How To Reduce Your GST Burden

Unlike most businesses, dentists are restricted from claiming input tax credits (ITCs) to recover the GST paid on their business purchases. For that reason, it is important that dentists do not absorb, as costs of doing business, more GST payable than is necessary. Two 2006 Tax Court of Canada cases illustrate certain opportunities available to dentists to reduce the GST burden. Realizing these savings should translate into increased incomes.

Obviously it is important for dentists to correctly evaluate the GST status of their "supplies" as either taxable (subject to 6 percent GST) or as exempt or zero-rated (no GST), in order to correctly charge, collect, and remit GST. Also important, but less obvious, is the impact that the GST status of "supplies" has in determining the extent to which dentists can claim ITCs. In particular, only taxable and zero-rated, but not exempt, supplies can give rise to ITC claims.