No GST/HST Collection Required Psychotherapists and Counselling Therapists

Evelyn Jacks

Did you know that as of  June 20, 2024, some psychotherapists and counselling therapists practicing are no longer required to collect the GST/HST on their services? Now, their GST/HST accounts may need to be closed.   Here is what you need to know:

Who qualifies for the new rules?  The following practitioners no longer need to charge the GST/HST, according to the CRA:

• those licensed with a provincial body responsible for the regulation of psychotherapy services (regulated only in Ontario) or counselling therapy services (regulated only in New Brunswick, Nova Scotia, and Prince Edward Island); or
• those who operate in province that do not have a regulatory body but do have the equivalent qualifications required to meet the licensing requirements in a regulated province; and
• those who provide services that are within the scope of practice of the profession in that regulated province
• those who are located in Quebec will need to contact Revenu Quebec for more information.

Details on what CRA considers to be an “exempt” service can be found in these documents:

• Proposed Amendment – Exemption for Psychotherapy Services and 
• Proposed Amendment – Exemption for Counselling Therapy Services

If services are GST/HST exempt, the practitioner must stop charging the GST/HST and the  GST/HST account with the CRA can be closed either online or by mail. If some of the services provided are still taxable however, the account will stay open.

If only some of your services are exempt, you must keep your account open and continue to charge the GST/HST on any non-exempt services and goods. CRA will ask for the following when an account is closed:

• The business number (BN)
• The legal name of the business
• The cancellation date
• The reason for closing the GST/HST account

 To close the GST/HST account go to one of the following and provide required details:

• My Business Account
• Represent a Client
• Form RC145, Request to Close Business Number Program Accounts

However, the taxpayer may still owe GST/HST on capital and non-capital property held at the time of closing and this must be computed.

In the case of non-capital property, the taxpayer is deemed to have sold each property owned at its fair market value just before account closing and GST is payable. 

A similar rule is true for capital properties, except in this case, all or part of the input tax credits previously claimed on this property have to be repaid.

Bottom Line: Despite the good news about the exemption,  the tax rules are complex and psychotherapists and counselling therapists will require professional assistance in most cases.

Additional Educational Resources:  The Tax Tip Toolkit! An excellent way for Knowledge Bureau designates to earn non-verifiable CE Credits as well.