Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.
GST/HST Rulings Directorate
5th floor, Tower A, Place de Ville
320 Queen Street
Ottawa ON K1A 0L5
[Client Address]
Case Number: 249402
Business Number: […]
Dear [Client]:
Subject: GST/HST ruling - Supply of Psychotherapy Services made by an Occupational Therapist […]
Thank you for your correspondence of April 3, 2025, concerning the application of the goods and services tax/harmonized sales tax (GST/HST) to supply of psychotherapy services made by an occupational therapist in […][Province X].
The HST applies in the participating provinces at the following rates: 13% in Ontario; 14% in Nova Scotia; and 15% in New Brunswick, Newfoundland and Labrador and Prince Edward Island. The GST applies in the rest of Canada at the rate of 5%.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
STATEMENT OF FACTS
We understand the following from your letter and other sources:
1. You are the sole proprietor of […] (the Corporation).
2. You are an occupational therapist registered with […] (the College) under registration number [#]. […].
3. The College is the provincial regulatory body that oversees the practice of the profession of occupational therapy in [Province X].
4. The College was established under […][legislation A].(footnote 1) The profession of occupational therapy is governed under […][legislation B].(footnote 2)
5. The controlled act of psychotherapy is defined in […][provision A of legislation B], as “[…].”
6. […][provision A of legislation A] provides that a “[…].”
7. You are registered for the GST/HST, […].
8. You provide psychotherapy services to adult clients located in [Province X], who are referred to you by […] (the Centre).
9. You provide your services in-person or virtually.
10. You are not an employee of the Centre. You are a subcontractor for the supply of psychotherapy services.
11. You are paid by the Centre for the psychotherapy services rendered to clients. […].
RULING REQUESTED
You would like to know whether the supply of psychotherapy services made by an occupational therapist in [Province X] is exempt from the GST/HST.
RULING GIVEN
Based on the facts set out above, we rule that the supply of psychotherapy services made by an occupational therapist in [Province X] is exempt from the GST/HST pursuant to paragraph 7(i) of Part II of Schedule V.
EXPLANATION
Generally, all supplies of goods and services made in Canada are taxable unless an exemption from the GST/HST applies. Taxable supplies are supplies made in the course of a commercial activity and may be taxable at the rate of 0% (zero-rated supplies), 5%, 13%, 14% or 15% on the value of the consideration for the supply depending on the province in which the supply is made. Zero-rated supplies are included in Schedule VI. Exempt supplies are not subject to the GST/HST and are included in Schedule V.
Part II of Schedule V sets out the health care services that are exempt from GST/HST. A supply of a health care service rendered by a health care professional that is not included in Part II is generally subject to GST/HST.
Services made by an occupational therapist
Paragraph 7(i) of Part II of Schedule V exempts from the GST/HST the supply of an occupational therapy service if the service is rendered to an individual by a practitioner of the service.
Furthermore, paragraph 7(i) also provides that a health care service rendered by a practitioner to an individual is an exempt supply regardless of the identity of the supplier of the service. Hence, in this case, regardless of whether the services are supplied through the Corporation or directly by the practitioner, the exemption under paragraph 7(i) would still apply.
The application of paragraph 7(i) of Part II of Schedule V is limited by sections 1.1 and 1.2 of that Part. Sections 1.1 and 1.2 deem supplies that are made for cosmetic purposes and supplies that are not qualifying health care supplies to not be included in Part II of Schedule V.(footnote 3)
For more information on qualifying health care supplies, refer to GST/HST Policy Statement P-256, Qualifying Health Care Supplies and the Application of the GST/HST to Supplies of Medical Examinations, Assessments, Reports and Certificates.
Occupational therapy service
The CRA does not define the term “occupational therapy service”, as the scope of practice of the profession of occupational therapy may vary from province to province. In provinces where the respective profession is regulated, the scope of practice of the profession is determined by the applicable regulatory body in the province. Hence, a person who practises the profession of occupational therapy must refer to the governing body or relevant provincial legislation of the province in which they practise to determine whether the services being supplied are occupational therapy services.
