Naturopathy Accounting in Waterloo, Ontario

Naturopathic services provided by a College of Naturopaths of Ontario (CONO) registered naturopathic doctor (ND) are HST-exempt under the Excise Tax Act. This exemption covers the professional consultation and treatment services within the regulated scope of practice. However, supplement sales, IV nutrients, and other retail products sold in your clinic are taxable at 13% HST. This creates a mixed-supply situation that most naturopathic practices deal with — your service revenue is exempt, your product revenue is taxable, and they need to be tracked separately for accurate HST compliance.

Yes. Ontario naturopathic doctors can incorporate a professional corporation under the Business Corporations Act (Ontario), subject to College of Naturopaths of Ontario (CONO) approval and share ownership restrictions. Incorporation allows you to retain profits at the lower corporate tax rate, defer personal income tax, access the Lifetime Capital Gains Exemption on a future sale, and potentially income-split with family members. The incorporation threshold varies by personal circumstances, but naturopathic doctors with net practice income above $80,000–$100,000 typically see meaningful tax savings from incorporating. We model both scenarios before recommending.

Naturopathic practices have a more complex overhead profile than many other health professions because of supplement inventory, lab test costs, IV therapy supplies, and equipment depreciation. Proper expense tracking requires separating: cost of goods sold (COGS) for supplements you sell, supplies consumed in treatment (IV nutrients, acupuncture needles if you practice both), clinic rent and utilities, equipment costs and CCA deductions, CONO registration and malpractice insurance, and continuing education. The supplement dispensary component requires inventory tracking to calculate COGS accurately — which affects both your income statement and your HST reporting for taxable product sales.

Supplement sales create taxable revenue that must be tracked separately from your HST-exempt naturopathic services. For accounting purposes, you need to track supplement purchases as inventory, record the cost of goods sold when products are sold, charge 13% HST on retail supplement sales, and file HST returns that clearly separate your taxable product revenue from your exempt service revenue. Depending on your sales volume, you may benefit from a periodic or perpetual inventory system. Jane App has some product sales tracking features, but most clinics need a supplementary spreadsheet or inventory system for accurate COGS calculation.

Self-employed Ontario naturopathic doctors can deduct legitimate business expenses against practice income. Common deductible expenses include: clinic rent, supplement and supply costs (COGS on products sold, consumables used in treatment), CONO registration fees, malpractice insurance, continuing naturopathic education, professional association memberships, bookkeeping and accounting fees, lab test costs passed through to patients (net of reimbursement), marketing and website costs, and home office expenses. Because your naturopathic services are HST-exempt, ITCs are not available on those service-related expenses — but the expenses are still fully deductible for income tax purposes.