Revenue Note for Guidance

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Revenue Note for Guidance

1008A Medical practitioners operating in partnership

Summary

This section provides that, where individual medical practitioners enter into contracts with the Health Service Executive (HSE) to provide certain medical services and provide those services in the conduct of a partnership profession with other individual medical practitioners, the income from those services can be treated as income of the partnership for tax purposes, where a joint election is made. It also allows Professional Services Withholding Tax (PSWT) to be deducted from the relevant payment under the tax number of the medical partnership where such an election is made.

Details

Definitions

(1)“enactment” means a statute, or an instrument made under a power conferred by statute.

“medical partnership” means a partnership where all of the partners are individuals and are medical practitioners, and the partnership is governed by a partnership agreement. This ensures that the provision only applies to partners that are individuals and does not apply to corporates or employees.

“medical practitioner” has the same meaning as in the Medical Practitioners Act 2007. It is a person who holds a basic medical qualification, which is one approved by the Medical Council. It also includes the European Union and third country equivalent qualifications.

“partnership agreement” means any valid written agreement governing the partnership which is subject to the laws of the State.

“relevant income” means all amounts, in respect of relevant medical services, paid to, or for the benefit of, a relevant medical services provider, by the HSE.

“relevant medical services” means services provided by a medical practitioner pursuant to the following Acts and regulations -

  • (a) regulations made under sections 5 and 29 of the Health Act 1947, i.e. the National Childhood Immunisation Programme;
  • (b) section 58 of the Health Act 1970, i.e. the GMS Scheme;
  • (c) sections 62 and 63 of the Health Act 1970, i.e. the Maternity and Infant Care Scheme;
  • (d) section 62A of the Health Act 1970, i.e. Termination of Pregnancy Services;
  • (e) section 67E of the Health Act 1970, i.e. the Free Contraception Contract Scheme;
  • (f) section 70 of the Health Act 1970, i.e. the National Cervical Screening Programme;
  • (g, h, n ,o) orders made under section 75A and regulations made under section 75B, of the Health Act 1970 and Regulation (EC) No. 883/2004 of the European Parliament and of the Council of 29 April 2004 on the coordination of social security systems and the Trade and Cooperation Agreement between the European Union and the European Atomic Energy Community, of the one part, and the United Kingdom of Great Britain and Northern Ireland, of the other part, done at Brussels and London on 30 December 2020, i.e. reciprocal or other arrangements made for medical services to EU and UK nationals temporarily in the State.
  • (i) the Health (Amendment) Act 1996, i.e. provision of health services to relevant participants who have contracted Hepatitis C;
  • (j) the Mental Health Act 2001, i.e. services relating to Involuntary Admissions;
  • (k) the Redress for Women in Certain Institutions Act 2015, i.e. provision of health services to eligible participants;
  • (l) the Misuse of Drugs Acts 1977 to 2017, i.e. the Opioid Replacement Scheme;
  • (m) the Mother and Baby Institutions Payment Scheme Act 2023, i.e. provision of health services to eligible participants;
  • (p) such other provisions of any other enactment as the Minister for Finance may by order prescribe.

“relevant medical services provider” means a medical practitioner with whom the HSE has entered into a contract to provide relevant medical services.

“relevant payment” has the same meaning as section 520(1) – it means a payment for professional services made by an accountable person, for the purposes of PSWT.

Ministerial order

(2)(a)Subsection (2) provides that the Minister for Finance may, by order, make provision for inclusion of additional medical services under this section.

The Minister for Finance, following consultation with the Minister for Health, may by order, make provision for additional medical services, provided by medical practitioners, in the definition of “relevant medical services” under this section.

(2)(b)Every order, referred to in subsection (2)(a), made by the Minister for Finance must be laid before Dáil Éireann after it is made. Where a resolution annulling the order is passed by Dáil Éireann, within 21 days of its next sitting, the order will be annulled, but without prejudice to the validity of anything previously done thereunder.

(3)This section applies to a medical partnership as defined in subsection (1) where one or more of the partners in the medical partnership are relevant medical services providers.

(4)(a)The relevant medical services are ordinarily provided by medical practitioners who are partners in or are employed by the medical partnership.

Joint election

A medical partnership and a partner of that medical partnership, who is also a relevant medical services provider, may jointly elect that the proportion of the relevant medical service providers relevant income, that relates to services provided by employees or partners of the medical partnership, be treated as income of the medical partnership.

(4)(b)An election under paragraph (a) shall be made in the form and manner specified by the Revenue Commissioners.

(5)Where an election is made under subsection (4), the following will apply;

Treatment of expenses

(5)(a)Any expenses laid out or expended for the purposes of earning the relevant income, which is treated as that of the medical partnership, shall be treated as expenses incurred by the medical partnership in the course of its trade.

Relevant payments for PSWT and notification to the HSE

(5)(b)Where a joint election is made the medical partnership is deemed as receiving the payment for professional services provided in the conduct of the medical partnership for the purposes of section 529A which is the section that applies to partnerships for the purposes of PSWT. Therefore the relevant payment is deemed to have been made to each partner in the proportion in which profits or gains of the partnership profession for the year of assessment involved are to be apportioned between the partners. The PSWT shall be apportioned solely between the partners and in the same proportion.

(5)(c)The relevant medical services provider, and not the precedent partner of the medical partnership, shall furnish the tax number of the medical partnership concerned to the HSE (the accountable person). In addition, the medical partnership is the specified person for the purposes of operating PSWT on relevant income.

Tax returns

(5)(d)The precedent partner of the medical partnership shall include details of the relevant income, to which the election under section 1008A applies, in the partnership’s income tax return Form 1 (Firms).

(5)(e)The relevant medical services provider is to confirm in his or her income tax return (Form 11), that an election has been made under section 1008A(4) for the relevant year of assessment and provide the name of the medical partnership to which the election relates.

Relevant Date: Finance Act 2024