[cs_content][cs_element_section _id=”1″ ][cs_element_layout_row _id=”2″ ][cs_element_layout_column _id=”3″ ][cs_element_text _id=”4″ ][cs_content_seo]REPUBLIC OF THE PHILIPPINES
DEPARTMENT OF FINANCE
BUREAU OF INTERNAL REVENUE
APRIL 17, 1998
REVENUE REGULATIONS NO. 2-98
SUBJECT: Implementing Republic Act No. 8424, “An Act Amending The National Internal Revenue Code, as amended” relative to the Withholding on Income subject to the Expanded Withholding Tax and Final Withholding Tax, Withholding of Income Tax on Compensation, Withholding of Creditable Value-Added Tax and Percentage Taxes.
TO: All Internal Revenue Officers and Others Concerned
Pursuant to Sec. 244 of the National Internal Revenue Code, as amended, in relation to Sections 57 to 59, Sections 78 to 83, Section 114(C) and Section 116 to 127 of Republic Act 8424, these regulations are hereby promulgated which shall govern the collection at source on income paid on or after January 1, 1998 and prescribing the Revised Withholding Tax Tables on compensation.
Sec.2.57. WITHHOLDING OF TAX AT SOURCE
(A) Final Withholding Tax – Under the final withholding tax system the amount of income tax withheld by the withholding agent is constituted as a full and final payment of the income tax due from the payee on the said income. The liability for payment of the tax rests primarily on the payor as a withholding agent. Thus, in case of his failure to withhold the tax or in case of under withholding, the deficiency tax shall be collected from the payor/withholding agent. The payee is not required to file an income tax return for the particular income.
The finality of the withholding tax is limited only to the payee’s income tax liability on the particular income. It does not extend to the payee’s other tax liability on said income, such as when the said income is further subject to a percentage tax.
(B) Creditable Withholding Tax – Under the creditable withholding tax system, taxes withheld on certain income payments are intended to equal or at least approximate the tax due of the payee on said income. The income recipient is still required to file an income tax return, as prescribed in Sec. 51 and Sec. 52 of the NIRC as amended, to report the income and/or pay the difference between the tax withheld and the tax due on the income. Taxes withheld on income payments covered by the expanded withholding tax (referred to in Sec.57.2 of these regulations) and compensation income (referred to in Sec. 2.78 also of these regulations are creditable in nature.\n\n[/cs_content_seo][/cs_element_layout_column][/cs_element_layout_row][cs_element_layout_row _id=”5″ ][cs_element_layout_column _id=”6″ ][cs_element_gap _id=”7″ ][/cs_element_layout_column][cs_element_layout_column _id=”8″ ][cs_element_text _id=”9″ ][cs_content_seo]Sec. 2.57.1 Income Payments Subject to Final Withholding Tax – The following forms of income shall be subject to final withholding tax at the rates herein specified:
\n\n[/cs_content_seo][cs_element_accordion _id=”10″ ][cs_element_accordion_item _id=”11″ ][cs_content_seo]Section 2.57.1 is amended by RR 11-2018 when TRAIN Law is implemented \n\nSECTION 1. Certain items of Section 2.57.1 of RR No. 2-98, as amended, is hereby renumbered and further amended to read as follows:
“SECTION 2.57.1. Income Payments Subject to Final Withholding Tax. The following forms of income shall be subject to final withholding tax at the rates herein specified:
\n\n[/cs_content_seo][/cs_element_accordion][cs_element_text _id=”12″ ][cs_content_seo] (A) Income payments to a citizen or to a resident alien individual.
