Please note that the following document, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence.
XXXXX
XXXXX
XXXXX
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
Case Number: 116571
Business Number: XXXXX
August 5, 2010
Dear XXXXX:
Subject:
GST/HST RULING
Services of Medical and Research Assistant
This is in reply to your XXXXX, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to your services supplied as a sole proprietor to a medical doctor, XXXXX.
HST applies at the rate of 15% in Nova Scotia, 13% in New Brunswick, Newfoundland and Labrador, and Ontario, and 12% in British Columbia. GST applies at the rate of 5% in the remaining provinces and territories.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
Statement of Facts
On the basis of your XXXXX and the information you filed with the Canada Revenue Agency, our understanding of the facts is as follows:
1. You are a sole proprietor who was registered for GST/HST purposes effective XXXXX.
2. You were hired by a medical doctor as an independent contractor to provide medical and research assistant services.
3. Your services are not paid for by a provincial health insurance plan.
4. Your services are not rendered within the practice of a regulated health care profession that is listed in Part II of Schedule V. iFootnote 1 For instance, you are not a "medical practitioner" or "practitioner" as those terms are defined in the ETA.
5. You are an annual filer for GST/HST purposes. XXXXX.
6. Your services are performed in the province of Ontario.
Ruling Requested
You would like to know whether your supplies of medical and research services provided to a medical practitioner are exempt under the ETA.
Ruling Given
Based on the facts set out above, we rule that your supplies of medical and research services provided to a medical practitioner are not exempt services and are therefore taxable pursuant to section 165. As your supplies are made in Ontario, the consideration charged for your supplies is subject to the HST at the rate of 13%.
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
When there is an agreement to provide specific goods and services in exchange for money, the money constitutes consideration for a supply unless the agreement could be classified as a contract for employment. We were given to understand that you do not provide the services in question under a contract for employment. Rather you are a sole proprietor working as an independent contractor.
It is important to clarify at the outset that as an independent contractor you are a separate supplier for GST/HST purposes. The GST/HST is a transactional tax system based on the concept of persons making supplies. Under this system, your services constitute a supply made to a medical practitioner that is distinct from any supply made by the medical practitioner. As such, the characterization and tax status of your supplies are evaluated separately from the supplies made by the medical practitioner.
Generally, most goods and services supplied in Canada are taxable for GST/HST purposes. Exceptions to this rule include certain health care services rendered within health care professions listed in Part II of Schedule V which are exempt when they are rendered to individuals. The exempting provisions are based on the extent that these services are covered by provincial health insurance plans as well as the provincial regulation of health care professions.
If a service is not included in the list of exemptions, then the supply of the service is taxable and the result is that the value of the consideration charged for the supply is subject to the GST/HST. Sections 221, 225 and 228 of the ETA generally provide that registrants who make taxable supplies shall collect and remit the tax (net of input tax credits and applicable adjustments).
Your services are not paid for by a provincial health insurance plan. You do not render your services within the practice of a regulated health care profession that is listed in Part II of Schedule V and your services are not health care services rendered to an individual. Rather, you are providing services as a medical and research assistant to a medical practitioner.
Please note that under the GST/HST system, the exemption that may apply to the supplies made by a medical practitioner does not necessarily extend to the medical and research services you supply to the medical practitioner. As the medical and research services you supply to a medical practitioner as a sole proprietor are not included in the list of exemptions in Schedule V your services are taxable supplies. Pursuant to section 221, you are required to collect the tax payable under Division II of the ETA by the medical practitioner, who is the recipient of your taxable supplies.
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,
Chantal Desrosiers
Municipalities and Health Care Services Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
i 1. The health care professions listed in Part II of Schedule V are: medical practitioners (physicians and dentists); practitioners (optometrists, chiropractors, physiotherapists, chiropodists, podiatrists, osteopaths, audiologists, speech-language pathologists, occupational therapists, psychologists, and midwives); registered nurses; registered nursing assistants; licensed or registered practical nurses; registered psychiatric nurses; dieticians; social workers; and dental hygienists.
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UNCLASSIFIED
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