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: 122945
Business Number: […]
November 27, 2012
Dear [Client]:
Subject: GST/HST RULING
Registered Nurse Rehabilitation Case Manager
Thank you for your fax of [mm/dd/yyyy], concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the rehabilitation case management services that you provide. More specifically, you are requesting that we reconsider our ruling of [mm/dd/yyyy] in which we ruled that your services were not exempt nursing services pursuant to section 6 of Part II of Schedule V to the Excise Tax Act (ETA). Please note that this letter supersedes our previous ruling dated [mm/dd/yyyy] on the subject. We apologize for the delay in responding.
HST applies at the rate of 15% in Nova Scotia, 13% in Ontario, New Brunswick, and Newfoundland and Labrador, and 12% in British Columbia. GST applies at the rate of 5% in the remaining provinces and territories.
All legislative references are to the ETA unless otherwise specified.
STATEMENT OF FACTS
We understand the following:
1. You are a […] Registered Nurse in the Province of Ontario. You are in good standing with the College of Nurses of Ontario (the “College”).
2. You are a GST/HST registrant.
3. You work with clients/patients who have sustained catastrophic injuries […].
4. Your clients are referred to you by their legal representatives, discharge planners at hospitals, physicians, or nurse practitioners.
5. […].
6. The services that you provide often begin while the client in still in the hospital. You work closely with multidisciplinary rehab team towards your client’s discharge planning and community reintegration.
7. Your clients hire you as a registered nurse and you charge for your services […].
8. Based on the information provided we understand that you provide the following services to you clients:
* Assessment of your clients’ health care needs.
* Collaborating with other health care providers in respect of your clients’ care.
* Determining appropriate health care services, treatments and equipment.
* Counselling clients.
* Teaching the families of your clients on how to care for the client.
* Analyzing the findings of your clients’ health care assessments.
* Providing professional advice.
* Providing written reports to your clients’ insurance companies.
RULING REQUESTED
You would like to know if the supplies of your services are exempt nursing services pursuant to section 6 of Part II of Schedule V to the ETA.
RULING GIVEN
Based on the facts set out above and the information provided, we rule that the services that you provide are exempt nursing services pursuant to section 6 of Part II of Schedule V to the ETA.
This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service. We are bound by this ruling provided that none of the above issues are currently under audit, objection, or appeal, that no future changes to the ETA, regulations or our interpretative policy affect its validity, and all relevant facts and transactions have been fully disclosed.
EXPLANATION
Generally, most supplies of property and services made in Canada are taxable for GST/HST purposes, unless they are exempt supplies. Exempt supplies are listed in Schedule V. Part II of Schedule V provides that certain health care services are exempt from GST/HST. In order for a supply of property or a service to be exempt from GST/HST under Part II of Schedule V, a specific exempting provision included in Part II must apply to that particular supply.
In addition, it should be noted that the GST/HST is a transactional tax and as such, the exempting provisions in Part II of Schedule V apply on a supply-by-supply basis. These provisions set out specific criteria that must be met in order for a particular supply of a service to fall within those provisions. For every supply or transaction, the supplier must determine whether these criteria are met or whether the tax is applicable. Because of these criteria it is possible for a supplier to make a mix of taxable and exempt supplies and for the tax status of a supply to differ depending on the circumstances. Thus, regardless of the manner in which nursing services may be defined, the tax status of a particular supply of nursing services is also conditional on whether the supply meets all of the criteria set out in the exempting provision, as explained below.
Section 6 of Part II of Schedule V
Section 6 of Part II of Schedule V exempts a supply made after February 26, 2008 (Footnote 1) , of a nursing service rendered to an individual by a registered nurse, a registered nursing assistant, a licensed or registered practical nurse or a registered psychiatric nurse, if the service is rendered within a nurse-patient relationship. Given the preceding, there are three criteria that the supply must meet to be exempt; i.e., it must be a service that:
* is rendered by a registered or licensed nurse;
* falls within the scope of nursing services; and
* is rendered to an individual within a nurse-patient relationship.
Under a transactional tax system such as the GST/HST, exempt status applies to the supply and not to the supplier. Each supply (as provided for under each contract) is evaluated to determine if it is a nursing service rendered by a registered or licensed nurse to an individual within a nurse-patient relationship. This evaluation would include an analysis of the terms and conditions of the relevant contract or agreement for the supply to determine whether the supply satisfies the criteria of section 6 of Part II of Schedule V. Accordingly, regardless of whether an activity may be characterized as a nursing service, the supply of that service must meet all the criteria of section 6 of Part II of Schedule V to be exempt. There criteria are discussed below.
