Tax Court Confirms MedSleep’s 80/20 Fee-Sharing Agreement with Physicians Valid for GST/HST Purposes

• MedSleep operated sleep clinics in five provinces, receiving referrals for patients with suspected sleep disorders.
• Patients completed a questionnaire and underwent overnight examination at MedSleep clinics.
• MedSleep collected fees from provincial health plans and had fee-sharing agreements with sleep physicians.
• The Tax Court of Canada confirmed the validity of these agreements for GST/HST purposes.
• The court rejected the claim that MedSleep’s 20 percent share was taxable for administrative services.
• The agreements were deemed valid despite provincial laws on physician payments.
• MedSleep and sleep physicians provided interconnected health care services.
• Services were exempt under ETA as institutional health care services.
• Sleep physicians were not considered recipients of services from MedSleep.

Source: taxinterpretations.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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