For medical practitioners, interpreting the appropriate tax obligations attached to seeing patients can often be confusing. This can be especially true surrounding the application of Goods and Services Tax, where certain patient scenarios can require the need to charge GST.
Whilst most services provided by a medical or allied health practitioner are deemed to exclude GST in their pricing, a clinic will likely have a GST scenario in one form or another, in which the tax obligation arises.
We have highlighted the areas in which a medical service is considered to exclude GST, as well as the circumstances requiring GST to be added.
Where Medical Services are Considered to be GST Free
Generally, the provision of medical services issued to a patient is deemed not to include Goods & Services Tax. As such, healthcare services exempt from the levy are typically defined as those which attract a Medicare benefit.
A medical service may also be considered GST free, even where a Medicare benefit is not payable, where it is covered/paid-for by the National Disability Insurance Scheme (NDIS), private health insurance, or Worker's Compensation.
Similarly, where a medical clinic/practitioner is treating a patient via contracting with an insurer, operators of a statutory compensation scheme (i.e. following a workplace accident), a compulsory third-party to settle health insurance claims, or an Australian Government agency, patient services are considered to be exempt from GST.
The exemption from GST on the services described above also extends under legislation to Allied Health practitioners.
Where Medical Services are not Considered to be GST Free
It is important to note certain circumstances where medical services provided by a clinic or practitioner are to include GST. Where a clinic provides health services such as non-essential cosmetic procedures, these procedures are subject to tax obligations, with the business required to charge GST.
Likewise, medical services may be subject to GST obligations where services are conducted on behalf of a business. These services predominantly arise in instances where pre-employment medical assessments are required at the request of an employer. GST is to be included in this service of seeing the patient, as a result of the medical clinic contracting to the business requesting the pre-employment check, and not for treating the patient privately.
Furthermore, another scenario where GST may be included in medical services, surrounds the provision of medical reports. Where a medical report is formed and conducted at the request of a third-party (i.e. for an insurance company or solicitor), GST for the service applies.
For More Information
For medical professionals looking to gain greater clarity on GST scenarios surrounding patient services, please contact the adviser team at Archer Gowland Redshaw on (07) 3002 2699 | info@agredshaw.com.au.
Additionally, to understand how Archer Gowland Redshaw can assist your medical practice across Accounting & Business Advisory solutions, find more information via our Medical & Allied Health service on our website.
%20-%20HubSpot.png)
