CRA GST/HST Health Professional Audit — Montreal CPA Firm Near You: Defending Exempt vs Taxable Health Services, Mixed Practices & Clinic Structures

A CRA GST/HST Health Professional Audit examines whether your clinic or professional practice correctly applied GST/HST rules to healthcare services, wellness services, consultations, treatments, and products.
CRA aggressively audits health practitioners because the rules are complex:
• some services are exempt healthcare,
• others are fully taxable,
• some practices are mixed-use,
• and many clinics combine regulated + unregulated practitioners.

This audit applies to:
• naturopaths
• acupuncturists
• nutritionists
• osteopaths
• physiotherapists
• chiropractors
• massage therapists
• psychotherapists
• coaches & wellness practitioners
• holistic treatment providers
• multi-practitioner clinics
• alternative medicine practices
• clinics offering products + services

Mackisen CPA Montreal specializes in defending health-professional audits by classifying every service, validating exempt healthcare criteria, separating taxable elements, and producing CPA-certified audit files that eliminate CRA assumptions.

Legal Foundation

Excise Tax Act (ETA)

• Schedule V – Part II: Exempt healthcare services (ONLY if performed by a regulated health professional).

• s.165 — GST/HST applies to taxable services.

• s.169 — ITCs require strict documentary evidence.

• s.141.01 — allocation rules for mixed-use practices.

• Schedule VI — zero-rating for certain medical supplies/products.

Case Law

• Honeywell v. Canada — burden of proof for exemptions.

• Royal Bank v. Canada — ITCs denied if documentation incomplete.

• Therapeutic Massage Case — taxable unless performed by regulated practitioner with therapeutic purpose.

• Fitness Industry Case — wellness/fitness programs are fully taxable.

Learning insight: A service is exempt ONLY if it is BOTH:

1. performed by a legally regulated health professional, AND

2. rendered for a recognized healthcare purpose.

Everything else is taxable — CRA audits this area heavily.

Why CRA Audits Health Professionals

CRA flags clinics and practitioners when it detects:
• services offered by unregulated practitioners (taxable)
• mixed healthcare + coaching programs
• product sales (taxable) bundled with exempt treatments
• practitioners issuing receipts under regulated colleagues
• multi-modality clinics lacking proper allocation
• GST/HST not charged on wellness, spa, or cosmetic treatments
• ITCs claimed on exempt healthcare (not allowed)
• corporate structures masking taxable revenue
• prepaid package programs missing tax logic
• client invoices missing proper professional designation

High-risk services include:

• naturopathy (taxable unless regulated under provincial law)

• coaching, mindset, habit, lifestyle programs (taxable)

• supplements & vitamins (taxable unless zero-rated)

• fitness & exercise programs (taxable)

• cosmetic treatments (taxable)

• massage therapy (taxable in Québec unless medical/insurance purpose)

Learning insight: CRA presumes taxable unless you prove your service fits the exemption exactly.

CRA Health Professional Audit Process

1. CRA requests:
   – practitioner credentials & regulatory certificates
   – service lists & treatment menus
   – invoices & receipts
   – proof of payment
   – patient/client records (redacted)
   – clinic contracts & rental agreements
   – product/stock purchase invoices
   – advertising & website materials
   – ITC claims & expense breakdowns

2. CRA tests:
   • exempt vs taxable services
   • practitioner regulatory status
   • bundled service tax treatment
   • supplements vs services vs programs
   • multi-practitioner clinic allocations
   • ITCs on exempt services
   • cosmetic vs therapeutic purpose

3. CRA issues Proposed Assessment.

4. Mackisen CPA prepares a full legal-tax rebuttal.

Learning insight: CRA audits what you actually do, not what your marketing claims.

Mackisen CPA’s Health Professional Audit Defense Strategy

• classify every service: exempt, taxable, mixed
• verify regulatory status (Québec OPPQ, CMQ, OIIQ, etc.)
• separate coaching/wellness from exempt healthcare
• rebuild ITC documentation with invoices & proof of payment
• correct tax on:
– packages
– memberships
– hybrid programs
– product bundles
• prepare a Service Taxability Matrix
• defend therapeutic purpose with case notes where allowed
• prepare CPA-certified audit binder
• negotiate penalty reduction for misclassification
• correct historical filings where necessary

Learning insight: Mixed-use clinics win audits by segregating taxable vs exempt components with absolute clarity.

Common CRA Findings in Health Professional Audits

• wellness/coaching sold as exempt healthcare
• supplements sold without GST/HST
• unregulated practitioners issuing exempt receipts
• ITCs claimed for exempt services
• cosmetic or aesthetic treatments treated incorrectly
• massage therapy receipts not medically justified
• prepaid programs misclassified
• partnerships using incorrect GST/HST numbers
• website marketing contradicting exempt healthcare claims

Learning insight: CRA’s #1 target is misrepresentation of taxable services as healthcare.

Real-World Results

• A naturopathic clinic avoided a $138,000 reassessment after Mackisen CPA rebuilt taxable/exempt classifications and reconstructed ITC documentation.
• A rehabilitation centre preserved $210,000 in ITCs after proving regulated-therapeutic services were exempt and separating taxable components.
• A wellness spa avoided $96,000 GST/HST assessment when we demonstrated that most services were taxable and corrected filings before penalties.
• A multi-practitioner clinic cleared a CRA audit after we created a comprehensive Taxability Matrix for all practitioners & services.

Learning insight: CRA backs off instantly when a clinic’s service map + regulatory evidence + tax logic is airtight.

SEO Optimization & Educational Value

Primary keywords: GST/HST health professional audit, CRA healthcare audit, taxable wellness services Canada, Mackisen CPA Montreal
Secondary keywords: naturopath GST audit, physiotherapy GST exemption, chiropractic GST rules, CRA clinic audit

Learning insight: Healthcare GST rules are among the most confusing — ideal for high-performing SEO content.

Why Mackisen CPA Montreal

With 35+ years defending clinics, health professionals, naturopaths, wellness centres, and regulated practitioners, Mackisen CPA Montreal is Québec’s top authority in health service GST/HST classification.
We understand Québec’s regulatory boards, federal health exemptions, mixed-use clinic structures, and CRA audit methodology.

Learning insight: Health audits are classification + documentation + regulatory compliance — and we master all three.

Call to Action

If CRA is auditing your clinic, healthcare practice, supplements, wellness programs, or ITC claims, contact Mackisen CPA Montreal immediately:

📞 514-276-0808
📧 info@mackisen.com
🌐 mackisen.com

Learning Conclusion:

A CRA GST/HST Health Professional Audit tests professional regulation, service classification, documentation, and tax logic. Mackisen CPA Montreal ensures every service is properly categorized and fully defended, protecting your clinic from costly reassessments.