New GST/HST changes for osteopaths

/
 

Time to read: 2 minutes

What’s changed?

The CRA has released new guidance on how GST/HST applies to osteopathy. Essentially, only services provided by osteopathic physicians registered with their province’s College of Physicians and Surgeons are exempt. Services performed by the vast majority of osteopaths in Canada who aren’t regulated by their province, will not be considered GST/HST exempt - meaning these are considered taxable sales.

Keep in mind, this doesn’t apply to other regulated practitioners who deliver services similar to osteopathy that are within the scope of that profession.

What does this mean for you?

If you are an osteopath or manual osteopath, GST/HST may apply to your services (unless you’re an osteopathic physician… aka you’re also a physician). Confusingly, that doesn’t necessarily mean you have to charge GST/HST right away.

Remember, to charge GST/HST, two criteria must be met:

  1. You must be providing a taxable good or service - The CRA’s new guidance means osteopathic services provided by a non-physician are considered taxable services, so this is met

  2. You must be registered for GST/HST - You’re required to register for GST/HST once you have $30,000 of taxable sales in a 12-month period, but you can voluntarily register for GST/HST anytime (as long as you have some amount of taxable sales)

You may want to voluntarily register for GST/HST. While you’ll have to start charging your patients GST/HST, it means you’ll get a refund of the GST/HST you pay on your expenses - which lowers your costs.

Clinic owners, if you’re registered for GST/HST, then you’ll need to charge your patients GST/HST on osteopathic services provided at your clinic.

Is this good news?

Maybe - but it’s definitely not all bad news. While your patients will have to start paying GST/HST, which may hurt your revenue (money coming in), your costs of doing business will decrease. Once you register for GST/HST, you’ll receive a refund of the GST/HST paid on your business expenses. It’s up to you what to do with that reduction in your expenses - you can either keep that as profit for yourself, or use it to reduce your pricing.

Where do things go from here?

In general in Canada, the Department of Finance will consider making a health care service exempt if it’s regulated in at least five provinces and the move has the broad support of the profession. In the future, if/when osteopathy (delivered by non-physicians) sees more regulation in Canada, there may be a path to making these services GST/HST exempt again - similar to what acupuncturists, naturopaths, etc. have experienced.

Do you have any questions? How do you feel about the news? Let us know in the comments, or get in touch with us!