The $30,000 question, answered annually
Exams, hygiene, restorations and surgery are exempt: no HST charged, none recoverable. What counts toward the $30,000 small-supplier threshold, measured over four consecutive calendar quarters, is only the taxable and zero-rated side of the practice. Three lines tend to carry it:
- Purely cosmetic procedures. Whitening done for appearance sits outside the health-care exemption.
- Front-desk retail. Electric toothbrushes, whitening kits and similar goods are ordinary taxable sales.
- Space and facility fees. Charging an independent practitioner for the use of an operatory is a taxable supply of space, not a dental service.
We total those lines at every year-end. Crossing $30,000 does not make dentistry taxable; it obliges the practice to register and charge 13% on the taxable lines only, and to file the returns that come with registration. Zero-rated orthodontic revenue counts toward the threshold too, though on that side registration is usually the goal rather than the burden.
Registration also changes the bookkeeping. Input tax credits are only available for the taxable side, so costs have to be apportioned between exempt clinical activity and the taxable lines on a method that is reasonable and applied consistently. A whitening lamp is fully creditable; the reception renovation mostly is not.
Orthodontics: the exception that pays you to register
Orthodontic appliances are zero-rated medical devices. Under a long-standing CRA administrative arrangement, a practice whose treatment agreements and invoices separately identify the appliance portion may treat part of each case fee, commonly estimated at 35%, as the zero-rated appliance supply, subject to conditions and an annual true-up. A registered practice then recovers input tax credits on brackets, aligners, lab work and the inputs tied to that supply.
The catch is that the paperwork has to be built that way from the first patient; it cannot be reverse-engineered at year-end. The credit list is also wider than lab invoices: a documented share of rent, utilities and software attributable to the zero-rated activity can qualify. General practices running aligner cases sometimes meet the conditions and sometimes do not, depending on how treatment is billed, so we review the contracts before anyone relies on the arrangement.
The DPC filing calendar
A Dentistry Professional Corporation is a CCPC, so its first $500,000 of active practice income is taxed at roughly 12.2% combined in Ontario. Keeping that rate is mostly a matter of filing clean and on time, which is the core of our Corporate Tax Filing work. The recurring dates look like this:
| Filing | When it lands |
|---|---|
| T2 corporate return | Six months after the DPC's year-end |
| Corporate tax balance | Three months after year-end for most DPCs claiming the small business deduction |
| Corporate instalments | Monthly, or quarterly for eligible small CCPCs, once tax payable passes $3,000 |
| T4 and T5 slips | Last day of February |
| GST/HST return, if registered | Annual filers: three months after the fiscal year-end |
One quiet decision with long consequences: the year-end itself. We set it so tax season and T2 work never collide with your heaviest clinical months, and we reset instalments after every filing so a strong year does not turn into arrears interest the next. Associates who invoice the practice as contractors may also need T4A slips for their fees; those go out with the same February run.
The owner's T1 is the other half of the file
How much comes out as salary versus dividends is a planning decision made during the year; the tax season job is making the slips, the T1 and the T2 tell one consistent story. We prepare personal returns for the dentist and family alongside the corporate file: T4 and T5 amounts matching the corporate deductions, RCDSO and CDSPI-related professional costs claimed on the correct return, and personal instalments set from real numbers.
Where a spouse or parent holds non-voting DPC shares, any dividend to them gets a TOSI check before it is paid, not after the CRA asks. The share structure itself, and who may hold it, is a story for our incorporation page.
When a letter arrives
The reviews that actually reach dentists are specific: a GST/HST query on the exempt-versus-taxable split, a payroll exam poking at associate contractor status, a processing review of a large equipment addition. Because we filed the returns, CRA Audit & Review Support responds from the working papers instead of reconstructing them, and most letters end at the first reply.
Source: CRA — GST/HST for businesses.