(1) Interest form any peso bank deposit, and yield or any other monetary benefit from deposit substitutes and from trust funds and similar arrangements; royalties (except on books as well as other literary works and musical compositions), prizes (except prizes amounting to ten thousand pesos (P10,000.00) or less which shall be subject to tax under Sec.24 (A of the Code) and other winnings (except Philippine Charity Sweepstakes winnings and lotto winnings) derived from sources within the Philippines – Twenty percent (20%).\n\n[/cs_content_seo][/cs_element_layout_column][cs_element_layout_column _id=”13″ ][cs_element_accordion _id=”14″ ][cs_element_accordion_item _id=”15″ ][cs_content_seo](A) (1) is amended by RR 11-2018\n\n(A) Income Payments to a Citizen or to a Resident Alien Individual:
(1) Interest from any peso bank deposit, and yield or any monetary benefit from deposit substitutes and from trust funds and similar arrangements; royalties (except on books, as well as other literary and musical compositions), prizes (except prizes amounting to Ten thousand pesos [₱10,000] or less which shall be subject to tax under Subsection (A) of Section 24 of the Tax Code, as amended); and other winnings (except winnings from Philippine Charity Sweepstakes and lotto amounting to ₱10,000 or less which shall be exempt) derived from sources within the Philippines – Twenty percent (20%)\n\n[/cs_content_seo][/cs_element_accordion][/cs_element_layout_column][cs_element_layout_column _id=”16″ ][cs_element_text _id=”17″ ][cs_content_seo] (2) Royalties on books, as well as other literary works and musical compositions – Ten percent (10%).\n\n[/cs_content_seo][/cs_element_layout_column][cs_element_layout_column _id=”18″ ][cs_element_text _id=”19″ ][cs_content_seo] (3) Interest income received by a resident individual taxpayer from a depositary bank under the Foreign Currency Deposit System – Seven and one-half percent (7.5%).\n\n[/cs_content_seo][/cs_element_layout_column][cs_element_layout_column _id=”20″ ][cs_element_accordion _id=”21″ ][cs_element_accordion_item _id=”22″ ][cs_content_seo](3) is amended by RR 11-2018\n\n(3) Interest income received by an individual taxpayer from a depository bank under the Expanded Foreign Currency Deposit system – Fifteen percent (15%)\n\n[/cs_content_seo][/cs_element_accordion][/cs_element_layout_column][cs_element_layout_column _id=”23″ ][cs_element_text _id=”24″ ][cs_content_seo] (4) Interest income from long-term deposit or investment in the form of savings, common or individual trust funds, deposit substitutes, investment management accounts and other investments evidenced by certificates in such form prescribed by the Bangko Sentral ng Pilipinas which was pre-terminated by the holder before the fifth (5th) year at the rates herein prescribed to be deducted and withheld from the proceeds thereof based on the length of time that the instrument was held by the taxpayer –
Holding Period Rate
Four (4) years to less than five (5) years 5%
Three (3) years to less than four (4) years 12%
Less than three (3) years 20%\n\n[/cs_content_seo][/cs_element_layout_column][cs_element_layout_column _id=”25″ ][cs_element_text _id=”26″ ][cs_content_seo] (5) Cash and/or property dividends actually or constructively received form a domestic corporation, joint stock company, insurance or mutual fund companies or on the share of an individual in the distributable net income after tax of a partnership (except general professional partnership) or on the share of an individual on the net income after tax of an association, a joint account or a joint venture or consortium of which he is a member or a co-venturer –
6% – beginning January 1, 1998
8% – beginning January 1, 1999
10% – beginning January 1, 2000 and thereafter
The tax on cash and property dividends shall only be imposed on dividends which are declared from profits of corporations made after December 31, 1997.\n\n[/cs_content_seo][/cs_element_layout_column][cs_element_layout_column _id=”27″ ][cs_element_accordion _id=”28″ ][cs_element_accordion_item _id=”29″ ][cs_content_seo](5) is amended by RR 11-2018\n\n(5) Cash and/or property dividends actually or constructively received from a domestic corporation, joint stock company, insurance or mutual fund companies and regional operating headquarters of multinational companies, or on the share of an individual in the distributable net income after tax of a partnership (except general professional partnership) of which he is a partner, or on the share of an individual in the net income after tax of an association, a joint account or a joint venture or consortium taxable as a corporation of which he is a member or co-venturer – Ten percent (10%)\n\n[/cs_content_seo][/cs_element_accordion][/cs_element_layout_column][cs_element_layout_column _id=”30″ ][cs_element_text _id=”31″ ][cs_content_seo] (6) On capital gains presumed to have been realized from the sale, exchange or other disposition of real property located in the Philippines, classified as capital assets, including pacto de retro sales and other forms of conditional sales based on the gross selling price or fair market value as determined in accordance with Sec. 6(E) of the Code (i.e the authority of the Commissioner to prescribe the real property values), whichever is higher – Six percent (6%)
