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, 14th floor
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 156125
Dear [Client]:
Subject: GST/HST RULING
Mental health professional services
Thank you for your [correspondence], concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the mental health services provided by one of your clients. We apologize for the delay in our response.
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.
STATEMENT OF FACTS
We understand that:
1.Your client practices as a mental health professional and works closely with a Registered Social Worker and/or a Clinical Psychologist and receives clinical supervision from […]
2.Patients are referred to your client by persons acting in the capacity of practitioner, medical practitioner, social worker or registered nurse.
3.Your client is an independent contractor. He is not an employee of […] or of any other person. The persons who refer patients to your client are independent contractors. Your client and these persons are not part of the same practice or the same person.
4.The nature of the services provided by your client include:
* Social skills training to assist individuals diagnosed with Autism Spectrum Disorders (characterized by deficits/impairments in social interaction; communication; and restricted, repetitive, and stereotyped patterns of behavior, interests and activities) to manage the effects of their disorder. The training consists of identifying problematic areas of communication, teaching the impacts of these deficits, providing instruction regarding non-verbal behavior (e.g., eye contact, body orientation, intonation), and developing and practicing scripts and strategies for written and verbal communication. Meetings generally occur on a weekly basis for purposes of analyzing recent interactions and planning for upcoming interactions. In some cases, individuals may have been diagnosed with Pervasive Developmental Delay (PDD).
* Coaching to assist individuals diagnosed with Attention Deficit Hyperactivity Disorder (ADHD) (characterized by inattention, hyperactivity, and impulsivity and generally associated with working memory impairments) to manage the effects of their disorder. The training consists of identifying problematic areas related to time management, organization, task persistence/completion, implementing a system or systems of scheduling, task reminders, and monitoring task completion. Meetings generally occur on a weekly basis for purposes of monitoring task completion and developing and implementing additional strategies.
* Cognitive behavioral training to assist individuals with Major Depressive Disorder, Obsessive-Compulsive Disorder, Generalized Anxiety Disorder, and Social Anxiety Disorder to alleviate or eliminate the effects of the disorder. The training is based on a Cognitive Behavioral Therapy (CBT) model and includes operationalization of the problem(s); developing, assigning and reviewing ‘homework’ (including pencil-and-paper exercises and invivo exposures); and measuring changes in cognition and behavior and attainment of goals. Meetings generally occur on a weekly basis to monitor ‘homework’, develop and implement cognitive and behavioral strategies, and assign exposures/‘homework’ for the following week.
5.The person referring the individual patient to your client confirms in writing that in his/her opinion, the training provided by your client is an appropriate means to assist the patient in coping with the effects of a disorder or disability which afflicts the patient, or to alleviate or eliminate those effects.
6.While referrals are currently being made in writing to your client, the persons making the referrals have agreed to standardize the referral note. The intention is to ensure the language of the referral is in accordance with the requirements of the ETA.
7.You attached a copy of an example of a letter to be provided by the person referring a patient to your client. That standard letter states that […]
8.[…]
9.[…]
RULING REQUESTED
You would like to know if your client’s services of social skills training, coaching, and Cognitive Behavioural training (also known as “Cognitive Behavioural Therapy”) fall within the exemption under section 14 of Part II of Schedule V.
RULING GIVEN
Based on the facts set out above, we rule that supplies of your client’s services of social skills training, coaching, and Cognitive Behavioural therapy qualify as “training that is specially designed to assist individuals with a disorder or disability in coping with the effects of the disorder or disability or to alleviate or eliminate those effects” for purposes of considering the applicability of the exemption provided in section 14 of Part II of Schedule V.
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(s) given in this letter provided that: none of the issues discussed in the ruling(s) 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.
