Exciting news for Canadian counsellors and therapists (and their patients)! As of December 2024, the BC Association of Clinical Counsellors (and the Ontario body as well) confirmed that they have received confirmation from the Canada Revenue Agency that counselling therapy services provided by regulated professionals are now officially exempt from GST/HST. This long-awaited change simplifies tax compliance and makes counselling services more affordable for clients. Let’s dive into what this means for your practice and how to ensure you’re fully prepared to take advantage of this update.

Counsellor Therapy Services Exempt from GST / HST – What Does the GST/HST Exemption Mean?

If you’re a regulated counsellor or therapist, you no longer need to charge GST or HST on your services. This exemption applies to services aimed at improving mental health and well-being, making your offerings more accessible to the individuals and families who need them most.

However, it’s important to note that this exemption applies only to counselling services provided directly to clients. Other types of services, such as consultations or training for other professionals, may still be taxable. Be sure to assess the nature of your services carefully to remain compliant with tax regulations.

What Should You Do Now?

Here’s how to adjust your practice to reflect the new GST/HST exemption:

  1. Stop charging GST/HST on these services: Update your invoicing and accounting systems immediately to reflect this change. Notify your bookkeeper to ensure they also do not claim any GST/HST Paid past the date you have stopped collecting GST/HST.
  2. Communicate with your clients: Let them know that your services are now tax-exempt and moving forward they will not see this. It is a great opportunity to demonstrate your commitment to affordability and transparency.
  3. Consider if you still have GST/HST chargeable services. If you do, consider whether the total annual charge for these services is greater than $30,000. If your taxable services are under that amount, then you are considered a small supplier and would not be required to register for GST/HST.
  4. Close your GST/HST account (if you’re not required to keep it open for taxable supplies as noted above). File your GST/HST return to the end of the period and pay your final balance owing (if applicable).

Note: GST/HST paid cannot be claimed when it relates to exempt services. Thus, you will no longer charge GST/HST on these services, but also then cannot claim it. GST/HST paid will then become an expense for your business. This may then reduce cash flow and net income of your business. This then may be a consideration in future price adjustments for your practice.

How Virtual Heights Accounting Can Help with Implementation in Your Clinical Practice

At Virtual Heights Accounting, we specialize in helping small business owners and professionals navigate the complexities of tax compliance. Here’s how we can support you:

  • Updating your invoicing and accounting systems to reflect the GST/HST exemption.
  • Assisting you in closing your GST/HST accounts and filing final returns.
  • Providing expert advice tailored to your unique business needs especially as it relates to services offered that may still be considered a taxable service.

If you’re unsure how this change impacts your practice, don’t hesitate to contact us. We’re here to help you navigate these updates with confidence.

Watch Our YouTube Video for More Information

We also cover this in our YouTube video. So check that out here.

Spread the Word

So in summary, Counselling Therapy Services are now exempt from GST/HST! This update is a game-changer for counsellors across Canada. Help us spread the word by sharing this blog with your colleagues and fellow professionals. Together, we can ensure everyone benefits from this important clarification.

If you have any questions or need assistance, feel free to reach out to us. We’re always here to support your success!