November 19th, 2024
U.S. Challenges Canada’s Digital Services Tax Act Under CUSMA
The Federal budget proposed AMT changes impact tax benefits for individuals and trusts.
Posted on November 4th, 2024 in Domestic Tax, Healthcare & Other Professionals
As of June 20, 2024, certain psychotherapy and counselling therapy services have become exempt from GST/HST. This means that those providing these exempt services are no longer required to collect GST/HST on their services, and these service providers are no longer able to claim input tax credits (ITCs) on inputs acquired to provide these services.
Psychotherapy and counselling therapy services are now exempt if the provider:
In addition, to be exempt from GST/ HST, those providing the services must do so within the profession’s scope of practice in the respective regulated province.
If all of a registrant’s services are GST/ HST exempt, they may close their GST/ HST account with CRA. If only some of their services are exempt, they must keep their account open and continue to charge GST/HST on nonexempt services and goods.
In addition, on June 20, 2024, there may be a deemed sale and repurchase of certain capital property (e.g. computers, furniture) used in the provision of these services due to the change from a taxable to exempt supply. This generally means that the taxpayer will have to repay all or part of the GST/HST they claimed (or were entitled to claim) as an ITC when they bought the property and when they made any improvements to it. The required repayment of GST/HST is adjusted if the assets have declined in value since the acquisition.
If psychotherapy or counselling therapy services are provided, consideration should be provided to determine if the supply is now exempt.
Article originally published in: Tax Tips & Traps 2024 Fourth Quarter – Issue 148.
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