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Accounting and tax planning for dentists, physicians, physiotherapists, chiropractors, acupuncturists, and multidisciplinary clinics across Canada. Built for practitioners deciding when to incorporate, navigating income splitting limits, and managing associates and staff.
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Most healthcare professionals start as employees or associates, and later move to incorporation through a Professional Corporation (PC). The provincial regulator sets who can own shares, what the corporation can do, and how revenue flows. None of this is taught in school.
A Professional Corporation is not just any small business corporation. The TOSI rules (Tax on Split Income) limit how much income can be split with family members. Earnings retained inside the corporation interact with passive investment rules. The small business deduction phases out gradually when passive income passes a certain level.
We work with practitioners at all stages, from a recent graduate signing their first associate agreement, to owners of multiple clinics with multidisciplinary teams under one roof.
Setting up the corporation correctly with the provincial regulator, with a share structure that respects ownership rules and integrates with personal tax planning. Setup decisions affect taxes for years.
TOSI rules apply to all CCPCs equally, but the exclusions that allow income splitting are harder to qualify for in healthcare PCs because of provincial regulator ownership restrictions. We help structure family compensation that respects TOSI exclusions when they apply, and acknowledge when they don't.
Most clinics receive patient payments in two streams: direct (cash, debit, credit) and through health insurance providers (Pacific Blue Cross, Manulife, Sun Life, Green Shield, ICBC, WSIB, etc.). Each insurer pays on its own timing, with adjustments, denials, and partial payments along the way. When the books treat each deposit as a separate event without reconciling against the original claim, revenue gets misstated and outstanding receivables become invisible.
Most regulated healthcare services are GST/HST exempt, which sounds simple but creates complications. Cosmetic procedures are taxable. Some integrative services fall in a gray zone. Practitioners working in mixed practices (medical + cosmetic) need clear separation in books and invoicing. Wrong treatment leads to either missed ITCs (paying more tax than necessary) or unexpected GST/HST liability later. Read more about GST/HST/PST.
When physiotherapists, chiropractors, and acupuncturists share a space, the structure can range from each professional with their own PC paying rent, to contractor arrangements, to employees on payroll. Each option has different implications for tax, liability, and revenue split. Setup decisions taken at the start define how the clinic operates for years.
Adding a second or third clinic raises questions about whether each clinic should be its own corporation, how the small business deduction is shared across associated corporations, and when a holding company starts to make sense for the group. These decisions connect directly with broader tax planning for the practitioner.
Whether to bill as a sole proprietor or to incorporate from day one, how to read the associate agreement for hidden costs, and how to set up the books to track everything required by the agreement. The first year sets the pattern for the next ten.
Income threshold matters but is not the whole story. The decision involves retained earnings plans, RRSP/TFSA strategy, family situation, personal goals, and professional regulator approval. We model the trade-off based on your real numbers, not generic rules of thumb.
Asset purchase vs share purchase, financing structure, and the lifetime capital gains exemption when QSBC criteria apply. Each path has very different tax outcomes for both buyer and seller.
Should each clinic be its own corporation? How does the small business deduction split between associated corporations? When does a holding company start to make sense? Decisions that determine your effective tax rate for years.
Physios, chiros, acupuncturists, RMTs operating under one roof create real questions about tax structure, contractor vs employee classification of practitioners, and inter-PC payments. We map the options before mistakes lock in for years.
How to structure the sale of practice, optimize the lifetime capital gains exemption, and plan the income drawdown after the practice is sold. Decisions that affect retirement income for the rest of life.
Pulling money from the corporation that isn't salary or declared dividend creates a shareholder loan that must be repaid within strict CRA timelines. Miss the deadline and the entire amount becomes taxable personal income. Many practitioners don't realize this until the tax bill arrives.
Charging GST/HST on exempt services (creates client refund issues), or not charging on taxable services (creates personal liability for the practitioner), are common mistakes when the line between medical and cosmetic isn't clear from the start. Reviewing the service mix and applying the correct treatment prevents amendments later.
When practitioners share clinic space, equipment, or staff under an informal cost-sharing arrangement, CRA can recharacterize the relationship as a partnership, with major tax consequences for everyone involved. Proper documentation, clear allocation of expenses, and respecting the form in practice are essential.
Retained earnings invested in stocks, ETFs, or rental property inside the corporation generate passive income, which over $50,000 phases out the small business deduction dollar-for-dollar. Without a strategy, the practitioner ends up paying corporate tax at the highest rate on active business income, undoing the benefit of the PC structure.
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