Psychotherapy, counselling services are now tax exempt in Canada

Certain psychotherapy and counselling services in Canada are now exempt from sales tax collection in an attempt to make mental health care more affordable for Canadians.

The Canada Revenue Agency said in a news release on Monday that certain psychotherapists and counselling therapists are no longer required to collect the goods and services tax (GST) or the harmonized sales tax (HST) on their services.

The tax exemption, which was proposed by the federal government in the fall economic statement in November, went into effect on June 20 after receiving royal assent, the CRA said.

It applies to individuals who have a licence from a provincial body to provide psychotherapy or counselling therapy services.

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Those professionals who work in a province with no regulatory body, but who have the equivalent qualifications required to meet the licensing requirements in a regulated province, are not required to collect GST/HST.

Services that are within the scope of practice of the profession in a regulated province — Ontario, New Brunswick, Nova Scotia and Prince Edward Island — are also exempted from the sale tax.

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“Once you confirm that your services are GST/HST exempt, you must stop charging the GST/HST on your services,” the CRA said.

“If all of your services are exempt, you may close your GST/HST account with the CRA, online or by mail,” the agency said.

These new rules apply anywhere in Canada, except for Quebec, which has its own tax requirement.

It expands the tax exemption for services provided by different types of health-care professionals, including dentists, optometrists, physiotherapists, chiropractors and midwives.

Health-care services covered by provincial plans are also exempt from a sales tax.