TAX BRIEFING FOR PROFESSIONALS

What are the Registration Requirements

For Individuals: 1. Birth Certificate 2. Mayors Permit, if applicable 3. DTI Certificate of Business applicable

Name,

if

What are the Registration Requirements

4. Professional Regulation Commission ID, if applicable 5. Payment of Professional Tax Receipt (PTR) from the local government, if applicable

What are the Registration Requirements

For Corporations or Partnerships: 1. Certificate of Registration with the Securities and Exchange Commission 2. Mayors Permit 3. Partnership Agreement

Procedures
Step 1. Accomplish Application for Registration Step 2. Pay the registration fee of P 500.00 Step 3. Attend the required taxpayers briefing Step 4. Apply for Invoices/Receipts Step 5. Register books of accounts and have them stamped by the RDO Step 6. Update registration information, if needed.

No. 087585 JUAN DELA CRUZ Internal Medicine Room 101, Philippine Medical Center, Quezon City TIN: 115-385-076-000 VAT Name of Patient: Yasmien B. Gancayco Address: 88 Liwayway St., Brgy. South Triangle, Q.C. Professional Fees VATable Transaction TOTAL 12% vat Total Account Payable Php 750.00 Php 750.00 Php 750.00 Php 90.00 Php 840.00 VATable Date: x x x

Not to be issued for non-VAT/Exempt Sales of Goods, properties or services. If issued sale shall be subject to 12% VAT 8000 Booklets BIR OCN 2GH00000890508 EIA Printing Press 90 Block 2, Deedernoire, West Avenue, Q.C.

BIR Requirements
1. Registration Fee ( RF) 2. Computation of Taxes Due 2.1.1 Tax Rate for Individuals 5 32% 2.1.2 Tax Rate for Corporations/Partnerships
30%

HOW TO COMPUTE THE INDIVIDUAL INCOME TAX (EXAMPLE) Gross Receipt Less: Allowable deductions Personal Exemptions Additional Exemptions ( 4 children x Php 25,000.00) TAXABLE INCOME Php 1,000,000.00 (600,000.00) (50,000.00) (100,000.00) 250,000.00 50,000.00 40,000.00 10,000.00

Php

TAX DUE (based on tax table in BIR Form 1701) Php Less: Creditable Withholding Tax Php 400,000 x 10% Income Tax Payable PHP

BIR Requirements
2.2 Expanded Withholding Tax (EWT) Rate be used by Withholding Agents Professionals: 15% if total professional fees exceed 720,000.00 for the current year 10% if total professional fees total 720,000.00 and below the current year to of P P

Sec. 2 .57.2 (I) RR 6-2001 dated July 31, 2001

(I) Professional fees paid to medical practitioners any amount collected for and paid to medical practitioners (includes doctors of medicine, doctors of veterinary science and dentists) by hospitals and clinics or paid directly to the medical practitioners by patients who ere admitted and confined to such hospitals or clinics 10%

Sec. 2 .57.2 (I) RR 6-2001 dated July 31, 2001

Duty and Responsibility of the hospital or clinic 1. to remit taxes withheld from the following: a. Professional fees paid directly to hospitals or clinics by patients. b. Professional fees paid by patients directly to medical practitioners

Sec. 2 .57.2 (I) RR 6-2001 dated July 31, 2001

2. to submit the names and addresses of medical practitioners in the following classifications: a. Medical practitioners whose professional fee was paid by patients directly to the hospital or clinic b. Medical practitioners whose professional fee was paid to them directly by the patients and the 10% withholding tax was given by such practitioners to the Accounting Office of the hospital or clinic

Sec. 2 .57.2 (I) RR 6-2001 dated July 31, 2001

c. Medical practitioners whose professional fee was paid to them directly by patients but the 10% withholding tax was not given by such practitioners to the Accounting Office of the hospital or clinic. d. Medical practitioners who did not charge any professional fee from their patients.

Sec. 2 .57.2 (I) RR 6-2001 dated July 31, 2001

3. For the accurate computation of professional fees paid directly to hospitals and clinics and timely remittances of the expanded withholidng taxes. 4. Shall issue a Certificate of Creditable Tax Withheld at Source.

RMC No. 38-2011 dated September 1, 2011 -Clarifications on the Application of Expanded Withholding Tax on the Payments of Philippine Health Insurance Corporation to Medical Practitioners and/or Hospitals Pertaining to PHIC Members Benefits

Illustration
Patient A was confined in Hospital X, a PHICaccredited hospital. PHIC benefits include the following: Professional Fees P 4,000.00 Facility Fee 10,000.00 Q. How much should be the tax withheld by PHIC? A. Withholding on Prof Fees (4,000x15%) P 600.00 Withholding on Facility Fees (10,000x2%) 200.00 Total P 800.00

Illustration
Patient A was confined in Hospital X, a PHICaccredited hospital. PHIC benefits include the following: Professional Fees P 4,000.00 Facility Fee 10,000.00 Q. How much should be the tax withheld by PHIC? A. Withholding on Prof Fees (4,000x15%) P 600.00 Withholding on Facility Fees (10,000x2%) 200.00 Total P 800.00

BIR Requirements
2.3 Business Taxes Business tax rates may either be: 2.3.1 Value Added Tax 12% 2.3.2 Percentage Tax (PT) or Non-Vat 3%

How to compute the VAT

TOTAL OUTPUT TAX OR TOTAL SALES X 12% LESS: TOTAL INPUT TAX OR TOTAL PURCHASES X 12% VAT PAYABLE P P
xx xx xx

How to compute the Percentage Tax

Net amount received Add: 10% Expanded Withholding Tax Total Professional Fee Multiply by 3% percentage tax Percentage Tax Due Php X X X XXX Php X X X Php X X X Php X X X

What are the Tax Forms and their Due Dates

1. Payment Form ( Individuals/Corportions/Partnerships) 0605 On or before the last day of January every year after the initial registration

2. Income Tax - Individuals 1701 Q 1701 Q 1701 Q 1701 1Q 2Q 3Q Final Jan- Mar Apr-June July-Sept Jan-Dec. 15-Apr 15-Aug Nov. 15 Apr 15 FF YR

What are the Tax Forms and their Due Dates

3. Income Tax - Corporations or Partnerships 1702 Q 1702 60 Days end of quarter Calendar - April 15 FF YR Fiscal - 15th day of the 4th month ff. the end of the taxable year

4. Value Added Tax 2550 M 2550 Q 20th day of succeeding month 25th day of the month following the end of a particular quarter

What are the Tax Forms and their Due Dates

5. Percentage Tax 2551 M 20th day after the end of each month

 Reminder: The Professional needs to file a return even when there is no payment to be made. Under the Run After Tax Evaders (RATE) program, the BIR and DOF investigate and prosecute individuals and/or entities engaged in tax evasion

 Reminder: The BIRs Integrated Tax System (ITS) detects non-filing or non-payment of tax returns by a taxpayer

ROZENN G. NOVILLA
Revenue Officer III RDO No. 24 Valenzuela City (Assessment Section)
BIR CONTACT CENTER: 981-8888 BIR WEBSITE: www.bir.gov.ph