EXPLANATION
Part II of Schedule V exempts particular health care services. Section 14 of Part II of Schedule V exempts from GST/HST:
a supply (other than a zero-rated supply or a prescribed supply) of a training service, or of a service of designing a training plan, if
(a) the training is specially designed to assist individuals with a disorder or disability in coping with the effects of the disorder or disability or to alleviate or eliminate those effects and is given or, in the case of a service of designing a training plan, is to be given to a particular individual with the disorder or disability or to another individual who provides personal care or supervision to the particular individual otherwise than in a professional capacity; and
(b) one of the following circumstances exists:
(i) a person acting in the capacity of a practitioner, medical practitioner, social worker or registered nurse, and in the course of a professional-client relationship between the person and the particular individual, has certified in writing that the training is or, in the case of a service of designing a training plan, will be an appropriate means to assist the particular individual in coping with the effects of the disorder or disability or to alleviate or eliminate those effects,
(ii) a prescribed person, or a member of a prescribed class of persons, has, subject to prescribed circumstances or conditions, certified in writing that the training is or, in the case of a service of designing a training plan, will be an appropriate means to assist the particular individual in coping with the effects of the disorder or disability or to alleviate or eliminate those effects, or
(iii) the supplier
(A) is a government,
(B) is paid an amount to make the supply by a government or organization administering a government program targeted at assisting individuals with a disorder or disability, or
(C) receives evidence satisfactory to the Minister that, for the purpose of the acquisition of the service, an amount has been paid or is payable to a person by a government or organization administering a government program targeted at assisting individuals with a disorder or disability.
The exemption described in section 14 of Part II of Schedule V is subject to section 15 of Part II of Schedule V, which provides that:
A training service or a service of designing a training plan is not included in section 14 if the training is similar to training ordinarily given to individuals who
(a) do not have a disorder or disability; and
(b) do not provide personal care or supervision to an individual with a disorder or disability.
Supplies of your client’s services of social skills training, coaching, and Cognitive Behavioural therapy, as described in the Statement of Facts, are considered to be training that is specially designed to assist individuals with a disorder or disability in coping with the effects of the disorder or disability or to alleviate or eliminate those effects. However, to be exempt from GST/HST pursuant to section 14 of Part II of Schedule V, the training must be given to a particular individual with the disorder or disability or to another individual who provides personal care or supervision to the particular individual otherwise than in a professional capacity and meet the other conditions described in section 14 of Part II of Schedule V.
Section 15 of Part II of Schedule V does not impede the application of the exemption under section 14 of Part II of Schedule V to the supplies of services of social skills training, coaching, and Cognitive Behavioural therapy as described in the Statement of Facts, as these services are not similar to training ordinarily given to individuals who do not have a disorder or disability and who do not provide personal care or supervision to an individual with a disorder or disability.
The exemption described in section 14 of Part II of Schedule V is also subject to section 1.1 of Part II of Schedule V, which provides that:
For the purposes of this Part, other than section 9, a cosmetic service supply and a supply, in respect of a cosmetic service supply, that is not made for medical or reconstructive purposes are deemed not to be included in this Part.
Section 1.1 of Part II of Schedule V does not apply to impede the exemption provided in section 14 of Part II of Schedule V to the supplies of services of social skills training, coaching, and Cognitive Behavioural therapy as described in the Statement of Facts, as these services are not cosmetic service supplies or supplies in respect of cosmetic service supplies.
ADDITIONAL INFORMATION
You indicate in your request that the patients are referred to your client by persons acting in the capacity of practitioner, medical practitioner, social worker or registered nurse. It should be noted that the terms “practitioner” and “medical practitioner” are defined in section 1 of Part II of Schedule V.
Subparagraph 14(b)(i) of Part II of Schedule V requires that a person acting in the capacity of a practitioner, medical practitioner, social worker or registered nurse, and in the course of a professional-client relationship between the person and the particular individual, that is the individual with the disorder or the disability, has certified in writing that the training is an appropriate means to assist the particular individual in coping with the effects of the disorder or disability or to alleviate or eliminate those effects.
You have submitted copies of referral notes and asked our views on them. There are no prescribed requirements to be met in respect of the written certification. The only requirement set out in subparagraph 14(b)(i) of Part II of Schedule V is that the person providing the certification in writing expresses his or her views that the training is an appropriate means to assist the particular individual in coping with the effects of the disorder or disability or to alleviate or eliminate those effects. It would be reasonable to expect that the written certification include the name of the particular individual and a clear indication of a link between the training to be provided and a particular disorder or disability, which the training is meant to be an appropriate means to assist the individual in coping with the effects of, or to alleviate or eliminate those effects.
For more information on the exemption provided under section 14 of Part II of Schedule V, see GST/HST Info Sheet GI-112, “Specially Designed Training to Assist Individuals with a Disorder or Disability” and GST/HST Info Sheet GI-113, “Specially Designed Training to Assist Individuals with Autism”. These Info Sheets are available on the Canada Revenue Agency’s (CRA) website at http://www.cra-arc.gc.ca/E/pub/gi/gi-112/README.html and
http://www.cra-arc.gc.ca/E/pub/gi/gi-113/README.html.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-954-4390. 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,
John Ware
Health Care Sectors Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
Email this Content