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: 151960
Business Number: […]
Dear [Client]:
Subject: GST/HST RULING
Services relating to individuals with autism
Thank you for your letter of March 14, 2013, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to your services for individuals with autism. We apologize for the delay in our response.
The HST applies in the participating provinces at the following rates: 13% in Ontario; 14% in Prince Edward Island; and 15% in New Brunswick, Newfoundland and Labrador and Nova Scotia. The Government of Prince Edward Island has proposed to increase the rate of the HST in that province from 14% to 15% effective October 1, 2016. The GST applies in the rest of Canada at the rate of 5%.
Effective April 1, 2013, the 12% HST in British Columbia has been replaced by the 5% GST and a provincial sales tax.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
STATEMENT OF FACTS
We understand the following:
1. You operate a business as a sole proprietor in British Columbia […].
2. You are a Board Certified Behavior Analyst (BCBA) specializing in Applied Behavior Analytic (ABA) services for children with autism. […].
3. You are a Behavioral Consultant, which is generally a synonymous term with BCBA. As such, you assess, design and monitor behavioral intervention for children and adolescents with autism.
4. You are qualified as an Autism Service Provider (ASP) on the Registry of Autism Service Providers (RASP) list. The RASP list is a list of qualified professionals providing treatment services to individuals with autism.
5. In order to qualify for funding received under the Ministry of Children and Family Development’s (Ministry’s) autism funding for the “Children Under Six” program, parents must hire behavior consultants and other professionals who are on the RASP list.
6. […][Outlines some types of client behaviors].
7. Your service is typically comprised of the development/design/assessment of individualized written, scripted programming/curriculum based on the principles of behavior analysis, designed to remediate deficits in the areas of academics, social skills, communication, self-help skills and leisure skills. This design takes up most of your time.
8. These programs are ultimately delivered to the child directly by the parents/guardian and Behavioral Interventionists (BIs) hired by the parents/guardian, who spend more time with the child than you and so implement the plan you develop.
9. In order to develop the programming based on each child’s current abilities, you assess his/her skills via direct observation and interviews of parents and/or significant others in the child’s life. You carry out functional assessments of the child’s problematic, excessive behaviors and develop behavioral interventions designed to decrease these behaviors and replace them with more functional, positive behaviors. You spend time with the child and observe behavior. The child’s initial program is designed using the results of the assessment.
10. You pass on plan/program information to the child’s parents/guardian so the plan/program can be implemented. This may involve some training of the child, but more so involves your relaying information about the instructional procedures for the behavior intervention plan to the child’s parents/guardian and to others who provide supervision and personal care to the child (referred to as tutors, instructors or BIs, all being synonymous terms, who are engaged at the decision of the parents). Your assistance with the plan/program implementation is ongoing, as you give tools and instruction to those working with the child on how to best work with the child. You observe and analyze. You monitor the plan/program regularly to determine if it needs modification.
11. BIs work directly with the child and their services are less costly than your services. They implement the plan/program that you develop. BIs are expected to exactly follow the developed plan/program in one-to-one sessions with the child. BIs possess no clinical expertise and are unqualified to provide services without the support of a Behavioral Consultant. They are care providers.
12. You sometimes provide instruction to school team members, depending on the child’s age and whether the family chooses. […].
13. You oversee and supervise the plan/program. You observe the plan/program over time to ensure it is run correctly, and adjust it as necessary. If the child is successful in a skill, you will move on to write a plan/program for a new skill. You monitor progress and results from the direct work performed by the parents/guardian and BIs to determine if the implemented plan/program needs adjustments. You meet with the BIs, parents/guardian and the child weekly to make adjustments to the plan/program design and/or behavioral interventions.
14. Parents connect with you through referrals from doctors or psychologists. A medical doctor or psychologist will diagnose a particular child as having autism, and tell the parents that the RASP list is a good place to look for a Behavioral Consultant. Doctors refer parents to you because you are on the RASP list.
15. You enter into a contract with the parents/caregiver of a child […].
This contract indicates, in part: […][the timing, approach and content of the services]
16. […][Details and guidelines about mutual expectations between the parties and the levels of service available]
17. The Ministry’s Autism Funding Unit allots funds for services for clients who are 19 years of age or under. Over 19, there is a different program that funds such services.
18. The Ministry funding is always insufficient to cover all the necessary programs of treatments. Where the funding directed to the child exceeds the approved limit, you invoice the child’s parents/guardian for the excess amounts. Invoices you send are in the child's name, with your authorization number. The parent submits the form to the Ministry’s Autism Funding Unit.
19. Invoices generally itemize activities. Program Development work time is listed on invoices as "Behavior Consultation", per the request of the Ministry’s Autism Funding Unit, which does not require much detail.
20. No provinces have licensing requirements for behavioral consultants/analysts.
21. The consideration for your services is not covered under the Medical Services Plan of British Columbia.
RULING REQUESTED
You would like to know whether supplies of your service are exempt from GST/HST.
RULING GIVEN
Based on the facts set out above, we rule that supplies of the above-described service made after February 11, 2014, are exempt from GST/HST, pursuant to section 14 of Part II of Schedule V.
