GST/HST for Business and Self-employed Individuals 101
GST/HST is an integral part of running a business, and not understanding the rules surrounding sales tax can be damaging for your business. Self-employed Canadians
Exciting developments are underway for therapy services across Canada! Following extensive efforts, many therapy services will now be exempt from GST/HST starting June 20, 2024, enhancing accessibility to these crucial services. It’s essential for practitioners to grasp the specifics and implications of these changes.
Eligibility Criteria
To qualify for GST/HST exemption, therapy services must meet the following criteria:
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- Scope of Practice: Services must align with the therapist’s provincial scope of practice, typically covering clinical settings.
- Practitioner-Client Relationship: Personal interaction is integral, distinguishing exempt services from non-interactive online programs.
- Licensing and Qualifications: Practitioners must hold provincial licenses or equivalent qualifications, ensuring compliance with regulatory standards.
Impact on Practitioners
For practitioners already registered for GST/HST, several considerations arise:
- System Updates: Effective June 20, 2024, therapy services meeting exemption criteria no longer charge GST/HST. Update billing systems, price lists, and receipts accordingly.
- Cost Management: While eliminating GST/HST benefits clients, it alters cost dynamics for practitioners. Expenses previously eligible for Input Tax Credits (ITCs) now incur full costs.
- Capital Goods Adjustment: Previously claimed GST/HST refunds on capital goods used for taxable services may require repayment, reflecting the change in service taxation status.
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When Should Medical Professionals Incorporate?
Were Your Tuition Credits Completely Used Up from Your School Years? Healthcare professionals in Canada can incorporate their practice to take benefit of certain tax
Strategic Steps Forward
To navigate these changes:
- Client Engagement: Leverage reduced service costs to attract and retain clients. Consider revisiting pricing strategies to maintain profitability.
- Deregistration Consideration: If exclusively offering exempt services, deregistering from GST/HST by 2024-end can simplify administrative duties.
- Consultation: For practitioners offering mixed taxable and exempt services, seek guidance from SDG Accountants in Toronto to optimize tax strategies and compliance.
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Start My Tax PrepIn Conclusion:
The shift in therapy service taxation signifies a milestone in Canadian healthcare accessibility. While streamlining operations and updating financial strategies, practitioners can uphold service excellence amidst evolving regulatory landscapes.
For expert guidance tailored to your practice, contact SDG Accountant today. Together, we navigate these changes, ensuring your practice remains resilient and client-focused in the evolving healthcare landscape.
The information is not intended to constitute professional advice and may not be appropriate for a specific individual or fact situation. It is written by the author solely in their personal capacity and cannot be attributed to the accounting firm with which they are affiliated. It is not intended to constitute professional advice, and neither the author nor the firm with which the author is associated shall accept any liability in respect of any reliance on the information contained herein. Readers should always consult with their professional advisors in respect of their particular situations.
— Sami Ghaith
CPA, CGA, MBA
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