GST/HST Notice 312 Proposed GST/HST Treatment of Supplies of Human Ova and In vitro Embryos May 2019

Effect of zero-rating on importations

The first proposed amendment to the Act would add, under section 6 of Part I of Schedule VI to the Act, the supply of an ovum, as defined in section 3 of the Assisted Human Reproduction Act, to the list of drugs and biologicals that are zero‑rated for GST/HST purposes. Consequently, the importation of an ovum would be considered a non‑taxable importation for GST/HST purposes under section 6 of Schedule VII to the Act and therefore no longer subject to tax. Similarly, an ovum brought into a participating province from a non-participating province, or from another participating province for which the rate of the provincial part of the HST is lower, would be considered non-taxable property for GST/HST purposes under section 15 of Part I of Schedule X to the Act and therefore no longer subject to self-assessment for the provincial component of the HST, or part thereof.

Meaning of “ovum”

As defined in section 3 of the Assisted Human Reproduction Act, ovum means a human ovum, whether mature or not.

Treatment of the subject supplies before amendments passed

[S]uppliers can stop charging GST/HST on supplies of human ova in accordance with the proposed amendment as of March 20, 2019. … [C]onsistent with its standard practice, the CRA is administering this measure on the basis of the proposed amendment [and similarly re embryos]

If the proposed amendment becomes law, you may then contact the supplier, who may choose to adjust the amount charged, or refund or credit the amount collected. If so, the supplier must provide you with a credit note for the amount. Alternatively, you can file a rebate claim with the CRA for the amount paid in error … . However, the CRA cannot pay a rebate for an amount paid in error as or on account of tax until the proposed amendment becomes law.

A supplier who has charged or collected GST/HST on human ova supplied after March 19, 2019, must include that amount in the calculation of their net tax on their GST/HST return, and remit that net tax if there is a balance owing, according to the regular rules.

Assimilated to single supply at fertility clinic of institutional health care service

Where a patient of a fertility clinic or other health care facility undergoes treatment or other service at the clinic which includes the implantation of a human donor ovum or the transfer of an in vitro embryo, the CRA considers that the supply of the human donor ovum or in vitro embryo made by the clinic to the patient in these circumstances would generally be part of an exempt supply of an institutional health care service.

Importation of embryos “no longer subject to tax”

The second proposed amendment would add, under section 13 of Schedule VII to the Act, the importation of in vitro embryos, as defined in section 3 of the Assisted Human Reproduction Act, to the list of non-taxable importations set out in Schedule VII to the Act. As a result, the importation of in vitro embryos would no longer be subject to tax. Similarly, the third proposed amendment would provide, under section 27 of Part I of Schedule X to the Act, relief of the provincial component of the HST or part thereof on bringing in vitro embryos into a participating province from a non-participating province or from another participating province for which the rate of the provincial part of the HST is lower.

Meaning of “embryo” and “in vitro embryo”

As defined in section 3 of the Assisted Human Reproduction Act, an embryo means a human organism during the first 56 days of its development following fertilization or creation, excluding any time during which its development has been suspended, and includes any cell derived from such an organism that is used for the purpose of creating a human being. …

As defined in section 3 of the Assisted Human Reproduction Act, an in vitro embryo means an embryo that exists outside the body of a human being.

Treatment of the subject supplies before amendments passed

[C]linics and donor banks are not liable to pay GST on the importation of in vitro embryos after March 19, 2019. … However, consistent with its standard practice, the Canada Border Services Agency is administering this measure on the basis of the proposed amendment.

Assimilated to single supply at fertility clinic of institutional health care service

Where a patient of a fertility clinic or other health care facility undergoes treatment or other service at the clinic which includes the implantation of a human donor ovum or the transfer of an in vitro embryo, the CRA considers that the supply of the human donor ovum or in vitro embryo made by the clinic to the patient in these circumstances would generally be part of an exempt supply of an institutional health care service.

A proposed GST/HST amendment would zero-rate the supply of an ovum – which would have the effect of rendering the importation of an ovum as a non‑taxable importation. A further amendment will add the importation of in vitro embryos to the list of non-taxable importations.

Respecting the application of the ovum amendment, for example, CRA indicates:

[S]uppliers can stop charging GST/HST on supplies of human ova in accordance with the proposed amendment as of March 20, 2019. … [C]onsistent with its standard practice, the CRA is administering this measure on the basis of the proposed amendment [and similarly re

… However, the CRA cannot pay a rebate for an amount paid in error as or on account of tax until the proposed amendment becomes law.

A supplier who has charged or collected GST/HST on human ova supplied after March 19, 2019, must include that amount in the calculation of their net tax on their GST/HST return … .

Where a patient of a fertility clinic or other health care facility undergoes treatment or other service at the clinic which includes the implantation of a human donor ovum or the transfer of an in vitro embryo, the CRA considers that the supply of the human donor ovum or in vitro embryo made by the clinic to the patient in these circumstances would generally be part of an exempt supply of an institutional health care service.