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: 248735
Business Number: […]
June 26, 2025
Dear [Client]:
Subject: GST/HST Ruling - Psychotherapy Services
Thank you for your correspondence […] concerning the application of the goods and services tax/harmonized sales tax (GST/HST) to your supplies of psychotherapy services.
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:
1. You are registered for the GST/HST under business number […]. Currently the account is pending closure […].
2. In your correspondence you indicate that you provide psychotherapy services. […].
3. You provide in-person psychotherapy services in […][Province X]. You also provide video psychotherapy services. All of your patients are in [Province X].
4. Your correspondence stated that you also have some services that are not exempt supplies, such as facilitating workshops, however the revenue from these services is below $30,000.
5. You charged GST on your supplies of psychotherapy services […]. […].
6. [Province X] does not regulate the profession of psychotherapy.
7. You are a member of […][a health professional association] ([the Association]) and have their […][Counsellor] designation.
8. [The Association] has confirmed with a regulatory college in a regulated province that the requirements for becoming an [Counsellor] are substantially equivalent to the requirements to be licensed to practise the profession of psychotherapy in that province.
RULING REQUESTED
You would like to know if your supplies of psychotherapy services are exempt.
RULING GIVEN
Based on the facts set out above, we rule that your supplies of services that are psychotherapy services are exempt supplies pursuant to paragraph 7(j.1) of Part II of Schedule V as of June 20, 2024.
EXPLANATION
Generally, all supplies of property 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 listed in Schedule V.
Part II of Schedule V lists supplies of health care services that are specifically identified as exempt supplies. If a supply of a particular health care service is not included in Part II of Schedule V, then the supply of the service would be subject to the GST/HST at the applicable rate, depending on the province in which the supply is made, unless another relieving provision in the ETA applies to the supply.
Paragraph 7(j.1) of Part II of Schedule V exempts a supply of a psychotherapy service when the service is rendered to an individual by a practitioner of the service.
Practitioner
Section 1 of Part II of Schedule V defines a “practitioner” in respect of supplies of psychotherapy services, to mean a person who
(a) practises the profession of psychotherapy,
(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.
A person is not required to be licensed or otherwise certified to practise the profession of psychotherapy in [Province X]. Therefore, in order to be a practitioner in respect of psychotherapy services, you are required to have qualifications equivalent to what is required to be licensed or otherwise certified to practise the profession of psychotherapy in a province that licenses the profession. Where a person providing psychotherapy services does not have equivalent qualifications, the person will not be a practitioner of psychotherapy services for GST/HST purposes.
The Canada Revenue Agency (CRA) does not provide rulings on whether a person has qualifications equivalent to those required to be licensed or otherwise certified to practise the profession in a regulated province.
However, [the Association] has confirmed with a regulatory college that, for GST/HST purposes, [Counsellor]s have qualifications equivalent to those required to practise the profession of psychotherapy in that province. Therefore, you meet the definition of “practitioner” in respect of psychotherapy services that are supplied in provinces that do not regulate the profession of psychotherapy. As a practitioner in respect of psychotherapy services, supplies of psychotherapy services that you render to individuals are exempt pursuant to paragraph 7(j.1) of Part II of Schedule V.
For purposes of the exemption, psychotherapy services are services included in the scope of practice of the profession in the province of the regulatory body to which you have equivalent qualifications. For example, if the determination is made that you have the equivalent qualifications to what is required to be a Registered Psychotherapist in Ontario, psychotherapy services would be services within the scope of practice of a Registered Psychotherapist in Ontario.
The exemption in paragraph 7(j.1) only applies to supplies that are psychotherapy services. If you make supplies that are not psychotherapy services, the tax status (taxable or exempt) of the other supplies are determined independently from your supplies of psychotherapy services. You must determine if another exempting provision may apply to the other supplies.
Limitations to the Exemption
It is important to note that the application of paragraph 7(j.1) of Part II of Schedule V is limited by sections 1.1 and 1.2 of that Part. Section 1.1 deems supplies that are made for cosmetic purposes to be excluded from Part II of Schedule V. In addition, section 1.2 provides that for the purposes of Part II of Schedule V, 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 Part II of that Schedule. Generally, supplies deemed not to be included in Part II of Schedule V would be taxable at the applicable rate of GST/HST, unless they are exempt pursuant to another provision.
A qualifying health care supply is defined in section 1 of that Part to mean 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.
Read together, sections 1.1 and 1.2 provide that the exemption for supplies of psychotherapy services under paragraph 7(j.1) is dependent upon the purpose for which the supply is made. For the exemption to apply, the supply has to be made for at least one of the enumerated qualifying health care supply purposes listed above and not be a cosmetic service supply.
For more information on qualifying health care supplies, please 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.
Tax paid in error
[…]. The following is provided for your information.
Refunds of tax paid in error must be done in accordance with the requirements set out in section 232. A supplier 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 recipient with a credit note containing specific information.
A supplier who adjusts, refunds or credits the amount charged or collected as GST/HST in error 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 supplier. 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.
Cancelling Registration
[…]. As you make a mix of exempt and taxable supplies, you may be required to keep your account open and continue to charge the GST/HST on any supply of non-exempt services. For more information on closing your account, please refer to https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/account-close.html.
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 343-573-6076.
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,
Art Blommesteijn
Industry Sector Specialist
Health Care Sectors Unit
Public Service Bodies and Governments Division
GST/HST Rulings Directorate
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