Please note that the following document, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence.
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
XXXXX
XXXXX
XXXXX
Case Number: 108285
Attention: XXXXX XXXXX
Business Number: XXXXX
March 22, 2010
Dear XXXXX:
Subject:
GST/HST RULING
Applied Behaviour Analysis and Intensive Behavioural
Intervention Therapy - Children with Autism Spectrum Disorders
Thank you for your letter of XXXXX, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the provision of Intensive Behavioural Intervention (IBI) Therapy and Applied Behaviour Analysis (ABA) by XXXXX ("Corporation") to children with Autism Spectrum Disorders (ASD) and developmental disabilities. As you know, your letter was transferred to this office from our XXXXX GST/HST Rulings Centre for reply. We apologize for the delay in this response.
XXXXX.
XXXXX.
The following is based on the information you provided in your letter and subsequent correspondence, as well as that provided during your telephone conversations with me and Danette Smith of this office. XXXXX.
All legislative references are to the ETA unless otherwise specified.
Statement of Facts
We understand the following:
1. The Corporation operates a facility located in XXXXX ("Centre").
2. The Corporation is a GST/HST registrant.
3. The Corporation helps children with ASD and other related disorders through the use of IBI and/or ABA. XXXXX.
4. The Corporation offers a range of ABA therapy services through its XXXXX programs. XXXXX.
5. The XXXXX programs are targeted towards the cognitive skills; behaviour/regulation skills; communication skills; speech and language development; augmentative communication; play and social skills; motor skills and self-help skills of children.
6. These programs are individualized to meet each child's needs and involve the continuous assessment of a child's skills and program development; integration of technology and fine/gross motor tools when appropriate; the collaboration with outside professionals as needed; and on-going data collection.
7. Staff at the Corporation is highly trained in the application of ABA principles to remediate a child's behaviour, speech, language, communication, social cognitive, play skills and activities of daily living. The Corporation uses the skills of its staff members to provide ABA therapy services under its XXXXX programs as follows:
ABA Therapists
XXXXX.
XXXXX.
Senior ABA Therapists
XXXXX.
ABA Clinical Supervisor
XXXXX.
XXXXX.
8. The Corporation enters into a XXXXX ("Contract") with clients XXXXX for the provision of ABA therapy services under its XXXXX programs. A generic Contract was provided for our review. The Contract stipulates the terms and conditions of providing ABA therapy services and what clients can expect from the Corporation in relation to the provision of these services. XXXXX:
• XXXXX.
• XXXXX.
• XXXXX.
As well, specific services, which are integral to the program, will be provided and the corresponding fees levied:
• XXXXX.
• XXXXX.
• XXXXX.
XXXXX.
XXXXX.
XXXXX.
It states that according to Ministry guidelines XXXXX.
XXXXX.
9. XXXXX:
XXXXX.
10. The Corporation completes and/or has its clients complete the following forms, as required:
XXXXX.
11. XXXXX.
Rulings Requested
You would like to know:
1. Whether the Corporation is required to charge the GST on the supply of its ABA therapy services provided through its XXXXX programs to clients that do not receive XXXXX funding XXXXX.
2. Whether the Corporation is required to charge the GST on the supply of its ABA therapy services provided through its XXXXX programs to clients that receive XXXXX funding XXXXX.
3. What is the procedure for discounting GST charges, if appropriate, and what are the other procedures that the Corporation must follow relating to the reimbursement for GST charges to clients that have already settled their invoices.
4. What is the procedure for filing the Corporation's next quarterly GST return if there are changes to the GST charges during that time period.
Rulings Given
Based on the facts set out above, we rule that:
1. The Corporation is not required to charge the GST on the supply of its ABA therapy services provided through its XXXXX programs to clients that do not receive XXXXX funding XXXXX provided paragraph 14(i) of Part II of Schedule V is met.
2. The Corporation is not required to charge the GST on the supply of its ABA therapy services provided through its XXXXX programs to clients that receive XXXXX funding XXXXX provided subparagraph 14(iii)(c) of Part II of Schedule V is met.
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.
We are unable to provide you with a ruling for your remaining two questions because they do not relate to specific factual situations. However, we have provided the following interpretations on the subject raised in these questions.
INTERPRETATIONS GIVEN
1. Where clients have paid an amount as or on account of the GST in error to the Corporation with respect to its supply of ABA therapy services made through its XXXXX programs on or after February 26, 2008, clients may request a refund or credit of the amounts from the Corporation, subject to the conditions and time limitations provided in section 232. Further information on the time limitations and conditions for claiming refunds and credits is available in GST/HST Memoranda Series Chapter 12.2, Refund, Adjustment, or Credit of the GST/HST under Section 232 of the Excise Tax Act.
