Important GST/HST Update For Dentists

After more than 30 years, the Canada Revenue Agency ("CRA") is revoking an administrative arrangement with the Canadian Dental Association that simplified claiming input tax credits ("ITCs") for GST/HST registered dental practitioners who make both taxable zero-rated supplies (e.g., orthodontic appliances and cosmetic services) and tax-exempt supplies (e.g., dental and orthodontic services).

Per CRA Notice 339, the CRA is revoking its administrative arrangement as it moves towards a stricter adherence to the rules in the Excise Tax Act ("ETA") – likely requiring more detailed records.

This shift appears to be a response to recent Court decisions holding that supplies of orthodontic appliances and orthodontic services are separate supplies – opening up the ability to claim ITCs (which we have written about here).