Edited version of your written advice

Authorisation Number: 1012848945362

Date of advice: 29 July 2015

Ruling

Subject: Goods and services tax (GST) and Applied Behaviour Analysis (ABA) therapy

Question

Is GST payable on your supply of ABA therapy?

Answer

No.

Relevant facts and circumstances

You are registered for GST.

You supply ABA therapy to children with Autism Spectrum Disorder or other development disabilities.

You are a member of the DSS provider panels for the Helping Children With Autism and Better Start Programs. You are also registered with the NDIS.

ABA therapy is regarded as best practice for children with specific special needs.

ABA theory is a set of principles upon which some therapies are based. The theory identifies various teaching techniques that generally involve breaking down complex skills (or behaviours) into smaller steps and teaching them through the use of clear instructions, rewards and repetition.

ABA teaching techniques can be used for any child with specific special needs.

The ABA approach and its techniques can help children with specific disorders learn new ways of interacting with others, improve academically and use the skills they learn in different settings - at home, school and in the community. It can also help children learn to replace difficult behaviour with more appropriate behaviour, such as using words to ask for an object rather than screaming. For example, the skills children learn might include using words and language, following instructions, taking turns, playing with others, toileting and dressing.

The ABA therapy you supply is provided by psychologists, speech pathologists, occupational therapists and specially trained ABA therapists.

You charge fees for the ABA therapy.

The ABA therapy is performed in Australia.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 subsection 7-1(1)

A New Tax System (Goods and Services Tax) Act 1999 section 9-5

A New Tax System (Goods and Services Tax) Act 1999 section 9-40

A New Tax System (Goods and Services Tax) Act 1999 paragraph 38-85(a)

A New Tax System (Goods and Services Tax) Act 1999 section 195-1

Reasons for decision

Summary

GST is not payable on your supply of ABA therapy because you are supplying a special education course.

Detailed reasoning

GST is payable by you on your taxable supplies.

You make a taxable supply where you satisfy the requirements of section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), which states:

You make a taxable supply if:

(a) you make the supply for *consideration; and

(b) the supply is made in the course or furtherance of an *enterprise that you *carry on; and

(c) the supply is *connected with Australia; and

(d) you are *registered, or *required to be registered.

However, the supply is not a *taxable supply to the extent that it is *GST-free

or *input taxed.

(*Denotes a term defined in section 195-1 of the GST Act)

You satisfy the requirement of paragraphs 9-5(a) to 9-5(d) of the GST Act. This is because:

• you supply services for consideration,

• you supply the services in the course or furtherance of an enterprise that you carry on,

• the supplies are connected with Australia, and

• you are registered for GST.

There are no provisions in the GST Act under which your supplies of the ABA therapy services are input taxed.

Therefore, what remains to be determined is whether your supplies of the ABA therapy services are GST-free.

A supply of an education course is GST-free under paragraph 38-85(a) of the GST Act.

Education course is defined in section 195-1 of the GST Act to include a special education course.

Special education course is defined in section 195-1 of the GST Act as a course of education that provides special programs designed specifically for children with disabilities or students with disabilities (or both).

In accordance with paragraph 12 of Goods and Services Tax Ruling GSTR 2002/1, the following requirements must be satisfied for a course of education to be considered a special education course under the GST Act. The education course must be:

1. a special program;  

2. designed specifically;

3. for children with disabilities or students with disabilities (or both).

Course of education

Paragraphs 14, 15 and 17 of GSTR 2002/1 provide the Australian Taxation Office (ATO) view on the meaning of course of education. They state:

14. Taxation Ruling TR 98/9 states the ATO view on what is a 'course of education':

'In our view, a course of education is a course or program of study involving systematic instruction, training or schooling. 'Education' is to be given its ordinary meaning of 'acquisition of knowledge, skill etc.' (Macquarie Dictionary) and refers to a wide range of knowledge or skill, including sport.'

15. In the context of the definition of a 'special education course' in section 195-1, a course of education should also be given a wide meaning to include a course or program of study involving systematic instruction, training or schooling in areas of:

• scholastic and academic pursuits;

• vocational skills; or

• personal development.

17. To be a course of education, the systematic instruction, training or schooling also needs to have elements of interactive teaching, for example, the course is delivered through an instructor or teacher.

ABA therapy is a course or program of study involving systematic instruction or training in the areas of scholastic and academic pursuits and personal development. The course involves interactive teaching. The course is delivered through an instructor or teacher. Therefore, as you satisfy the requirements of paragraphs 14, 15 and 17 of GSTR 2002/1, your ABA therapy is a course of education.

Special program

Paragraph 19 of GSTR 2002/1 provides the ATO view on the meaning of special program. It states:

19. A program is a special program if it is:

• designed specifically to meet the special needs of children or students with disabilities;

• designed specifically to reduce or prevent the impact of disabilities for children or students with disabilities; or

• not made available to people generally.

Designed specifically for children or students with disabilities

Paragraph 22 of GSTR 2002/1 provides factors that assist in determining whether a course is designed specifically for children or students with disabilities. It states:

22. You need to consider the whole of the circumstances of the creation and delivery of a program to decide whether it is designed specifically for children or students with disabilities. Relevant matters include:

• evidence of an intention to design the program for children or students with disabilities;

• the character of the program that is provided;

• the intended recipients of the program; and

• any relevant obligations you or others have in providing the program.

In accordance with paragraph 34 of GSTR 2002/1, disability includes an autism spectrum disorder. The children in your case have disabilities.

We conclude that your ABA therapy is designed specifically for children with a disability based on the following facts:

• there is evidence of an intention to design the program for children with a disability

• the ABA therapy has the character of a program that is designed specifically to train children with a disability, and

• disabled children are the intended recipients of the program.

ABA therapy is a special program because:

• it is a course of education

• it is designed specifically to meet the special needs of children with disabilities

• it is designed specifically to reduce or prevent the impact of disabilities for children with disabilities, and

• it is not made available to people generally.

ABA therapy is:

• a course of education, and

• a special program designed specifically for children with disabilities.

Hence, ABA therapy is an education course for the purposes of the GST Act. Therefore, your supply of ABA therapy is GST-free under paragraph 38-85(a) of the GST Act.

Hence, your supply of ABA therapy is not a taxable supply. Therefore, GST is not payable on your supply of ABA therapy.