In [Province X], the profession of occupational therapy is regulated. Pursuant to [provision A of legislation A], occupational therapists are authorized to perform the controlled act of psychotherapy. As such, psychotherapy services are within the scope of practice of the profession of occupational therapy in [Province X] and are considered to be occupational therapy services.
Practitioner of the service
Section 1 of Part II of Schedule V defines “practitioner” in respect of occupational therapy to mean a person who:
(a) practises the profession of occupational therapy,
(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.
Therefore, the definition of practitioner depends on the province in which the person who practises the profession of occupational therapy provides their services.
Based on the facts, you are a registered occupational therapist with the College and render your occupational therapy services in [Province X]. The College is the regulatory body in that province that regulates the profession of occupational therapy. Therefore, pursuant to the definition in section 1 of Part II of Schedule V, you are considered a practitioner of the profession of occupational therapy in [Province X].
In sum, the supply of psychotherapy services rendered to an individual by a registered occupational therapist in [Province X] is an exempt occupational therapy service pursuant to paragraph 7(i) of Part II of Schedule V.
ADDITIONAL INFORMATION
Tax paid in error
Your supply of psychotherapy services is exempt. Therefore, if you charged or collected an amount as GST/HST in error or on an exempt supply, you may, pursuant to section 232:
* adjust the amount charged if the amount has not been collected; or
* refund or credit the amount to the patient if the amount has been collected.
A professional who adjusts, refunds or credits the amount must do so within two years after the day the amount was charged or collected and must provide the patient with a credit note containing specific information.
A professional who adjusts, refunds or credits the amount charged or collected as GST/HST in error to patients, may deduct the amount when determining their net tax for the reporting period in which the credit note is issued. The amount may only be deducted to the extent it has been included in determining the net tax for the reporting period in which the credit note is issued or a preceding reporting period of the professional. This amount should be reported as an adjustment on line 107 (or line 108 if the return is filed electronically) of the practitioner’s GST/HST return for the appropriate reporting period.
Alternatively, a practitioner can choose not to adjust the amount charged or issue a refund or credit. In these cases, patients who have paid an amount as GST/HST on exempt supplies in error may claim a rebate of the amount paid using Form GST189, General Application for GST/HST Rebates. The time limit to apply for this rebate is two years after the day the purchaser paid the amount.
For more information, including the specific information that must be contained on a credit note or debit note, refer to GST/HST Memorandum 12.2, Refund, Adjustment, or Credit of the GST/HST under Section 232 of the Excise Tax Act and Guide RC4033, General Application for GST/HST Rebates.
DISCLAIMER
In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1-4, Excise and GST/HST Rulings and Interpretations Service, the Canada Revenue Agency (CRA) is bound by the ruling(s) given in this letter provided that: none of the issues discussed in the ruling(s) are currently under audit, objection, or appeal; no future changes to the ETA, regulations or the CRA’s interpretative policy affect its validity; and all relevant facts and transactions have been fully and accurately disclosed.
CONTACT
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 873-455-1361.
Should you have additional questions on the interpretation and application of the GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.
Sincerely,
Kassandra Leonard
Rulings Officer
Health Care Sectors Unit
Public Service Bodies and Governments Division
GST/HST Rulings Directorate
FOOTNOTES
1. […]
2. […]
3. Section 1 of Part II of Schedule V defines a “qualifying health care supply” as a supply of property or a service that is made for the purpose of
(a) maintaining health,
(b) preventing disease,
(c) treating, relieving or remediating an injury, illness, disorder or disability,
(d) assisting (other than financially) an individual in coping with an injury, illness, disorder or disability, or
(e) providing palliative health care.
Section 1.1 of Part II of Schedule V provides that, “For the purposes of this Part, other than section 9, a cosmetic service supply and a supply, in respect of a cosmetic service supply, that is not made for medical or reconstructive purposes are deemed not to be included in this Part.”
A “cosmetic service supply” is defined in section 1 of Part II of Schedule V to mean, “a supply of property or a service that is made for cosmetic purposes and not for medical or reconstructive purposes”.
Section 1.2 of Part II of Schedule V provides that, “For the purposes of this Part, other than sections 9 and 11 to 14, a supply that is not a qualifying health care supply is deemed not to be included in this Part.”
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