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: 154036
October 24, 2016
Dear [Client]:
Subject: GST/HST RULING
Psycho-vocational assessments and vocational assessments
Thank you for your […][correspondence] concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to psycho-vocational assessments and vocational assessments. We apologize for the delay of 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 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 the following:
1. You are a registered Psychological Associate with the College of Psychologists of Ontario. You are self-employed and not registered for GST/HST purposes.
2. You are contracted by rehabilitation companies […] to conduct psycho-vocational assessments and vocational assessments on individuals that are receiving loss of earnings benefits from the […](Third Party) as a result of work-related injury or illness. These assessments are used to assist the individual in returning to work by recommending upgrading, retraining options and alternative vocational options. You are paid a flat fee for your services by the rehabilitation companies.
3. The rehabilitation companies are contracted by the Third Party to provide assessment and job-specific training services as part of a return to work plan or on an independent basis. As part of providing their services to the Third Party, the rehabilitation companies enter into a contract with you to provide vocational assessments and psycho-vocational assessments.
4. Vocational assessments and psycho-vocational assessments are requested for individuals who are unable to return to work in their typical job or lifestyle activities due to the restrictions imposed by a physical or psychological injury or illness. They are conducted on individuals that have difficulty returning to or maintaining the level of performance in former employment and need to identify suitable alternative employment or vocational retraining needs.
5. A vocational assessment considers degrees of impairment, functional academic abilities, transferable skills, aptitudes, interests, job search skills, and loss of earnings. A vocational assessment can also help to identify vocational alternatives that are consistent with an individual’s aptitudes, interests, skills, and physical abilities.
6. A psycho-vocational assessment evaluates the same factors as the vocational assessment. It also evaluates the client’s learning competencies, general personality characteristics, current emotional status, general intelligence quotient, motivation and social skills to identify the potential impact of these metrics on the individual’s ability to participate in training and return to work.
7. In performing the assessments, you initially conduct a clinical interview with the individual and then decide the tests to be administered. The tests include a battery of specialized tests, such as vocabulary/reading comprehension achievement, cognitive intelligence aptitudes, vocational interest measures, anxiety personality measures, psychological testing if presented with symptoms, and pain battery. If English is not the individual’s first language you may use non-verbal tests or bring in an interpreter. You may also use scribes if the individual has an upper spinal cord injury.
8. Upon completion of the assessment you produce a report citing recommendations regarding a jobs profile (i.e., suitable job types) and whether the individual would benefit from retraining, modified duties, graduated hours or a modified workstation.
RULING REQUESTED
You would like to know if your supply of psycho-vocational assessment and vocational assessment services rendered to an individual as described above is exempt from the GST/HST.
RULING GIVEN
Based on the facts set out above, we rule that your supplies of psycho-vocational assessment and vocational assessment services rendered to an individual are exempt from the GST/HST pursuant to paragraph 7(j) of Part II of Schedule V. As such, the consideration for the supply is not subject to the GST/HST.
EXPLANATION
Generally, most supplies of property and services made in Canada are subject to the 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 under the GST/HST.
Paragraph 7(j) of Part II of Schedule V exempts a supply of psychological services rendered to an individual by a practitioner of the service.
Section 1 of Part II of Schedule V defines a “practitioner” in respect of a supply of psychological services as a person who
(a) practises the profession of psychology,
(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.
The College of Psychologists of Ontario is the regulatory body for the profession of psychology in the province of Ontario. Accordingly, a member of the College in good standing meets the definition of a "practitioner" for psychological services provided in Ontario for purposes of paragraph 7(j) of Part II of Schedule V. There is no distinction made in the legislation or in the regulations between a Psychologist and a Psychological Associate with respect to scope of practice or with respect to authorized acts. A Psychological Associate is authorized to perform the same psychological services as a Psychologist and is subject to the same regulations as a Psychologist. Accordingly, a Psychological Associate is a “practitioner” as defined in section 1 of Part II of Schedule V.
However, to be included under the exempting provision in paragraph 7(j) of Part II, the psychological service provided must also meet the definition of a “qualifying health care supply” and not be a “cosmetic service supply”.
A supply that is a cosmetic service supply or a supply in respect of a cosmetic service supply, that is not made for medical or reconstructive purposes, is deemed under section 1.1 of Part II of Schedule V 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.
In addition, section 1.2 of Part II of Schedule V provides that for the purposes of Part II of Schedule V, other than sections 9 and 11 to 14 (Footnote 1), a supply must be a “qualifying health care supply” to be included in Part II.
Under section 1 of Part II of Schedule V, “qualifying health care supply” means:
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.
The supply of psycho-vocational assessment and vocational assessment services rendered to an individual fall within paragraph (c) or (d) of the definition of "qualifying health care supply" as the purpose of the service is to confirm or identify the issues related to an individual's injury or disability for the purpose of vocational rehabilitation planning and the development of the individual's vocational rehabilitation plan. In addition, the supply of psycho-vocational assessment and vocational assessment services is not a "cosmetic service supply".
Accordingly, your supplies of psycho-vocational assessment and vocational assessment services rendered to an individual meet the conditions of paragraph 7(j) of Part II of Schedule V and are exempt supplies. As such, the consideration paid for the supplies is not subject to the GST/HST.
For additional information, please refer to GST/HST Notice No. 286, Draft GST/HST Policy Statement - Qualifying Health Care Supplies and the Application of Section 1.2 of Part II of Schedule V to the Excise Tax Act to the Supply of Medical Examinations, Reports and Certificates.
In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, the 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.
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
FOOTNOTES
1 Section 9 of Part II of Schedule V exempts supplies of properties and services covered by provincial health insurance plans, section 11 exempts supplies of food and beverages to a health care facility, section 13 exempts supplies of subsidized home care services and section 14 exempts supplies of various training services.
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