There are important conditions that have to be met for therapy services to be exempt – meaning GST/HST doesn’t apply. Let’s go through them!
The basic rules
In general, all goods and services are taxable unless there’s a specific exemption. For therapy services to be exempt (non-taxable), all of these criteria must be met:
Within the scope of practice – The service must be within the scope of practice for the therapist, which varies by province. Generally, most services provided in a clinical setting would qualify.
Example: Alex is a registered psychotherapist in Ontario who provides Cognitive Behaviour Therapy plus other modalities outside the scope of what the CRPO covers. The CBT services won’t have HST apply, but the other modalities might.
Practitioner-client relationship – There must be an established or ongoing relationship involving personal interaction with an individual.
Example: Online programs with no interaction with your clients will still be taxable.
Licensed or equivalent – The practitioner must be licensed if their province requires it, or have the equivalent qualifications. Here’s a breakdown by province and practitioner:
Psychotherapists in Ontario and Quebec who are registered with CRPO or OPQ – This criterion is met
Counselling therapists in New Brunswick, Nova Scotia and PEI who are registered with the provincial regulator – This criterion is met
Everyone else – This criterion is met if you have equivalent qualifications to what’s required to register with one of these regulatory colleges
For health-care purposes – The service needs to be for the purpose of maintaining or improving health. For example, work performed on behalf of an insurance or legal firm generally wouldn’t be exempt and would be taxable.
Other professions
Other professions, like registered social workers and registered nurses, are already able to provide non-taxable therapy services, as long as it’s within the scope of their profession. This change doesn’t affect them.
More from Therapy Taxes: