Published | Category : GST and QST
Stand-Alone Courses and Vocational Schools
The following conditions must be met in order for a service of providing courses to individuals to be exempt from GST and QST:
- The service is provided by a government, vocational school, school authority, university or public college.
- The courses are part of a program leading to a certificate, diploma, licence or similar document that attests to the competence of an individual to practise or perform a trade or vocation.
Consequently, stand-alone courses are taxable if they do not lead to a document that attests to the competence of an individual to practise or perform a trade or vocation, even if they may be useful to the individual and, in some cases, be a requirement for the individual's job. Likewise, courses provided by an organization over a brief period (such as one or two days) are taxable, since they offer no progression or depth of learning leading to a diploma or certificate that attests to the competence of an individual to practise or perform a trade or vocation.
An organization may be considered a vocational school and treated as a public college or similar institution in respect of the tax treatment of the courses it dispenses, provided it was established and is operated primarily to provide correspondence courses or vocational courses intended to develop or enhance the student's occupational skills.
Vocational schools usually have some or all of the following characteristics:
- The organization may or may not be a corporation. In some cases, it may be an individual.
- The organization identifies and advertises itself as a school and is publicly known as a school.
- The organization offers courses or programs following a scheduled curriculum under which the courses progress in the depth of learning from semester to semester.
- The organization has a student body which forms one or more classes.
- The students (or their parents or guardians if they are under age) pay tuition to the organization for the training they receive.
- The organization owns, rents or leases a place from which students are provided correspondence courses or vocational courses.
If an organization is unable to establish that it is in fact operating a vocational school, its training services are taxable.
Health and safety legislation such as that administered by a provincial worker's compensation board requires practitioners of certain occupations to maintain first aid certification. Business A advertises itself as providing basic first aid training. Business A markets its classes as helping workers to comply with both federal and provincial occupational health and safety legislation. The first aid courses offered by Business A generally extend over one or two days.
Business A is not considered a vocational school, since it was not established and is not operated primarily to provide courses that develop or enhance an individual's occupational skills. Rather, it was established to provide “one-off” courses that satisfy health and safety legislation. Also, the courses offered do not lead to certificates, diplomas or other documents that attest to the competence of an individual to practise or perform a trade or vocation. The supply of such courses is therefore taxable under the GST/HST and QST system.
Business B advertises itself as providing first aid training and other courses as part of its health care aide program leading to a diploma certifying competence to practise as a health care aide. Business B is registered with the provincial government as a vocational school and advertises itself as providing the specialized training needed to work as an intermediate or extended caregiver. The program takes about 30 weeks to complete.
Business B meets the conditions to be considered a vocational school, since it:
- was established and is operated primarily to provide a program of courses that develop or enhance an individual's occupational skills;
- is registered with the provincial government as a vocational school and advertises itself as providing vocational training.
All the courses provided by Business B under its health care aide program are exempt from GST and QST, since the courses lead to a certificate that attests to an individual's competence to practise as a health care aide.
A vocational school may elect to have the supply of its courses to individuals deemed taxable where they would otherwise be exempt. To make such an election, the school must file form FP-2029-V, Election or Revocation of an Election by an Organization to Have the Supply of Its Courses, Examinations and Certificates Deemed Taxable.