25 February 2004 GST/HST Interpretation 49936 - Independent Medical Evaluations Discussion Paper

Please note that the following documents, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ces documents, bien qu'exacts au moment émis, peuvent ne pas représenter la position actuelle de l'Agence.

Dear XXXXX:

Thank you for your letter XXXXX regarding the Canada Revenue Agency's discussion paper entitled "The Application of the GST/HST to Independent Medical Evaluations and other Independent Assessments", which was released in draft form for public consultation. Please note that we extended the consultation period to April 30, 2004.

At this time, the information contained in the document with respect to sections 5 and 7 of Part II of Schedule V to the Excise Tax Act ("ETA") is for discussion purposes only. As such, supplies of independent medical evaluations ("IMEs") made by medical practitioners and other independent assessments supplied by other practitioners presently do not fall within either of sections 5 or 7 and are considered to be taxable supplies. Therefore, medical practitioners should continue to charge the Goods and Services Tax ("GST") / Harmonized Sales Tax ("HST") on their supplies of IMEs.

However, the Tax Court of Canada, in Riverfront Medical Evaluations Ltd. v. the Queen, concluded that Riverfront's supplies of IMEs fall within the exemption provided for in section 2 of Part II of Schedule V to the ETA. Consequently, supplies made under the same circumstances as those described in the Tax Court of Canada's decision are exempt supplies.

Following the consultation period, we will evaluate the position proposed in the discussion paper, specifically, the application of sections 5 and 7 to the supply of IMEs and other independent assessments. You will be advised of the final decision in this matter, as well as clarify the issue raised in your letter.

Should you have any further questions, please contact me at (613) 952-6761.

Yours truly,

Susan Eastman
Municipalities and Health Care Services Unit
Public Service Bodies and Governments Division