Ocean Mist

Posted by Tax Consultants

Naturopathic and Acupuncture

GST ALERT – Naturopathic and Acupuncture Services are now Exempt

After extensive consultations with alternative health care professionals across Canada, the Department of Finance reversed the taxable status of naturopathic and acupuncture services.   Effective Budget Day, February 11, 2014, certain of these services are now treated as GST-exempt Health Care Services.The good news – Naturopaths and Acupuncturists across Canada seem elated with the removal of GST/HST from their fees.  (But not all revenues are affected.)  mk change

The real impact –This significant change will seriously impact operating costs.  It also appears that some previously claimed Input Tax Credits (ITCs) could be clawed back and will remain a CRA audit assessment risk for up to four years. If service fees are not increased, the profitability of these businesses will suffer.

We understand that many practitioners have continued to collect GST while awaiting clarification from their professional associations.  In the meantime, GST/HST collected must be remitted to CRA.  However, ITCs will be denied.