CRA publishes a new GST/HST Memorandum on private instruction and tutoring

ETA Sched. V, Pt. III, s. 9 exempts:

a supply of a service of tutoring or instructing an individual in

1. a course that is approved for credit by, or that follows a curriculum designated by, a school authority;
2. a course that is a prescribed equivalent of a course described in paragraph (a); or
3. a course the successful completion of which is mandatory for admittance into a particular course described in paragraph (a) or (b) and not for admittance into any other course that is a prerequisite to the particular course”.

Most of the discussion in CRA’s new GST/HST Memorandum is on (a) above. CRA states:

The service of tutoring or instructing an individual need not be limited to material contained in a course approved for credit by, or that follows a curriculum designated by, a school authority [and] … could also include general concepts dealing with the relevant subject matter … in order to assist the individual in understanding the material contained in a course approved for credit by, or that follows a curriculum designated by, a school authority. … In order for the exemption to apply, it must be evident that there is some direct connection between the supply of the service of tutoring or instructing in question and the course approved for credit by, or the curriculum designated by, a school authority.

CRA then provided examples of general reading proficiency instruction qualifying, but general study skills course not qualifying. CRA also provided an example of a private corporation (“Corporation A”) providing a course that involved children working through a progression of non-customized math workbooks at their own pace as not qualifying given that there was little assistance from the instructor and there was “no evidence of a relationship between the supply being made by Corporation A and a course approved for credit by, or that follows a curriculum designated by, a school authority.”

Note that s. 9(a) only requires that the course be a credit course of the school authority and not that the course actually be taught by the school authority. CRA provided examples of a private driving school providing exempt driving courses to students for high school credit, and a similar example respecting a high school authorizing jazz dance classes at a private dance academy.

The prescribed equivalent in s. 9(b) is music lessons, which CRA defines somewhat as one would expect.

CRA illustrates the somewhat convoluted language of s. 9(c) by indicating that where there is a three-level ballet course, with only the third level recognized by a private school for a physical education credit, level 2 would qualify because it is a prerequisite to entering level 3, but level 1 would not qualify because it is merely a prerequisite to entering a prerequisite course (level 2).

Neal Armstrong. Summaries of GST/HST Memorandum 20-6 “Tutoring and Equivalent Services” December 2019 under ETA Sched. V, Pt. III, s. 9 and Equivalent Courses (GST/HST) Regulations, s. 2.