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Some important changes to the taxation of psychotherapy and counselling therapy services were announced this week. While the House of Commons has recently adjourned for summer recess, a number of sales tax measures introduced prior to the break. This includes details contained in Bill C-59 receiving Royal Assent on June 20, 2024.<\/p>\n
Historically, psychotherapists and counseling therapists had not been considered \u201cpractitioners\u201d under the Excise Tax Act, which required GST\/HST to apply to their services. The introduction of Bill C-59 adds both psychotherapists and counseling therapists to the list of health care practitioners, meaning professional services provided by these practitioners in future should be exempt from GST\/HST as health care services.<\/p>\n
It is important to note that the exemption permitted by way of Bill C-59 applies to psychotherapy and counselling therapy services rendered to an individual by a practitioner. Therefore, not all services performed by these practitioners will be exempt from GST\/HST if not rendered to an individual.<\/p>\n
The new legislation was made effective immediately upon receiving Royal Asset on June 20, 2024.<\/p>\n
Likely not. Since psychotherapy and counselling therapy services are now exempt from GST\/HST, practitioners can no longer claim ITCs for GST\/HST paid on expenses related to these services.<\/p>\n
For assistance with implementing these changes to your business, contact us and ask to speak to a member of our HST team.<\/p>\n<\/p><\/div>\n