Rendered by a registered or licensed nurse
In your recent letter you advised that the Regulated Health Professions Act, S.O. 1991, c. 18, and the Nursing Act, S.O. 1991, c. 32, contain definitions for nursing services. You expressed the view that the CRA should consider this provincial legislation.
Because of the reference to the specific titles in the exempting provision; i.e., only the services rendered by licensed or registered nurses are exempt, we do consider the provincial legislation of the nursing profession for purposes of administering the ETA. As such, we consider a registered or licensed nurse to be an individual who meets certain standards of education, clinical competence and registration or other licensing requirements as set out by provincial legislation governing the nursing profession.
Since the services in question are supplied in Ontario, we consider the manner in which the nursing profession is regulated by the laws of that province. As you noted, nurses in Ontario are regulated under the Nursing Act and the Regulated Health Professions Act. Regulations under the Nursing Act establish the requirements that must be met for registration as an RN or RPN and titles used by nurses are protected under this Act. These provincial Acts provide the legal framework for nursing as a self-regulating profession. In addition, the College has been delegated the authority under these provincial Acts for the regulation and registration of individuals who are qualified to practice the nursing profession in Ontario.
Scope of nursing services
As noted above, we do consider the manner in which the nursing profession is regulated by provincial laws. Based on a review of the Nursing Act and the Regulated Health Professions Act as well as the College’s standards and guidelines, we understand that the scope of practice for nursing in Ontario is the promotion of health and the assessment of, the provision of care for, and the treatment of, health conditions by supportive, preventative, therapeutic, palliative and rehabilitative means in order for a patient to attain or maintain optimal function. Nurses are authorized to perform various controlled acts when rendering nursing care to their patients. Core nursing services generally focus on the diagnosis and treatment of health problems of a patient, administration of medications and other interventions.
Various Fact Sheets produced by the College set out guidelines for registered nurses to determine whether they are practicing nursing. According to the Fact Sheet entitled What is Nursing?, nursing roles may include clinical, practitioner, administrator, teacher, and researcher. They work in many different settings, including hospitals, long-term care facilities, clients’ homes, clinics, industries, and classrooms.
The Fact Sheet entitled Am I Practicing Nursing? contains a checklist of questions that registered nurses may use to determine if a particular activity they are engaged in falls with the practice of nursing. These questions include whether the activity involves the nurse applying nursing knowledge, skill and judgment and whether the nurse has a direct or indirect effect on the recipient of a health care service in Ontario. As well, there is a list of activities registered nurses would check involving assessment, planning, intervening, evaluating, and other activities, and a list of various settings in which registered nurses undertake these activities, such as in an acute care hospital, a long-term care facility, independent practice, educational institution, and a government agency.
Based on a review of this information and our research, we understand that registered nurses may work in a wide variety of practice settings, be engaged in a variety of activities for which his or her particular knowledge and qualifications may be relevant to the recipient of his or her supplies, and that nursing roles and responsibilities are continually evolving and changing. For instance, registered nurses may perform supervisory, administrative, consultant, teaching and researching activities.
However, it is important to note that even where an activity falls into the practice of nursing, as noted above and further explained below, that activity will not be an exempt supply for purposes of section 6 of Part II of Schedule V where it does not constitute a nursing service rendered to an individual within a nurse-patient relationship.
Some of these activities that would not constitute a nursing service rendered to an individual within a nurse-patient relationship are communicating with communities or populations, managing nursing resources such as staff, facilities and equipment, developing learning resources for nurses or other health care providers, and providing or developing health education for organizations.
Rendered to an individual within a nurse-patient relationship
The reference to “patient” can denote an individual who is experiencing an illness that requires acute or chronic care. A registered or licensed nurse establishes and maintains a nurse-patient relationship by using nursing knowledge and skills to render patient care services involving supportive, therapeutic, palliative and rehabilitative services to assist the patient in attaining or maintaining optimal function, such as treating the health problems of a patient, administering medications and performing other interventions. Thus we interpret this criterion in section 6 of Part II of Schedule V as meaning nursing services that involve personal interaction between a nurse and an individual who is a patient where there is an established or ongoing relationship between the nurse and the patient and the nurse is a direct care provider of the patient.
Accordingly, when a registered nurse, a registered nursing assistant, a licensed or registered practical nurse or a registered psychiatric nurse, renders nursing services to an individual in the capacity of a care provider, i.e., in a professional nurse-patient therapeutic relationship, these nursing services will be exempt.
If the service does not involve a relationship between the registered nurse and the individual and the nurse is not a care provider of the individual, this would indicate that there is no nurse-patient relationship. Accordingly a service provided by a registered nurse will not be exempt for GST/HST purposes even if the service is provided within the scope of a nursing practice if that service is not within the context of a nurse-patient relationship.
