G.

R NO 167330
September 18,2009
Philippine Health Care Providers v. CIR

Facts:
PHCP is an entity engaged in the operation and maintenance of health services for the
sick people. CIR on the other hand is a government body responsible for collecting taxes. On
January 27,2000; CIR sent a demand letter to PHCP demanding PHCP to pay deficiency VAT
as well as deficiency documentary stamp tax (DST) for the years 1996-1997 ( as mandated by
sec 185 of the 1997 tax code of the Philippines).
PHCP filed a petition for review in the court of tax appeals with the prayer of exempting
itself from paying those said taxes, of which the Court of Tax appeals partially granted the
complaint and only excluded the payment of the DST.
CIR appealed the case to the CA which ruled in favor of CIR, which led the case to be
appealed to the SC.

Issue:
Whether PHCP should be exempted form paying the DST as mandated by sec 185 of
the 1997 tax code.

Held:
Yes. PHCP should be exempted from paying the DST because it is not an insurance
company, PHCP is an entity with the primary purpose of providing health services for the sick.
Sec 185 of the Tax code of the Philippines requiring the payment of documentary stamp tax, is
imposed only on a company engaged in the business of fidelity bonds and other insurance
policies. Petitioner as a health maintenance organization, is a service provider and not an
insurance company.
The two entities differ in such a way that a HMO’s concern is more on the distribution of
health care services. Unlike an insurance company which is mainly concerned of the risk and
loss of its insured, thereby indemnifying the latter in case of any contingent events.