Changes to Canadian tax law

As of June 20, 2024, psychotherapy/counselling therapy services rendered by psychotherapists and counselling therapists are exempt from the GST/HST.

Medical services have always been exempt from GST/HST, and the scope of what falls under the umbrella of exempt health-related services has been expanding. The latest inductee: psychotherapy.

What does the new tax exemption mean for me as a psychotherapist?

If you were already registered to collect GST/HST and you don’t offer any non-exempt services, you can now close your account and stop collecting the tax. You could choose to close your GST/HST account now, or as of December 31, 2024 just to simplify things administratively; but you can stop collecting GST/HST right away. Whatever date you choose you’ll still have to file a final GST/HST return covering the period of January 1, 2024 to the date on which you close your account.

If you were never registered for the GST/HST, there’s nothing you need to do or change.

What about other goods or services I offer?

This new exemption applies ONLY to psychotherapy services. If you offer other goods or services that happen to still be taxable, for example the sale of books, you may have to stay registered and continue collecting GST/HST on those taxable goods and services.

Basically your obligations under the GST/HST system are the same as they were before, except that the psychotherapy services don’t count.

Click here for your free guide to the GST/HST

So if you have other revenue coming from taxable services, and that revenue exceeds the small supplier threshold of $30,000 per year, you must stay registered and continue to charge tax on the taxable goods or services.