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GST — corporation providing health care services

My client was a licensed occupational therapist. She provided her services through a corporation. However, the corporation was not itself licensed to practice occupational therapy, as she had not done the paperwork to license it for this purpose.

The CRA proposed to assess my client's corporation some $140,000 for many years of GST not collected and remitted up to February 26, 2008. Until that date, a supplier of health care services had to be licensed (the rule was changed to now require only that the person rendering the services be licensed, which was the case here).

I worked with my client to try to get the legislation amended to allow pre-February 2008 services to be exempt in situations where GST had not been charged. This was not successful. However, I also drafted a letter for my client to send to the provincial Society of Occupational Therapists to try to get the corporation licensed retroactively. My client took this letter and my policy arguments to the auditor to review the situation. Although the auditor could have stuck to his guns and enforced the CRA's legal right to assess, he had compassion for this situation and agreed not to assess.

Problem solved!