As of June 20, 2024, certain psychotherapy and counselling therapy services have become exempt from GST/HST. This means that those providing these exempt services are no longer required to collect GST/HST on their services, and these service providers are no longer able to claim input tax credits (ITCs) on inputs acquired to provide these services.
Psychotherapy and counselling therapy services are now exempt if the provider:
- is licensed with a provincial body responsible for the regulation of psychotherapy services (regulated only in Ontario) or counselling therapy services (regulated only in New Brunswick, Nova Scotia and Prince Edward Island); or
- operates in a province with no regulatory body but has the equivalent qualifications required to meet the licensing requirements in a regulated province.
In addition, to be exempt from GST/HST, those providing the services must do so within the profession’s scope of practice in the respective regulated province.
If all of a registrant’s services are GST/HST exempt, they may close their GST/HST account with CRA. If only some of their services are exempt, they must keep their account open and continue to charge GST/HST on non-exempt services and goods.
In addition, on June 20, 2024, there may be a deemed sale and repurchase of certain capital property (e.g. computers, furniture) used in the provision of these services due to the change from a taxable to exempt supply. This generally means that the taxpayer will have to repay all or part of the GST/HST they claimed (or were entitled to claim) as an ITC when they bought the property and when they made any improvements to it. The required repayment of GST/HST is adjusted if the assets have declined in value since the acquisition.
Disclaimer: The preceding information is for educational purposes only. As it is impossible to include all situations, circumstances and exceptions in a newsletter such as this, a further review should be done by a qualified professional.
No individual or organization involved in either the preparation or distribution of this letter accepts any contractual, tortious, or any other form of liability for its contents.