However, supplies of the above-described service made prior to February 12, 2014, were taxable, pursuant to section 165.
This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service. We are bound by this ruling provided that none of the above issues are currently under audit, objection, or appeal, that no future changes to the ETA, regulations or our interpretative policy affect its validity, and all relevant facts and transactions have been fully disclosed.
EXPLANATION
Generally, most supplies of property and services made in Canada are subject to GST/HST, pursuant to section 165, unless they are specifically exempt under Schedule V. Part II of Schedule V sets out the health care services that are exempt from GST/HST.
Effective for supplies made after February 11, 2014, section 14 of Part II of Schedule V exempts:
“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.”
Effective for supplies made after February 11, 2014, section 15 of Part II of Schedule V 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.”
Section 15 of Part II of Schedule V is not applicable in this case since the training involved is not similar to training ordinarily given to individuals who do not have a disorder or disability.
The GST/HST applies to supplies of property and services. A supply is defined in subsection 123(1), in part, as “the provision of property or a service in any manner”.
Where a supplier provides a combination of service elements to its clients, it is important to determine if the supplier has made single or multiple supplies. As explained below, the tax status of training services and of services of designing a training plan were different for the period before February 12, 2014. As you provide an element of training services, it is important to properly characterize the supplies you make to be able to apply the ETA provisions to your situation.
Whether a person is making a single supply or multiple supplies is a question of fact. The common law principles of single supply and multiple supplies are described in GST/HST Policy Statement P-077R2, Single and Multiple Supplies. The characterization of a transaction as a single supply or multiple supplies considers the interrelationships among the various elements of the agreement, the purpose of an agreement, the needs of the customer, and the economic reality of the transaction. There is a single supply where one or more elements constitute the supply and any remaining elements serve only to enhance the supply. Where the essential elements are part of a single composite supply, that single supply cannot be artificially split into separate supplies.
In addition, an important question to consider is what has been supplied for the payment made. Policy Statement P-077R2 also explains that the way in which the consideration for a transaction is set out does not in itself determine whether there are one or more supplies. A single consideration does not automatically mean that there is one supply. Equally, separately identified consideration for certain elements do not necessarily mean that there are two or more supplies. Thus, one cannot rely solely on the breakdown of charges in an agreement or on an invoice to conclude that a supplier is making multiple supplies of different goods and/or services.
Based on the facts set out above, we conclude that you are making a single supply of a training plan/program design service.
To arrive at this conclusion, we considered information obtained from your letter, phone conversations with you, the sample agreement you have with parents/guardians, and the […][guidelines and mutual expectations between the parties]. Your main activity is training plan/program design. There are numerous work elements, such as training or instruction, included as part of this overall supply of training plan/program design, however, we do not consider that these individual tasks or elements carry sufficient weight on their own to warrant being considered separate supplies. Your work revolves around the effectiveness of the plan/program (e.g., assessment to help design plan/program, observation, evaluation of plan/program, modification of plan/program). The dominant aspect of your work revolves around the status of the designed plan/program. The various work elements (e.g., training, etc) are integral components of the training plan/program design services that are all intertwined, interdependent, and inextricably bound up with each other. Therefore, we conclude that the characterization of the supplies would be of training plan/program design services.
The training plans/programs you design are for training that is specially designed to assist individuals with autism in coping with its effects or to alleviate or eliminate those effects. The training is to be given to a particular individual with autism or to another individual who provides personal care or supervision to the particular individual otherwise than in a professional capacity (e.g., parents/guardians). Therefore, the criterion of paragraph 14(a) of Part II of Schedule V is met.
The funding for the acquisition of your training plan/program design services comes from the Province of British Columbia. Where funding is not contributed (e.g., due to the approved limit being exceeded), medical doctors or psychiatrists have referred parents to you as your training plan/program design services are an appropriate means to assist the particular child with autism in coping with the effects of the disorder or disability or to alleviate or eliminate those effects. Therefore, the criterion of paragraph 14(b) of Part II of Schedule V is met.
Since the criteria under section 14 of Part II of Schedule V (in its current form) are satisfied, supplies of your services of training plan/program design are currently exempt. Therefore, supplies of training plan/program design services described in section 14 of Part II of Schedule V, made after February 11, 2014, are exempt from GST/HST.
However, prior to February 12, 2014, there were no exemptions in the ETA that covered such supplies of training plan/program design services. Prior to February 12, 2014, section 14 of Part II of Schedule V exempted supplies of training services, but did not exempt supplies of designing a training plan/program. Since the supplies you make are of training plan/program design services, section 14 of Part II of Schedule V did not apply to exempt your supplies of services prior to February 12, 2014.
Since training plan/program design services were not included in the exemption prior to February 12, 2014, they were taxable when made before February 12, 2014 […]
It should also be noted that, in the event where the B.C. provincial government pays the child/parent/guardian directly, you are required to maintain satisfactory documentary evidence to that effect in order to substantiate that the condition in the exempting provision has been met.
Please see GST/HST Info Sheet GI-113, Specially Designed Training to Assist Individuals with Autism, at http://www.cra-arc.gc.ca/E/pub/gi/gi-113/README.html, for more information.
[…]
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
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
Email this Content