Our review of the material produced by the College indicates that people receiving services from registered or licensed nurses are often referred to as “clients” rather than “patients”. For instance, the College states that the term “client” better represents the diverse practices of nurses than “patient”. The College explains that in most circumstances the client is an individual but a client could also include family members and decision-makers of the individual. A client may also be a family, a group, such as in a therapy session or a community, such as in a public health setting. Clients could also include students in an educational setting, staff in an administrative setting, and study participants in a research setting.
Regardless of how broad the scope of a nursing practice may be, it is important to clarify that only those clients who are individuals receiving patient care services would fall within section 6 of Part II of Schedule V. In contrast, services rendered by a registered nurse to communities in a public health setting, students in an educational setting, staff in an administrative setting, and study participants in a research setting would not fall within this particular exempting provision.
Based on the information provided, the services that you supply to your clients would be considered nursing services for purposes of the ETA. You are hired as a registered nurse […]. In providing your services you use nursing knowledge and skills in respect of therapeutic care of your clients within a nurse-patient relationship. Examples of such services that you provide include assessing your clients’ health care needs, counselling clients, providing professional advice, and determining appropriate health care services, treatments and equipment.
It is important to note that not all case management services performed by a registered nurse would be considered to be nursing services for purposes of section 6 of Part II of Schedule V. Services that are administrative in nature as opposed to ones that are in respect of therapeutic care of the client would not be rendered to an individual within a nurse-patient relationship and would not meet the exempting provision of section 6. The determination of whether or not case management services meet the conditions of section 6 is done on a case-by-case basis by examining the types of services being performed and the context in which they are delivered. Accordingly a service provided by a registered nurse of supervising or directing others to provide care to an individual or of providing a case management service will not be exempt for purposes of the GST/HST even if the service is provided within the scope of a nursing practice, if that service does not involve the provision of care by the registered nurse to the individual within a nurse-patient relationship.
Therefore, the fact that a registered nurse might be, because of his or her knowledge, perfectly suited for the role of case manager does not automatically entail that all case management services are nursing services or that they are nursing services rendered to an individual within a nurse-patient relationship.
We also note that you are hired and paid as a registered nurse; in cases where a registered nurse accepts a position in a role other than that of a registered nurse (such as an unregulated care provider) there would not be a nurse-patient relationship and the supplies of the service would not be exempt under section 6 of Part II of Schedule V. The College’s Fact Sheet Working in Different Roles states that a nurse is expected to fulfill only the requirements of the position’s job description and knowing and performing within the limits of that job. This demonstrates that there would not be a nurse-patient relationship when a registered nurse is working in a role other than that of a registered nurse.
In your letter you inquired about the period of 2006 until July 2010 where […] the GST was included in [your fees]. You believe that you should be compensated and state that the GST was coming directly off your hourly wage.
The amount of consideration paid for a supply and whether that amount is tax-included is a private or contractual matter between a supplier and his or her clients. For GST/HST purposes subsections 165(1) and (2) of the ETA state that it is the recipient of the supply who pays the GST/HST. This means that, […], it was your clients who were paying the GST on the consideration for your services rather than the GST coming off the amount you received for your services.
Under subsection 232(1), where you have charged an amount as GST/HST in error on an exempt supply, you have the option to adjust, refund or credit the excess tax to the person within two years after the day the amount was so charged or collected. If you choose to adjust, refund, or credit the excess amount of GST/HST, a credit note containing prescribed information must be issued. You may also make an adjustment to your net tax calculation to account for any adjustment, refund or credit of an amount of tax paid in error to the extent that the amount was included in determining the net tax for the reporting period or a prior reporting period.
If you choose not to adjust, refund, or credit amounts of GST/HST collected in error, you are not required to issue a credit note, and there will be no corresponding adjustment to your net tax. In this situation, the person who has paid the tax in error may be able recover this amount by filing a general rebate application with the CRA within two years after the day the amount was paid or remitted by the person.
For more information, including the prescribed information to be included on a credit note, please refer to GST/HST Memoranda Series 12.2, Refund, Adjustment, or Credit of the GST/HST Under Section 232 of the Excise Tax Act, available on CRA's website.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-954-4395. 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,
Arthur Blommesteijn
Municipalities and Healthcare Services Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
FOOTNOTES
1 To be exempt under section 6 of Part II of Schedule V, a supply made before February 27, 2008 has to be a supply of a nursing service rendered by a registered nurse, a registered nursing assistant, a licensed or registered practical nurse or a registered psychiatric nurse, where the service is rendered to an individual in a health care facility or in the individual’s place of residence; the service is a private-duty nursing service; or the supply is made to a public sector body.
Email this Content