2 November 2004 GST/HST Interpretation 50061 - Services Provided by Speech-Language Pathologists

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.

Dear XXXXX:

This is in reply to your letter XXXXX, with attachments, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the instructors and therapists supplied by your client, XXXXX.

Interpretation Requested

Another party, XXXXX has contracted with XXXXX for the provision of services to autistic children and their families. XXXXX refers the children and families to XXXXX for services such as functional, developmental and family assessments to determine the service needs of the children for the development of service plan interventions and program evaluations; assistance with the development of service plans and links to other community services; and behavioural intervention services. XXXXX employs instructors and therapists who perform the services. These employees have a health care or social sciences background; however these employees are not themselves licensed or certified social workers or medical specialists.

XXXXX is the recipient of the supplies made by XXXXX, and XXXXX invoices XXXXX on a monthly basis for the services rendered by its employees. The consideration charged by XXXXX to XXXXX includes an amount calculated on the basis of the number of staff and the applicable rate for the type of staff plus amounts to cover XXXXX rental and administrative costs related to the provision of these services.

You are requesting our views on whether the proposed addition of section 7.2 to Part II of Schedule V to the Excise Tax Act (the "ETA") would apply to the supplies made by XXXXX.

Interpretation Given

As you noted, the Department of Finance tabled a Notice of Ways and Means Motion on October 3, 2003, which included a legislative proposal to exempt from tax supplies made after that date of certain health-related services rendered in the practice of the profession of social work. ^[vii]3

Currently, these supplies are subject to the GST/HST at the rates of 7% and 15%. The services covered by the proposed amendment are supplies made by social workers of counselling individuals for the prevention or treatment of physical or mental disorders or to assist these individuals or their caregivers in coping with these disorders.

The proposed amendment to the ETA applies to social workers who are licensed or otherwise certified to practice the profession of social work in the province in which they supply their services. Where the supplier is not required to be licensed or otherwise certified to practice the profession of social work in the province in which the service is supplied, the supplier must have the equivalent qualifications required to be licensed or certified in a province where there is such a requirement. The proposed exemption does not apply to social work services supplied by other persons, such as government organizations and corporations, as these persons do not meet the proposed legislative criteria of being a supplier who practises the profession of social work. You advised that the Province of XXXXX requires any person practicing the profession of social work in XXXXX to be registered with the XXXXX.

The wording of the proposed amendment does not include a person such as XXXXX, regardless of whether any of its employees are themselves licensed or certified social workers, as XXXXX is XXXXX not a person engaged in the practise of the profession of social work as described in the proposed amendment. XXXXX is not a person that is itself licensed to practice the profession of social work. Accordingly, the proposed exemption would not apply to XXXXX supplies, notwithstanding the qualifications of its employees.

You also advised that the instructors and therapists supplied by XXXXX are not licensed or certified social workers. Therefore, the services rendered by the instructors and therapists would not be viewed as rendered in the practise of the profession of social work.

We considered whether any exemptions set out in Part VI of Schedule V to the ETA might apply to XXXXX supplies of instructors and therapists. However, as there is no exemption in Part VI of Schedule V that would apply, XXXXX supplies of instructors and therapists are subject to the GST/HST at the rate of 7% (or 15% where the supplies are made in a participating province).

The foregoing comments represent our general views with respect to the proposed amendment to the ETA as it relates to the subject matter of your letter. Any change to the wording of these proposed amendments or any future proposed amendments to the ETA, if enacted, could have an effect on the interpretation provided herein. These comments are not rulings and, in accordance with the guidelines set out in section 1.4 of Chapter 1 of the GST/HST Memoranda Series, do not bind the Canada Revenue Agency with respect to a particular situation.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 952-6761.

Yours truly,

Susan Eastman
Municipalities and Health Care Service Unit
Public Service Bodies and Governments Division

2004/11/10 — RITS 50220 — Incorporating a Medical Partnership/Medical Practitioner/Service Rendered to an Individual