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Tax Update - July 1, 2020

Tax Update - July 1, 2020

What do I need to know?

As of July 1, 2020, all Erickson Coaching International courses will be subject to applicable taxes.

I do not live in Canada and I take coach training online only
This change will not affect you at all. We wish you well on your coaching journey!

I am a Canadian resident (pay taxes in Canada) 

The GST/HST applies based on the “place of supply rules”.

ON-SITE: Where the training takes place in person, the GST/HST applies based on where the training takes place, so 13% in Ontario, 15% in Atlantic Canada and 5% everywhere else in Canada. All attendees, no matter where they live, will pay the applicable taxes based upon where the course is being physically delivered.

ONLINE (CANADIAN RESIDENTS): If the training takes place online, the GST/HST applies based on the location of the Learner.

Fees (Canadian Residents): All fees will be subject to GST/HST based on the location of the Learner. This includes extensions, class changes, etc.

    I am a Global Learner coming to Canada for an on-site training

    The GST/HST applies based on the “place of supply rules”.

    ON-SITE: Where the training takes place in person, the GST/HST applies based on where the training takes place, so 13% in Ontario, 15% in Atlantic Canada and 5% everywhere else in Canada. All attendees, no matter where they live, will pay the applicable taxes based upon where the course is being physically delivered.

    ONLINE (GLOBAL LEARNERS): GST/HST would not apply to training supplied to US and International Learners on-line. (If training is on-site in Canada then GST/HST would apply as noted above in ON-SITE)

    Questions from Canadian Learners

    Q:  I am a Canadian Learner and I signed my Enrollment Contract and paid (or set up payments) before July 1, 2020. Do I have to pay taxes?
    A:  No! The only things you need to know about relate to income tax time. Learn more in the Changes to T2202 Tax Receipts section below. 

    Q:  I am a Canadian Learner and I plan to enroll after July 1st, 2020. Do I have to pay taxes?
    A:  Yes. Please see the new rules and rates below.

    GST, HST & PST

    Who does the GST/HST apply to? 

    • Individual Learners 
    • Corporations

    *See Input Tax Credit section below for further details

      PST: 

      Erickson as an educational institution providing training is exempt from charging PST in:

      • British Columbia
      • Saskatchewan
      • Manitoba 
      • Quebec

      New GST/HST Rules and Rates

      • Starting July 1, 2020: Enrollment contracts (where 1st installment is received or paid in full) will receive an invoice which will include GST/HST. Refer to the GST, HST & PST section above for rules and rates. 
      • Starting July 1, 2020: Learners who are upgrading to a different program, for example from the Mentor Bundle to the Coach Diploma, will receive a new invoice with GST/HST for the new portion. 
      • Refund/Credits for invoices prior to July 1, 2020, will not include GST/HST. 
      • The Actionable Habit Builder Tool will include GST/HST starting now. 

      FAQ

      Q:  If I am paying by installments, and the contract started before July 1, 2020, will I pay GST on any installments which are processed July 1, 2020 onward? 

      • No, tax will be included on the invoices starting from July 1, 2020, only. Payments for installments will continue to be for the same amount to match the original invoice issued before the change.

      Q:  If I enroll in a course before July 1st, 2020, and the course starts AFTER July 1, 2020, am I charged GST or HST? 

      • No there will be no GST/HST on any invoices for programs until July 1st.

      Q: If my company (sole proprietorship or corporation) is paying for the tuition, does the company pay taxes?

      • Yes, AND there are special tax benefits as noted in the Input Tax Credit section below.

      Q:  I work for a Government agency and the agency is paying my tuition.

      • If the tuition is being paid by a government agency, please ask about their GST tax policy.

      Q:  I have Aboriginal or First Nations Status, or my tuition is being paid by my band, do I pay taxes?

      • Services acquired on or off a reserve by Indian bands or band-empowered entities for band management activities or for real property on a reserve are not subject to GST/HST. For more information: CRA

      Q:  I have signed up for Actionable, the Habit Builder Tool. Do I pay taxes on my subscription?

      • Actionable will include GST/HST starting now. This is a new product that Erickson is selling where a coach can buy a membership to an app. Not specific to a program.

      More quick questions and answers:

      If my province of residence has HST, I have to pay that for online training? 
      Yes.

      If a class is taking place in person, on-site in Canada, I have to pay GST/HST based upon the province I am taking the class in. No matter where I live in the world?
      Yes.

      If my province of residence has PST, I do NOT have to pay that for online or on-site training? 
      Yes.

      Input Tax Credit

      All corporate customers (with the exception of those engaged in exempt activities, e.g., financial institutions) would be entitled to claim a full ITC for the GST payable on the courses.  Furthermore, individuals taking such courses who are reimbursed by their employers, said employers would be entitled to claim an ITC for the GST payable by the individual (again except to the extent the employer is engaged in exempt activity). Finally, to the extent any individuals taking the courses are registered for GST themselves and taking the courses in relation to their business (coaching or otherwise), the individuals would be entitled to claim a full ITC for the GST payable.

      Changes to T2202 Tax Receipts

      A T2202 Tax receipt is issued based on the amount paid and class attended in the calendar year. The Art & Science of Coaching is the only program eligible for a T2202 tax receipt. Because Erickson’s taxation status is changing mid-year, there are special considerations.

      • Eligible period is from January 1, 2020 to June 30, 2020. Learners who do not complete the classes before July 1, 2020 but paid and/or enrolled before that date, will be eligible for T2202 on the portion of completed and paid classes before July 1, 2020 only. Any classes completed after July 1, 2020 will be excluded from the total on the tax receipt. Erickson’s Accounting Department will issue prorated tax receipts before February 28, 2021. Eligible period is from January 1, 2020 to June 30, 2020. 
      • Learners who will enroll and attend the class on or after July 1, 2020 will not be eligible for T2202 at all.  Website to be updated as well as enrollers so they can inform the learner not to expect the tax receipt.

      Why is Erickson No Longer Registered with PTIB?

      PTIB is not the appropriate body that Erickson needs to belong to as a global organization. 

      • No other coach training organization is registered with PTIB.
      • The cost to maintain our PTIB registration is prohibitive and provides no real benefits for our students. 
      • Our students receive more consumer protection from Erickson’s own terms and conditions. 
      • Not being registered with PTIB any longer means that we will not have to increase our prices for this coming year.
      • These cost savings from not belonging to PTIB can go directly into supporting our students and creating new programs. 
      • It was a strategic decision made in what we believe is the best interest of both our students and our planned growth strategy.

      International Learners

      Without PTIB registration, international students will not be eligible for a student visa as Erickson will not be a designated institution. 

      Still have unanswered questions? Please contact Academic Affairs: academicaffairs@erickson.edu