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.
GST/HST Rulings Directorate
5th floor, Tower A, Place de Ville
320 Queen Street
Ottawa ON K1A 0L5
[Client Address]
Case Number: 248257
Business Number: […]
Dear [Client]:
Subject: GST/HST ruling - Clinical Supervision Services
Thank you for your correspondence of [mm/dd/yyyy] concerning the application of the goods and services tax/harmonized sales tax (GST/HST) to clinical supervision services. We apologize for the delay in this response.
The HST applies in the participating provinces at the following rates: 13% in Ontario; and 15% in New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island. The Government of Nova Scotia has proposed to decrease the rate of the HST from 15% to 14% effective April 1, 2025. 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.
STATEMENT OF FACTS
Based on the information obtained from your letter, and other sources, we understand the following:
1. You are a registered psychotherapist with the […][applicable provincial regulatory body] ([…][College]). In addition, you hold […] a […][supervisor credential] from [a professional health practitioner association] ([…][Association]). […].
2. The Supervisor certification […] is intended for […][Association Members] who provide clinical supervision to other professional clinical counsellors. Achieving [Supervisor] status includes recognition of professional credibility standards for clinical supervisors.
3. The [College] is the provincial regulatory body that oversees the practice of the profession of psychotherapy in […][Province X].
4. The [College] was established under the […][applicable provincial legislation]. The profession of psychotherapy is governed under the […][provincial act governing health professions] .
5. You are registered for the GST/HST. However, your account is pending closure […].
6. You offer psychotherapy services in [Province X].
7. You state that you meet the [College]’s criteria to provide clinical supervision in [Province X].
8. You offer clinical supervision services to qualifying and registered psychotherapists. Specifically, you offer clinical supervision in graduate-level training and on-going professional development settings.
9. The […][applicable provincial legislation], define[s] clinical supervision as […]:
[…] a professional relationship where the individual who is receiving supervision is engaged in a collaborative learning process with a clinical supervisor, […] designed to, […] foster discussion of the direction of the therapy and the therapeutic relationship, and safeguard the well being of patients […]
10. According to the [College], […][registered psychotherapists] are required to practise with clinical supervision for the following reasons:
* because of their registration category,
* when encountering a challenging client situation,
* when expanding their area of practice, or
* by order of a [College] committee.
Additionally, applicants (non-registrants) who are in the process of fulfilling the requirements to become a [registered psychotherapist] with the [College] are also required to fulfill a number of clinical supervision hours.
11. According to the [College], clinical supervision is differentiated from managerial supervision, from general supervision of students […] or other professional consultation.
12. Clinical supervision is outlined in the [College]’s [standards of practice] which includes the following guidelines:
[Registered psychotherapists] provide clinical supervision only if they are qualified to do so.
[Registered psychotherapists] appropriately supervise persons whom they are professionally obligated to supervise.
RULING REQUESTED
You would like to know whether the supply of clinical supervision services rendered by a registered psychotherapist is subject to the GST/HST.
RULING GIVEN
Based on the facts set out above, we rule that the supply of clinical supervision services rendered by a registered psychotherapist is exempt pursuant to paragraph 7(j.1) of Part II of Schedule V as of June 20, 2024.
EXPLANATION
Generally, all supplies of goods and services made in Canada are taxable unless an exemption from the GST/HST applies. Taxable supplies are supplies made in the course of a commercial activity and may be taxable at the rate of 0% (zero-rated supplies), 5%, 13%, or 15% on the value of the consideration for the supply depending on the province in which the supply is made. Zero-rated supplies are included in Schedule VI. Exempt supplies are not subject to the GST/HST and are included in Schedule V.
Part II of Schedule V sets out the health care services that are exempt from GST/HST. A supply of a health care service rendered by a health care professional that is not included in Part II is generally subject to GST/HST.
Section 7 of Part II of Schedule V exempts a supply of a psychotherapy service if the service is rendered to an individual by a practitioner of the service.
Section 1 of Part II of Schedule V defines “practitioner” in respect of psychotherapy to mean a person who:
(a) practises the profession of psychotherapy,
(b) where the person is required to be licensed or otherwise certified to practise the profession in the province in which the service is supplied, is so licensed or certified, and
(c) where the person is not required to be licensed or otherwise certified to practise the profession in that province, has the qualifications equivalent to those necessary to be so licensed or otherwise certified in another province.
Therefore, the definition of practitioner depends on the province in which the person who practises the profession of psychotherapy provides their services.
Based on the facts, you are a registered psychotherapist with the [College] and render your psychotherapy services in [Province X]. The [College] is the regulatory body in that province that regulates the profession of psychotherapy. Therefore, pursuant to the definition in section 1 of Part II of Schedule V, you are considered a practitioner of the profession of psychotherapy in [Province X].
Scope of practice
The CRA does not define the term “psychotherapy service” as the scope of practice of the profession of psychotherapy may vary from province to province. Hence, a service provider must refer to the governing body, professional association, or provincial health care legislation of the province in which the health care professional practises to determine whether the rendered service is within the scope of practice of the particular profession.
