Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 167179
Dear [Client]:
Subject: GST/HST INTERPRETATION
Sign language interpretation services
Thank you for your [correspondence] concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to sign language interpretation services.
The HST applies in the participating provinces at the following rates: 13% in Ontario, New Brunswick and Newfoundland and Labrador, 14% in Prince Edward Island and 15% in Nova Scotia. The GST applies in the rest of Canada at the rate of 5%.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
We understand the following […]: […][background information about the profession of sign language interpretation]
* […][Individuals] may be employed by organizations (for example, corporations, non-profit organizations and charities) or work as sole proprietors providing sign language interpretation services to individuals or corporations.
* You understand that the supply of sign language interpretation services provided by [individuals] who work as professional independent-contracting sign language interpreters (known as freelance interpreters) and who exceed the small supplier threshold of $30,000 in a calendar quarter or any four consecutive calendar quarters is taxable for GST/HST purposes.
* Sign language interpretation services are not covered under any provincial health care plan in Canada.
* You believe the additional cost for GST/HST charged on the supply of sign language interpretation services to service providers, businesses, agencies and private individuals, who may or may not be able to claim the GST/HST back as a credit, could result in a reluctance to provide the necessary accommodations thus potentially discriminating people who are Deaf, […] or Hard of Hearing.
* […][The services of professional sign language interpreters are provided to persons who rely on sign language as their primary mode of communication, for example, for medical appointments or appointments in the community.]
* […] Interpreting services may be funded by provincial or municipal grants or fee-for-service.
* […][X] contracts freelance interpreters to provide sign language interpretation services to such persons and pays the GST/HST on the consideration for those services. The additional cost of GST/HST reduces the funding available to provide these services and decreases access to critical interpretation services for persons who rely on sign language as their primary mode of communication.
* You also note that there are essential services and products supplied to other people with disabilities that are currently either GST/HST exempt or zero-rated, such as, specially designed training to assist individuals with autism, hearing aids, wheelchairs, and prosthetics, and assert that the application of the GST/HST to these services is a discriminatory tax that unfairly targets a specific group of people with disabilities.
INTERPRETATION REQUESTED
You would like to know how the supply of sign language interpretation services by [individuals] could be zero-rated or exempt for GST/HST purposes.
INTERPRETATION GIVEN
In general, all supplies made in Canada are subject to GST/HST at the applicable rate unless a provision applies to exempt the supply. Exempt supplies are listed in Schedule V. Part II of Schedule V provides that certain health care services are exempt from GST/HST. In order for a supply of property or a service to be exempt from GST/HST under Part II of Schedule V, a specific exempting provision included in Part II must apply to that particular supply.
Taxable supplies may be subject to GST/HST at the rate of 5%, 13%, 14%, or 15% (depending on the place of supply), or they may be zero-rated. Zero-rated supplies are listed in Schedule VI and are taxable at 0%. Part II of Schedule VI zero-rates the supply of certain medical and assistive devices.
The supply of sign language interpretation services is not an exempt supply under Part II of Schedule V or a zero-rated supply under Part II of Schedule VI as there is no specific provision under either Part that would apply to those services. However, the supply of sign language interpretation services would generally be exempt from GST/HST when supplied by a charity (pursuant to section 1 of Part V.1 of Schedule V) or by a public institution (pursuant to section 2 of Part VI of Schedule V). Accordingly, the supply of sign language interpretation services by a person, other than a charity or a public institution, is subject to the GST/HST at the appropriate rate, unless the supplier is a small supplier.
In your letter of [mm/dd/yyyy], you refer to the medical expense tax credit and the disability tax credit under the Income Tax Act available to people who are Deaf, […] and Hard of Hearing. Please note that the GST/HST is governed under the ETA and as a result, these Income Tax Act based credits have no bearing on the GST/HST status of supplies of sign language interpretation services.
We understand your view that the supply of sign language interpretation services should be exempt or zero-rated as they assist those who are Deaf, […] and Hard of Hearing. However, the Canada Revenue Agency (CRA) is responsible for the administration of the ETA and its Regulations as passed by Parliament. An amendment to the ETA would be required to exempt or zero-rate the supply of sign language interpretation services. Legislative amendments are a matter of tax policy, which falls within the responsibility of the Department of Finance. We will advise officials of that Department of your views regarding the tax status of these supplies.
In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, the interpretation(s) given in this letter, including any additional information, is not a ruling and does not bind the CRA with respect to a particular situation. Future changes to the ETA, regulations, or the CRA’s interpretative policy could affect the interpretation(s) or the additional information provided herein.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 905-572-2636. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.
Yours truly,
Maria Forte-Long
Health Care Sectors Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
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