What HST rebate can my Ontario dental practice claim?
Most dental services (medical services, exempt supplies under ETA Schedule V, Part II) are HST-exempt, meaning the dental practice cannot claim ITCs on the HST embedded in its overhead. However, HST on the taxable portion of the practice (cosmetic dentistry not covered by ETA Sch V, retail product sales, some corporate rent arrangements) is recoverable proportionally under ETA s. 141.01.
Section 141.01 apportionment. If a business makes both taxable and exempt supplies, ITCs are allowed only on the extent inputs are used to make taxable supplies. Dental practices generally track the taxable portion (cosmetic, whitening, retail product sales) and claim a proportional slice of ITCs on shared overhead.
Example: an Ontario DPC has $800,000 revenue: $760,000 is exempt (routine cleanings, restorative, orthodontic – covered by ETA Sch V Pt II s. 5); $40,000 is cosmetic whitening classified as non-medical (taxable at 13% HST). Taxable portion is 5%. On $30,000 of shared overhead HST paid (rent, utilities, cleaning supplies), the DPC can claim 5% x $30,000 = $1,500 as an ITC on the GST34.
Note the Public Service Bodies rebate (ETA s. 259) does not apply to for-profit dental practices; it is available only to non-profits, charities, and public bodies. A dental practice cannot claim the 83% rebate that a hospital claims.
Practical: separately track cosmetic vs medical revenue lines from day 1. Use a class-based coding system in your practice management software so the HST return line 108 calc is defensible.
Note: Dentures and dental hygiene supplies sold retail to patients are usually zero-rated (ETA Sch VI, Part II). Zero-rated is different from exempt – zero-rated sales give full ITC recovery. Track them separately.
Source: canada.ca â Health care services and GST/HST
— Bader A. Chowdry, CPA, CA, LPA — Insight Accounting CPA
Disclaimer: Bader A. Chowdry, CPA, CA, LPA is a Licensed Public Accountant regulated by CPA Ontario. Insight Accounting CPA Professional Corporation is a Chartered Professional Accountant firm. This content is general information only and does not constitute professional advice for your specific facts. Confirm current rules and figures with your own advisor before acting.