2. Alternatively, clients may apply for a rebate of those amounts from the CRA subject to the conditions and time limitations of section 261. It should be noted that a rebate application made under section 261 cannot include amounts that were paid in error more than two years before the application is filed. If a refund is paid or a credit is issued by the Corporation, clients are not eligible to file a rebate application under section 261 for that same amount. Further information on filing a rebate application for tax paid in error is available in guide RC4033, GST/HST General Application for GST/HST Rebates. Both publications are available on the CRA Web site.
Where the Corporation has refunded or credited the excess amount within two years after the day on which it was collected, it may deduct the amount on line 107 of its GST/HST return in determining its net tax for the reporting period in which the credit note was issued. The Corporation must maintain documentary evidence to support this deduction.
Explanation
Generally a supply made in Canada is subject to the GST at a rate of 5% or the HST at a rate of 13% if the supply is made in a participating province (Nova Scotia, New Brunswick, Newfoundland and Labrador) (and Ontario at the rate of 13% and British Columbia at the rate of 12% effective July 1, 2010), unless the supply is exempt or zero-rated. Schedule V enumerates supplies that are exempt of the GST/HST.
Section 14 of Part II of Schedule V exempts the following supplies made after February 26, 2008:
"14. A supply (other than a zero-rated supply or a prescribed supply) of a training service 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 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 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 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."
Subsection 123(1) defines "government" as "Her Majesty in right of Canada or a province".
The expression "practitioner" is defined in section 1 of Part II of Schedule V which states:
"practitioner", in respect of a supply of optometric, chiropractic, physiotherapy, chiropodic, podiatric, osteopathic, audiological, speech-language pathology, occupational therapy, psychological, midwifery or dietetic services, means a person who
(a) practises the profession of optometry, chiropractic, physiotherapy, chiropody, podiatry, osteopathy, audiology, speech-language pathology, occupational therapy, psychology, midwifery or dietetics, as the case may be,
(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."
Section 1 of Part II of Schedule V defines "medical practitioner" as "a person who is entitled under the laws of a province to practise the profession of medicine or dentistry".
Section 15 of Part II of Schedule V states:
"15. For the purposes of section 14, a training service does not include training that is similar to the 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."
The Corporation provides ABA therapy services to children through its XXXXX programs. XXXXX. The Corporation charges its clients a separate fee for each of these different elements. Where ABA therapy is provided through the XXXXX program, the Corporation also charges its clients a fee for XXXXX.
Generally, where a transaction consists of a number of different elements, such as those just described, it must be determined whether those elements are inputs consumed or used in the course of making a single supply or whether they are multiple supplies. If a transaction involves multiple supplies, it is then necessary to characterize and determine the tax status of each supply. Some of those supplies may be subject to the GST/HST and some may exempt of the GST/HST. On the other hand, if it is found that a single supply exists, the characterization and tax status of that supply must be determined. In this case, the characterization of a supply is dependent upon the nature of the Contract between the Corporation and its clients (e.g., parents/guardians of a child with ASD or developmental disabilities).
To establish whether the elements of ABA therapy services provided by the Corporation through its XXXXX programs constitute a single supply of a training service that falls under section 14 of Part II of Schedule V, the principles set out in GST/HST Policy Statement P-077R2, Single and Multiple Supplies (P-077R2) were applied to the facts of each program respectively.
Having applied those principles, it is our view that each of the elements utilized by the Corporation in the provision of ABA therapy services under its XXXXX programs are integral components of a single supply. The additional fees described in XXXXX are considered to be part of the consideration for the supply of the training service.
Further, it is our view that the provision of ABA therapy services by the Corporation through the XXXXX programs constitutes supplies of training services described in section 14 of Part II of Schedule V.
While section 14 of Part II of Schedule V exempts the supply of a training service, it contains several requirements that must be met in order for a supply of a training service to be exempt. As such, the determination of whether the supply of ABA therapy services through the XXXXX programs by the Corporation is exempt under this provision can only be made on a case-by-case basis. Therefore, each Contract entered into between the Corporation and a client would have to be reviewed to determine whether these requirements are met.
As a general guide to making this determination, we offer the following examples to illustrate how section 14 of Part II of Schedule V would generally apply.
Example 1: If a supplier provides a training service that falls under paragraph 14(a) and a physician has certified that the individual with the disorder or disability requires that training service, the supply of the training service would be exempt under section 14 of Part II of Schedule V because the training service is being supplied in the circumstance described under subparagraph 14(b)(i).
Example 2: If a supplier provides a training service that falls under paragraph 14(a) and the supplier receives satisfactory evidence that the person paying for the training service receives an amount from a government or organization administering a government program targeted at assisting individuals with a disorder or disability for the purposes of acquiring the training service, the supply of the training service would be exempt under section 14 of Part II of Schedule V because the training service is being supplied in the circumstance described under clause 14(b)(iii)(C).
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-954-4395. 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,
Lynn Fournier Renner
Municipalities and Health Care Services Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
UNCLASSIFIED
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