In case of disposition of real property made by individuals to the government or any of its political subdivisions or agencies or to government-owned or controlled corporations, the tax to be imposed shall be determined either under Section 24(A) of the Code for normal income tax for individual citizens and residents or under Section 24(D)(1) of the Code for the final tax on capital gains from sale of property at six percent (6%), at the option of the taxpayer.\n\n[/cs_content_seo][/cs_element_layout_column][cs_element_layout_column _id=”32″ ][cs_element_accordion _id=”33″ ][cs_element_accordion_item _id=”34″ ][cs_content_seo](7) added by RR …\n\n[/cs_content_seo][/cs_element_accordion][/cs_element_layout_column][cs_element_layout_column _id=”35″ ][cs_element_accordion _id=”36″ ][cs_element_accordion_item _id=”37″ ][cs_content_seo](8) added by RR 11-2018\n\n(8) Capital Gains from Sale of Shares of Stock Not Traded in the Stock Exchange – On the net capital gains realized during the taxable year from the sale, barter, exchange or other disposition of shares of stock in a domestic corporation – Fifteen percent (15%)\n\n[/cs_content_seo][/cs_element_accordion][/cs_element_layout_column][cs_element_layout_column _id=”38″ ][cs_element_text _id=”39″ ][cs_content_seo] (B) Income Payment to Non-resident Aliens Engaged in Trade or Business in the Philippines. – The following forms of income derived from sources within the Philippines shall be subjected to final withholding tax in the hands of a non-resident alien individual engaged in trade or business within the Philippines, based on the gross amount thereof and at the rates prescribed therefor:\n\n[/cs_content_seo][/cs_element_layout_column][cs_element_layout_column _id=”40″ ][cs_element_text _id=”41″ ][cs_content_seo] (1) On Certain Passive Income – A tax of twenty (20%) percent is hereby imposed on certain passive income received from all sources within the Philippines.\n\n[/cs_content_seo][/cs_element_layout_column][cs_element_layout_column _id=”42″ ][cs_element_text _id=”43″ ][cs_content_seo] (a) Cash and/or property dividend from a domestic corporation or from a joint stock company, or from an insurance or mutual fund company or from a regional operating headquarter of a multinational company;\n\n[/cs_content_seo][/cs_element_layout_column][cs_element_layout_column _id=”44″ ][cs_element_text _id=”45″ ][cs_content_seo] (b) Share in the distributable net income after tax of a partnership (except general professional partnership) of which he is a partner, or share in the net income after tax of an association, a joint account, or a joint venture of which he is a member or a co-venturer;\n\n[/cs_content_seo][/cs_element_layout_column][cs_element_layout_column _id=”46″ ][cs_element_text _id=”47″ ][cs_content_seo] (c) Interests from any currency bank deposit and yield or any other monetary benefit from deposit substitutes and from trust funds and similar arrangements;\n\n[/cs_content_seo][/cs_element_layout_column][cs_element_layout_column _id=”48″ ][cs_element_text _id=”49″ ][cs_content_seo] (d) Royalties (except royalties on books, as well as other literary works and musical compositions which shall be subject to 10% final withholding tax);\n\n[/cs_content_seo][/cs_element_layout_column][cs_element_layout_column _id=”50″ ][cs_element_text _id=”51″ ][cs_content_seo] (e) Prizes (except prizes amounting to ten thousand pesos (P10,000.00) or less subject to tax under Sec. 25 (A) (1) of the Code for the normal rates of income tax for individuals) and other winnings (except Philippine Charity Sweepstakes winnings and lotto winnings).\n\n[/cs_content_seo][/cs_element_layout_column][cs_element_layout_column _id=”52″ ][cs_element_text _id=”53″ ][cs_content_seo] (2) Interest income derived from long-term deposits or investment in the form of savings, common or individual trust funds, deposit substitutes, investment management accounts and other investment evidenced by certificates in such form prescribed by the Bangko Sentral ng Pilipinas which was pre-terminated by the holder before the fifth (5th) year at the rates herein prescribed to be deducted and withheld from the proceeds thereof based on the length of time that the instrument was held by the taxpayer –
