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.
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5XXXXX
XXXXX
XXXXX
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XXXXX
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Case Number: 60395September 25, 2006
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Subject:
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Independent Medical Examinations and Other Independent Assessments
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Dear XXXXX:
The purpose of this letter is to advise you that the Canada Revenue Agency has just released Policy Statement P-248, The application of the GST/HST to the supply of an independent medical examination ("IME") and to other independent assessments.
The policy statement can be found under the GST/HST Policy Statements link at (http://www.cra-arc.gc.ca/menu/GTPP_200-e.html) on the Canada Revenue Agency ("CRA") Web site. The policy represents a change in the CRA's position with respect to the application of the Goods and Services Tax ("GST")/Harmonized Sales Tax ("HST") to sections 5 and 7 of Part II of Schedule V to the Excise Tax Act (the "ETA") and it describes the circumstances under which IMEs and other independent assessments will be exempt from the GST/HST under these provisions as well as section 2 of that Part.
The effective date of the policy is June 8, 2001, which is the date the Tax Court of Canada issued its decision regarding Riverfront Medical Evaluations Ltd. v. Canada ("Riverfront"). The policy is based on careful consideration of the Tax Court of Canada and Federal Court of Appeal decisions in Riverfront, the exemptions in the ETA that apply to supplies made by medical practitioners and practitioners, as well as the information provided by stakeholders on the issue.
In situations where the CRA has issued specific interpretations that differ from this policy, the policy should be applied to the affected person(s) on the earlier of the day the CRA has made the public aware of this policy or informs the person(s) in writing of the application of the tax to their transaction(s). However, the CRA may apply the policy retroactively, where this would be beneficial to a person and the person asks that the policy be applied retroactively.
Sections 5 and 7 of Part II of Schedule V to the ETA exempt from GST/HST certain supplies made by a "medical practitioner" and a "practitioner", as those suppliers are defined in section 1 of that Part. In particular, section 5 exempts a supply made by a medical practitioner of a consultative, diagnostic, treatment or other health care service rendered to an individual. In addition, section 2 of that Part exempts a supply made by the operator of a "health care facility" of an "institutional health care service" if the service is rendered to a patient or resident of the facility. The ETA defines "health care facility" and "institutional health care service" for purposes of that Part. Please refer to Policy Statement P-248 for an explanation of the application of these exempting provisions to supplies of IMEs and other independent assessments when made by the operator of a health care facility, a medical practitioner, or by a practitioner.
You had provided comments XXXXX regarding the application of section 5 of Part II of Schedule V to the ETA to supplies made by the operator of a health care facility, where no examination or opinion relating to an IME is rendered to a patient at the supplier's facility. You indicated that although section 2 of this Part does not apply to the operator's supply, the supply should be exempt under section 5.
The nature of a value-added tax and the conditions that apply to the exemptions in the ETA for specific supplies is that the tax status of a service may vary depending on the supplier. As noted above, section 5 of Part II of Schedule V to the ETA applies to certain supplies made by a "medical practitioner" as defined in the ETA; i.e., a person authorized under the laws of a province to practise the profession of medicine or dentistry. A supply made by other persons cannot fall within this exempting provision notwithstanding that an element of that supply may include physician's services, as these persons do not meet the legislative criterion of being a "medical practitioner". The operator of a health care facility is a separate legal entity and its status as a supplier and the tax status of its supplies are evaluated separately from the persons that it subcontracts with in the course of making its supplies.
If you require additional information, please call me directly at (613) 952-6761.
Yours truly,
Susan Eastman
Municipalities and Health Care Services Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
2006/09/21 — RITS 60398 — Independent Medical Examinations and Other Independent Assessments