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Reminder - U.S. Excise Tax on Medical Devices Starts in 2013 - by Jeffrey Brown 

Global Tax Adviser

 

November 20, 2012

 

Jeffrey Brown
Hamilton, U.S. Corporate Tax

 

The U.S. excise tax on medical devices takes effect January 1, 2013. This tax generally applies to the first sale of a medical device into the U.S., even those sold by Canadian companies. Affected taxpayers should not delay managing their compliance with the tax if they sell medical devices into the U.S. because U.S. excise tax returns are due quarterly — noncompliance can quickly multiply into a significant exposure to tax, penalties and interest.

The excise tax applies on the sale of taxable medical devices by a manufacturer or importer at a 2.3% rate. A taxable medical device includes any device defined in the U.S. Food, Drug and Cosmetic Act intended for human use and includes "any instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent or other similar or related article including any component, part or accessory that is intended for use in diagnosis or treatment of human diseases or is intended to affect the structure or any function of the body, but does not include drugs".

 

Exceptions include eyeglasses, contact lenses and hearing aids as well as items generally purchased by the public at retail for individual use.

 

For more information, contact your KPMG adviser.

 

 

 

 

 

Information is current to November 20, 2012. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG’s National Tax Centre at 416.777.8500.

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