Holding Period Rate
Four (4) years to less than five (5) years 5%
Three (3) years to less than four (4) years 12%
Less than three (3) years 20%\n\n[/cs_content_seo][/cs_element_layout_column][cs_element_layout_column _id=”54″ ][cs_element_text _id=”55″ ][cs_content_seo] (3) On capital gains presumed to have been realized from the sale exchange or other disposition of real property located in the Philippines, classified as capital assets, including pacto de retro sales and other forms of conditional sales based on the gross selling price of fair market value as determined in accordance with Sec. 6(E) of the Code (i.e. the authority of the Commissioner to prescribe zonal values), whichever is higher – Six percent (6%)
In case of dispositions of real property made by individuals to government or any of its political subdivisions or agencies or to government-owned or controlled corporations, the tax to be imposed shall be determined either under Section 24(A) of the code for the normal rate of income tax for individual citizens and residents or under Section 24(D)(1) of the Code for the final tax on capital gains from sale of property at six percent (6%), at the option of the taxpayer.\n\n[/cs_content_seo][/cs_element_layout_column][cs_element_layout_column _id=”56″ ][cs_element_accordion _id=”57″ ][cs_element_accordion_item _id=”58″ ][cs_content_seo](4) added by RR\n\n[/cs_content_seo][/cs_element_accordion][/cs_element_layout_column][cs_element_layout_column _id=”59″ ][cs_element_accordion _id=”60″ ][cs_element_accordion_item _id=”61″ ][cs_content_seo](5) added by RR\n\n[/cs_content_seo][/cs_element_accordion][/cs_element_layout_column][cs_element_layout_column _id=”62″ ][cs_element_accordion _id=”63″ ][cs_element_accordion_item _id=”64″ ][cs_content_seo](6) added by RR 11-2018\n\n(6) Capital Gains from Sale of Shares of Stock Not Traded in the Stock Exchange. – On net capital gains realized during the taxable year from the sales, barter, exchange or other disposition of shares of stock in a domestic corporation – Fifteen percent (15%)\n\n[/cs_content_seo][/cs_element_accordion][/cs_element_layout_column][/cs_element_layout_row][/cs_element_section][cs_element_section _id=”65″ ][cs_element_layout_row _id=”66″ ][cs_element_layout_column _id=”67″ ][cs_element_text _id=”68″ ][cs_content_seo] (C) Income Derived from All Sources Within the Philippines by a Non-resident Alien Individual Not Engaged in Trade or Business Within the Philippines. – The following forms of income derived from all sources within the Philippines shall be subject to a final withholding tax in the hands of a non-resident alien individual not engaged in trade or business within the Philippines based on the following amounts and at the rates prescribed therefor:\n\n[/cs_content_seo][/cs_element_layout_column][cs_element_layout_column _id=”69″ ][cs_element_text _id=”70″ ][cs_content_seo] (1) On the grosss amount of income derived from all sources within the Philippines by a non-resident alien individual who is not engaged in trade or business in the Philippines as interest, cash and/or property dividends, rents, salaries, wages, premiums, annuities, compensation, remuneration, emoluments, or other fixed or determinable annual or periodic or casual gains, profits and income and capital gains – Twenty five percent (25%).\n\n[/cs_content_seo][/cs_element_layout_column][cs_element_layout_column _id=”71″ ][cs_element_text _id=”72″ ][cs_content_seo] (2) On capital gains presumed to have been realized from the sale, exchange or other disposition of real property located in the Philippines, classified as capital assets, including pacto de retro sales and other forms of conditional sales based on the gross selling price or fair market value as determined in accordance with Sec. 6(E) of the Code (i.e. the authority of the Commissioner to prescribe the real property values), whichever is higher – Six percent (6%)
In case of dispositions of real property made by individuals to government or any of its political subdivisions or agencies or to government-owned or controlled corporations, the tax to be imposed shall be determined either under Sec. 24(a) of the Coe for the rates of income tax for individual citizens and residents or under Sec. 24(D)(1) of the Code for the final tax on capital gains from sale of property at six percent (6%), at the option of the taxpayer.