As stated in the facts, the [College] incorporates clinical supervision as part of the standards of practice of a registered psychotherapist. Therefore, clinical supervision services are within the scope of practice of the profession of psychotherapy in [Province X] and are considered to be psychotherapy services.
Psychotherapy services are exempt under paragraph 7(j.1) of Part II of Schedule V if the service is rendered to an individual by a practitioner of the service. As a clinical supervisor, part of your supervision includes the review of your supervisees’ patient’s medical records and commenting on their treatment. Hence, you are considered to be rendering your services to an individual patient.
Cosmetic service supply and qualifying health care supply
As a practitioner whose clinical supervision services are psychotherapy services rendered to an individual, your supply of clinical supervision services may be exempt under paragraph 7(j.1) of Part II of Schedule V subject to the requirements of sections 1.1 and 1.2 explained below.
The application of the exemption under section 7 of Part II of Schedule V is limited by sections 1.1 and 1.2 of that Part. Sections 1.1 and 1.2 deem supplies that are made for cosmetic purposes and supplies that are not qualifying health care supplies not to be included in Part II of Schedule V.
A “cosmetic service supply” is defined in section 1 of Part II of Schedule V to mean, “a supply of property or a service that is made for cosmetic purposes and not for medical or reconstructive purposes.” Accordingly, the supply of clinical supervision services is not a cosmetic service supply, nor is it made for cosmetic purposes, and section 1.1 of Part II of Schedule V is satisfied.
A “qualifying health care supply” is defined in section 1 of Part II of Schedule V to mean, “a supply of property or a service that is made for the purpose of
(a) maintaining health,
(b) preventing disease,
(c) treating, relieving or remediating an injury, illness, disorder or disability,
(d) assisting (other than financially) an individual in coping with an injury, illness, disorder or disability, or
(e) providing palliative health care.”
Hence, supplies of property or services are not qualifying health care supplies if they are not made for one of the purposes listed in (a) to (e).
Based on the facts, the [College] distinguishes clinical supervision from other types of supervision or consultation and defines it as a special kind of supervision outlined by specific characteristics. The [College] also considers the purpose of clinical supervision to be […] that of discussing the direction of therapy a patient is receiving and that of safe-guarding the well-being of a patient. Consequently, clinical supervision is not solely for the purposes of shaping a competent psychotherapist and fulfilling provincial registration requirements. Clinical supervision is additionally undertaken for the purposes of providing effective patient treatment and ensuring patient protection from adverse effects in the course of a psychotherapeutic treatment.
Therefore, the supply of a clinical supervision service is considered a qualifying health care supply for GST/HST purposes as it is made for the purpose of assisting (other than financially) an individual coping with a mental disorder and for the purpose of treating, relieving or remediating a mental disorder. Hence, section 1.2 of Part II of Schedule V does not apply to the supply.
As such, the supply of clinical supervision services rendered to an individual by a registered psychotherapist is an exempt psychotherapy service pursuant to paragraph 7(j.1) of Part II of Schedule V.
ADDITIONAL INFORMATION
Tax paid in error
Your supply of clinical supervision services is exempt, effective June 20, 2024. Therefore, if you charged or collected an amount as GST/HST in error or on an exempt supply made after that date, you may, pursuant to section 232:
* adjust the amount charged if the amount has not been collected; or
* refund or credit the amount to the patient if the amount has been collected.
A professional who adjusts, refunds or credits the amount must do so within two years after the day the amount was charged or collected and must provide the patient with a credit note containing specific information.
A professional who adjusts, refunds or credits the amount charged or collected as GST/HST in error to patients, may deduct the amount when determining their net tax for the reporting period in which the credit note is issued. The amount may only be deducted to the extent it has been included in determining the net tax for the reporting period in which the credit note is issued or a preceding reporting period of the professional. This amount should be reported as an adjustment on line 107 (or line 108 if the return is filed electronically) of the practitioner’s GST/HST return for the appropriate reporting period.
Alternatively, a practitioner can choose not to adjust the amount charged or issue a refund or credit. In these cases, patients who have paid an amount as GST/HST on exempt supplies in error may claim a rebate of the amount paid using Form GST189, General Application for GST/HST Rebates. The time limit to apply for this rebate is two years after the day the purchaser paid the amount.
For more information, including the specific information that must be contained on a credit note or debit note, refer to GST/HST Memorandum 12.2, Refund, Adjustment, or Credit of the GST/HST under Section 232 of the Excise Tax Act and Guide RC4033, General Application for GST/HST Rebates.
DISCLAIMER
In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1-4, Excise and GST/HST Rulings and Interpretations Service, the Canada Revenue Agency (CRA) is bound by the ruling given in this letter provided that: none of the issues discussed in the ruling are currently under audit, objection, or appeal; no future changes to the ETA, regulations or the CRA’s interpretative policy affect its validity; and all relevant facts and transactions have been fully and accurately disclosed. The interpretations 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 interpretations or the additional information provided herein.
CONTACT
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 873-455-1361.
Should you have additional questions on the interpretation and application of the GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.
Sincerely,
Kassandra Leonard
Rulings Officer
Health Care Sectors Unit
Public Service Bodies and Governments Division
GST/HST Rulings Directorate
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