensed or otherwise certified to practise the profession in the province in which the service is supplied, is so licensed or certified, and
(c) where the person is not required to be licensed or otherwise certified to practise the profession in that province, has the qualifications equivalent to those necessary to be so licensed or otherwise certified in another province. [Emphasis added]
Section 7 of Part II of Schedule V exempts the supply of acupuncture services if the acupuncture service is rendered to an individual by a “practitioner” of the service. Section 1 of Part II of Schedule V defines the term “practitioner” in respect of an acupuncture service to mean a person who (a) practices the profession of acupuncture; and is either (b) licenced or certified if required in the province in which the service is supplied; or (c) if licensing or certification is not required in the province in which the service is supplied, the person has the qualifications equivalent to those necessary to be licensed or certified in another province.
Paragraph (b) of the definition of “practitioner”
At the time of writing, the profession of acupuncture is regulated under provincial legislation in the provinces of Alberta, British Columbia, Ontario, Quebec and Newfoundland and Labrador. If an acupuncture services is supplied in any of these provinces paragraph (b) of the definition of “practitioner” requires the acupuncturist to be licensed by the provincial governing body to practise the profession of acupuncture in that province to be a practitioner for GST/HST purposes. As you requested during our phone conversation, the governing bodies established by provincial legislation in the regulated provinces are:
* The College and Association of Acupuncturist of Alberta (www.acupuncturealberta.ca)
* The College of Traditional Chinese Medicine Practitioners and Acupuncturists of British Columbia (www.ctcma.bc.ca)
* The College of Traditional Chinese Medicine Practitioners and Acupuncture of Ontario (www.ctcmpao.on.ca)
* L’Ordre des acupuncteurs du Québec (www.o-a-q.org)
* The College of Traditional Chinese Medicine Practitioners and Acupuncturists of Newfoundland and Labrador
Therefore, the GST/HST exemption in section 7 of Part II of Schedule V applies to supplies of acupuncture services made in one of the regulated provinces only by an acupuncturist who is licensed to practise in the province in which the service is supplied.
Paragraph (c) of the definition of “practitioner”
The remaining provinces do not regulate the profession of acupuncture under provincial legislation. Therefore, a governing body has not been established in these unregulated provinces to license or otherwise certify a person practising the profession of acupuncture. Where a person makes a supply of acupuncture services in an unregulated province paragraph (c) of the definition of “practitioner” applies.
Paragraph (c) of the definition of “practitioner” requires the acupuncturist to have qualifications equivalent to those qualifications required to be licensed in a province where the profession is regulated to be a practitioner for GST/HST purposes.
Therefore, the GST/HST exemption in Section 7 of Part II of Schedule V will only apply to supplies of acupuncture services made in an unregulated province by a person who can demonstrate that he or she has the qualifications equivalent to those required to be licensed in a province where the profession is regulated.
Section 1.1 and 1.2 of Part II of Schedule V
In addition, if a supply falls within an exemption under Part II of Schedule V, it is necessary to determine if the supply is excluded from the exemption by section 1.1 of Part II of Schedule V because the supply is a cosmetic service supply or by section 1.2 of Part II of Schedule V because the supply is not a qualifying health care supply.
The expression “cosmetic service supply” is defined in section 1 of Part II of Schedule V to mean a supply of property or a service that is made for cosmetic purposes and not for medical or reconstructive purposes.
Cosmetic procedures are surgical and non-surgical procedures that are generally aimed at enhancing one’s appearance that are not provided for the purpose of treating a medical condition or for reconstructive purposes, such as liposuction, hair replacement procedures, botulinum toxin injections, teeth whitening, as well as face lifts and breast augmentation surgery. Also included are cosmetic or facial rejuvenation acupuncture and laser therapy (if performed for cosmetic purposes). Supplies of these services are not exempt from the GST/HST and an acupuncturist is required to charge GST/HST at the applicable rate, unless the acupuncturist is a small supplier.
In addition, section 1.2 of Part II of Schedule V must also be considered. Section 1.2 provides that for the purposes of Part II of Schedule V to the ETA, other than sections 9 and 11 to 14 (Footnote 1) , a supply that is not a “qualifying health care supply” is deemed not to be included in Part II of that Schedule. Generally, supplies deemed not to be included in Part II of Schedule V would be taxable at the applicable rate of GST/HST.
The expression “qualifying health care supply” is defined in section 1 of Part II of Schedule V 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.”
Please note that paragraph (d) of the definition of qualifying health care supply includes supplies made for the purpose of assisting an individual (other than financially) in coping with an injury, illness, disorder or disability. This would include services provided directly to the individual to cope with the limitations or effects of an injury. It would not include evaluations and reports done for the purpose of helping an insurer determine the type or amount of benefits that the individual is entitled to receive. It would also not include services supplied for financial purposes such as a medical evaluation or assessment performed for the purpose of determining the value of injuries for a settlement of a claim for damages.
Where a supply of acupuncture services is made for one of the purposes outlined in paragraphs (a) to (e) of the definition of “qualifying health care supply” the supply will be exempt from GST/HST. If a supply of acupuncture services is not made for one of these purposes the supply would be subject to GST/HST unless the supply can be exempt under sections 9 and 11-14 of Part II of Schedule V or an exempting provision in another Part of Schedule V.
For more information, 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.
In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, the interpretation(s) given in this letter, including any additional information, is not a ruling and does not bind the Canada Revenue Agency (CRA) with respect to a particular situation. Future changes to the ETA, regulations, or the CRA’s interpretative policy could affect the interpretation(s) or the additional information provided herein.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-954-7952. 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,
Alison Jones
Health Care Sectors Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
FOOTNOTES
1 Section 9 of Part II of Schedule V exempts supplies of properties and services covered by provincial health insurance plans, section 11 exempts supplies of food and beverages to a health care facility, section 13 exempts supplies of subsidized home care services and section 14 exempts supplies of various training services. Please see those sections for the conditions placed on the supply in order for it to be exempt.
Email this Content