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Should First Aid Schools Charge GST in British Columbia?

The Canada Revenue Agency believes that First Aid schools are not vocational schools and should charge GST. Find out what you can do if your school is a target for not collecting GST.

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Vocational Schools and GST in British Columbia

 

One of the most confusing parts of running or managing an organization is dealing with tax implications. The Canada Revenue Agency (CRA) has many confusing processes and Canadian tax law tends to be quite complex and often vague, making it difficult for organizations to know exactly what taxes they need to charge and when. One situation where this is true is when it comes to vocational schools in British Columbia. Many people ask “do vocational schools need to charge GST in BC?” and are unclear about the details.

Unfortunately, the Canada Revenue Agency is often quick to reassess or audit organizations that it believes have not complied with Canadian tax law, despite the existing confusion. For instance, what makes this particular situation even more complicated is the fact that the definition of a vocational school is not clearly laid out in the Excise Tax Act of Canada.

What does this mean for vocational schools in British Columbia? It means that some schools have been audited or reassessed for not charging their students GST/HST. The CRA does not consider certain schools (such as schools that teach first-aid) to be vocational schools and, thus, the agency expects that these organizations ought to charge GST. However, since the definition of a vocational school is unclear, CRA assessments and reassessment could be successfully overturned in tax court, or through negotiation by a skilled tax lawyer.

The team at Farber Tax Law believes that schools that teach first-aid in British Columbia and across the country do meet the definition of a vocational school and, therefore, the Department of Justice is likely to advise the CRA to settle cases involving these schools rather than go through a lengthy and costly court case.

 

What is the Definitional of a Vocational School?

 

When discussing whether an organization should be considered a vocational school, it’s important to understand how a vocational school is classified under the Excise Tax Act of Canada.

Under the Act, an organization meets the definition of a vocational school if;

  • It offers educational courses;
  • The courses lead to a trade or vocation; and
  • The organization issues certificates attesting to the competence of their students.

In the last few years, the CRA has specifically targeted vocational schools that teach first-aid, as it believes that these schools do not meet the above definition. However, it can certainly be argued that schools that teach first-aid should be considered vocational schools.

The classification matters because vocational schools are not required to charge GST or HST. While the agency states that, “offering courses that satisfy health and safety legislation, such as courses that meet a workers’ compensation board requirement that workers maintain first aid certification, is not sufficient to qualify an organization as a vocational school,” this argument may not hold up in court.

While no case has gone to court yet, there is a very good chance that the CRA may settle such cases rather than deal with a complicated court battle that it may very likely lose.

 

Dealing with the CRA

 

When dealing with the CRA, it is important to do so carefully. CRA agents are not just trained to handle complex negotiations, but they are also very aware of the intricate ins and outs of Canadian tax law. If you wish to prove your case to the CRA and stand a chance at successfully appealing a CRA decision, you need the professional experience and expertise of Canadian tax lawyers on your side.

At Farber Tax Law, we have extensive experience in dealing with the CRA, negotiating complex situations with CRA officials, representing our clients in court (such as the Tax Court of Canada and the Federal Court of Appeal), and getting results.

If you have been reassessed by the CRA, if the CRA is looking to audit your organization, or if you are dealing with a tax investigation or any other tax issue, the Farber Tax Law team can help. We have the experience, skill, and knowledge needed to successfully deal with the CRA and resolve your tax issues. Our team is on your side every step of the way, no matter what stage your CRA dispute is in.

When you work with Farber Tax Law, not only do you gain access to our professional expertise, but we provide you with lawyer-client privilege. This enables you to freely discuss any and all issues related to your tax matter without fear of losing confidentiality.

Please contact us today for more information and to find out how our team can help solve issues relating to the CRA, vocational schools, and GST as well as other tax law issues you may have.

Farber Tax Solutions Helps You at Every Step of the Way including:

  • 1| Organizing: We analyze all documents and communication, to fight the CRA on your behalf
  • 2| Audits: We assist you with audits and ensure proper conduct by tax authorities
  • 3| Appeals: We can prepare a Notice of Objection, clarifying your standing with the CRA
  • 4| Litigation: We represent you at all levels of court