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Edited version of private advice
Authorisation Number: 1051839835861
Date of advice: 21 May 2021
Ruling
Subject: GST and medical services
Question 1
Is the supply of specialist medical services by you to your patients GST-free pursuant to section 38-7 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?
All further legislative references are to the GST Act unless stated otherwise.
Answer
Yes, the supply of specialist medical services by you to your patients is GST-free under section 38-7 as it is a medical service for which Medicare benefit is payable.
The Licence Agreement you have entered into with the clinic grants you a non-exclusive licence to use the Licenced Area. Further, the clinic is obliged to provide you with General Services, Information Technology Services and Practice Support Services.
As such, under the Licence Agreement you are considered to be contracting the clinic to provide you with rooms and administrative services you require to run your medical practice.
The supply the clinic makes to you under the Licence Agreement is separate from the supply of medical services you make to your patients.
This ruling applies for the following period:
1 January 20XX to 30 June 20XX
Relevant facts and circumstances
• You have an ABN and have been registered for GST since 20XX.
• You lodge your GST returns annually.
• You are a specialist doctor.
• Medicare benefit is payable on the specialist medical services that you provide to patients.
• You and the clinic have signed a Licence Agreement for a term of X years.
• You stopped working at the practice at the end of the contracted term.
• According to the Licence Agreement, the administrative fee (exclusive of GST) for outpatient services is X% of total practice receipts in respect of professional services rendered to outpatients at the clinic. For inpatient services it is X% of total practice receipts in respect of professional services rendered to inpatients at the clinic.
• Your general obligations are to keep the consultation area clean, tidy and in good condition, undergo appropriate orientation and induction, and comply with the clinic's building rules.
• The clinic's obligations are to make available a furnished area in the clinic for your use and provide you with reasonable access to general amenities.
• The clinic must provide you with administration and practice management, including reception of patients at the clinic, booking of patient appointments, patient billing and maintenance of patient records.
• You must pay the clinic the administrative fee for each billing period in arrears in consideration of the grant of the licence, the provision of services and the provision of support services.
• You have provided an example of a tax invoice from the clinic to you.
• You book the majority of the patients you would like to see at the clinic. You have discretion to treat these patients at any of the other practices you are working at.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 section 38-7
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