Two practitioners work in the same BC clinic. Both are regulated health professionals. Their patients walk through the same door and may even receive treatment for the same injury.
One practitioner charges GST. The other does not.
Both can be correct.
This surprises people because the logic seems like it should be simple: regulated health professionals provide health care, health care is exempt, done.
But that is not the rule.
For GST purposes, being regulated does not automatically make a service exempt. The legislation looks at the particular service being supplied, who provides it, who receives it and whether the conditions for a health-care exemption have been met.
That gap between what feels like health care and what the legislation actually exempts can create real bookkeeping problems for wellness practices.
The rule is narrower than “regulated health professional”
Certain qualifying health-care services are specifically exempt under Part II of Schedule V to the federal Excise Tax Act.
Physiotherapy is one example. When the statutory conditions are met, a physiotherapist’s professional treatment of an individual is generally exempt from GST/HST.
Other listed services can also qualify, but appearing on the list is only the beginning. The nature and purpose of the service still matter. A service supplied for a cosmetic purpose, for example, may not receive the same treatment as care provided to maintain health, prevent disease, or treat an injury or disorder.
The federal list can change. Psychotherapy and counselling therapy services were added effective June 20, 2024, but those exemptions also come with conditions concerning the service and practitioner.
The practical rule is not “health professional equals exempt.”
It is: does this particular supply meet a specific exemption?
The GST issue clinics should watch
As of June 2026, massage therapy is not listed as its own exempt practitioner service under Part II of Schedule V to the Excise Tax Act.
Registered massage therapists are regulated in BC, recognized by insurers, and commonly work alongside physiotherapists, chiropractors and other practitioners whose qualifying services may be exempt.
Everything about the day-to-day work can make massage therapy look as though it should receive the same tax treatment.
It does not.
A standalone supply of massage therapy by an RMT is generally taxable unless another specific relieving provision applies. If the RMT is registered for GST/HST, they generally charge 5% GST on massage therapy supplied in BC.
An RMT who treats the service as exempt without confirming the rule is not simply saving patients money. They may be creating a liability. If GST should have been collected, the CRA can assess the practitioner for that amount even when it was never charged to the patient. Interest and possible penalties can make the mistake more expensive.
By then, collecting the missing tax from former patients may be impossible.
The threshold still matters
Taxable does not necessarily mean that every RMT must begin charging GST from their first appointment.
For most sole practitioners, the small-supplier rules determine when registration becomes mandatory. The general threshold is $30,000 of worldwide taxable supplies, including zero-rated supplies. Revenue from genuinely exempt supplies is not included in the same way.
There are two tests to watch:
- Exceeding $30,000 in a single calendar quarter.
- Exceeding $30,000 across four consecutive calendar quarters.
The effective registration and collection dates differ depending on which test is triggered. Associated persons or businesses can also affect the small-supplier calculation.
A qualifying small supplier may register voluntarily. Once registered, however, the practitioner takes on the related obligations, including charging GST on taxable supplies, filing returns and maintaining appropriate records.
This is why the threshold should be tracked continuously. It is not something to calculate from memory after year-end.
Mixed practices are where the books break
A clinic offering only one type of service has a relatively simple tax picture.
Most real clinics are not that tidy.
A multidisciplinary practice might collect payment for:
- Exempt physiotherapy treatment.
- Taxable massage therapy.
- Exempt counselling or psychotherapy that meets the applicable conditions.
- Taxable workshops or classes.
- Retail products and supplements.
- Room rent, administrative charges or other services.
- Gift cards used across several of those categories.
Now the books have to preserve distinctions that the bank deposit cannot see.
A single Jane App, Square or merchant-processor payout may contain exempt treatment, taxable massage, product sales, tips, refunds, processing fees, and GST collected. By the time the net amount reaches the bank, the tax story has already happened upstream.
Recording the deposit as one line of clinic revenue can hide that story.
The bookkeeping system needs separate revenue accounts for taxable and exempt activities, a separate GST liability, and a reliable way to reconcile platform activity with the amount deposited. Mixed purchases and shared expenses may also need to be allocated between commercial and exempt activities.
Without that structure, the clinic is more likely to make errors in either direction: collecting tax where it should not or failing to collect it where it should.
One creates unnecessary cost and awkward patient conversations. The other creates a liability.
Exempt is not necessarily better
Practitioners sometimes assume that exemption is the favourable result. It certainly makes the patient invoice simpler, but it comes with a trade-off.
A business making exempt supplies generally cannot claim input tax credits for GST/HST paid on expenses used to provide those exempt services.
A GST-registered RMT making taxable supplies may generally claim input tax credits for GST paid on eligible expenses used in that commercial activity. A physiotherapist providing exempt treatment generally cannot claim the same credits for expenses related to the exempt practice.
A mixed clinic may need to allocate shared costs. Rent, software, equipment and administrative expenses can support taxable activities, exempt activities or both. The appropriate GST treatment depends on that use.
So the line between taxable and exempt determines more than what appears on the patient’s receipt. It also affects what the practice may recover and how expenses should be recorded.
Neither side is automatically better. More importantly, the business does not get to choose the answer based on which treatment is more convenient.
What this means for your books
You do not need to memorize the Excise Tax Act. You need two things.
First, a reliable determination of which services and products are taxable and which qualify for an exemption. If your practice offers several types of care, sells products or operates through multiple practitioners, that deserves a proper review rather than an assumption.
Second, you need books that preserve those distinctions. Taxable revenue, exempt revenue, retail sales, GST collected, practitioner payouts and shared expenses should not be compressed into a single clinic-income category.
Get those pieces in place and GST stops being a quarterly reconstruction exercise. The return follows from records that already reflect what happened.