\n\n[/cs_content_seo][/cs_element_layout_column][cs_element_layout_column _id=”73″ ][cs_element_accordion _id=”74″ ][cs_element_accordion_item _id=”75″ ][cs_content_seo](3) added by RR 11-2018\n\n (3) Capital Gains from Sale of Shares of Stock Not Traded in the Stock Exchange. – On net capital gains realized during the taxable year from the sales, barter, exchange or other disposition of shares of stock in a domestic corporation – Fifteen percent (15%)\n\n[/cs_content_seo][/cs_element_accordion][/cs_element_layout_column][/cs_element_layout_row][/cs_element_section][cs_element_section _id=”76″ ][cs_element_layout_row _id=”77″ ][cs_element_layout_column _id=”78″ ][cs_element_text _id=”79″ ][cs_content_seo]Input your text here! The text element is intended for longform copy that could potentially include multiple paragraphs.\n\n[/cs_content_seo][/cs_element_layout_column][cs_element_layout_column _id=”80″ ][cs_element_accordion _id=”81″ ][cs_element_accordion_item _id=”82″ ][cs_content_seo](D) as amended by RR 11-2018\n\n(D) Income Payment to a Domestic Corporation. [formerly under letter (G)] – xxx
xxx xxx xxx
(3) Interest income derived from a depositary bank under the Expanded Foreign Currency Deposit system – Fifteen percent (15%)
xxx xxx xxx
(7) Capital Gains from Sale of Shares of Stock Not Traded in the Stock Exchange. – On net capital gains realized during the taxable year from the sales, barter, exchange or other disposition of shares of stock in a domestic corporation – Fifteen percent (15%)
xxx xxx xxx\n\n[/cs_content_seo][/cs_element_accordion][/cs_element_layout_column][/cs_element_layout_row][/cs_element_section][cs_element_section _id=”83″ ][cs_element_layout_row _id=”84″ ][cs_element_layout_column _id=”85″ ][cs_element_text _id=”86″ ][cs_content_seo]Input your text here! The text element is intended for longform copy that could potentially include multiple paragraphs.\n\n[/cs_content_seo][/cs_element_layout_column][cs_element_layout_column _id=”87″ ][cs_element_accordion _id=”88″ ][cs_element_accordion_item _id=”89″ ][cs_content_seo](E) as amended by RR 11-2018\n\n(E) Income Payment to a Resident Foreign Corporation. [formerly under letter (H)] – xxx\n\n[/cs_content_seo][/cs_element_accordion][/cs_element_layout_column][/cs_element_layout_row][/cs_element_section][cs_element_section _id=”90″ ][cs_element_layout_row _id=”91″ ][cs_element_layout_column _id=”92″ ][cs_element_text _id=”93″ ][cs_content_seo]Input your text here! The text element is intended for longform copy that could potentially include multiple paragraphs.\n\n[/cs_content_seo][/cs_element_layout_column][cs_element_layout_column _id=”94″ ][cs_element_accordion _id=”95″ ][cs_element_accordion_item _id=”96″ ][cs_content_seo](F) as amended by RR 11-2018\n\n(F) Income Derived from All Sources Within the Philippines by Non-Resident Foreign Corporation [formerly under letter (I)] – xxx\n\n[/cs_content_seo][/cs_element_accordion][/cs_element_layout_column][/cs_element_layout_row][/cs_element_section][cs_element_section _id=”97″ ][cs_element_layout_row _id=”98″ ][cs_element_layout_column _id=”99″ ][cs_element_text _id=”100″ ][cs_content_seo]Input your text here! The text element is intended for longform copy that could potentially include multiple paragraphs.\n\n[/cs_content_seo][/cs_element_layout_column][cs_element_layout_column _id=”101″ ][cs_element_accordion _id=”102″ ][cs_element_accordion_item _id=”103″ ][cs_content_seo]Accordion Item 1\n\n[/cs_content_seo][/cs_element_accordion][/cs_element_layout_column][/cs_element_layout_row][/cs_element_section][cs_element_section _id=”104″ ][cs_element_layout_row _id=”105″ ][cs_element_layout_column _id=”106″ ][cs_element_text _id=”107″ ][cs_content_seo]Input your text here! The text element is intended for longform copy that could potentially include multiple paragraphs.\n\n[/cs_content_seo][/cs_element_layout_column][cs_element_layout_column _id=”108″ ][cs_element_accordion _id=”109″ ][cs_element_accordion_item _id=”110″ ][cs_content_seo]Accordion Item 1\n\n[/cs_content_seo][/cs_element_accordion][/cs_element_layout_column][/cs_element_layout_row][/cs_element_section][cs_element_section _id=”111″ ][cs_element_layout_row _id=”112″ ][cs_element_layout_column _id=”113″ ][cs_element_text _id=”114″ ][cs_content_seo]Sec. 2.57.2. Income payment subject to creditable withholding tax and rates prescribed thereon. – Except as herein otherwise provided, there shall be withheld a creditable income tax at the rates herein specified for each class of payee from the following items of income payments to persons residing in the Philippines:\n\n[/cs_content_seo][/cs_element_layout_column][cs_element_layout_column _id=”115″ ][cs_element_accordion _id=”116″ ][cs_element_accordion_item _id=”117″ ][cs_content_seo]Section 2.57.2 is amended by RR 11-2018\n\nSECTION 2. Certain items of Section 2.57.2 of RR No. 2-98 is hereby renumbered and further amended to read as follows:
SECTION 2.57.2. Income Payments Subject to Creditable Withholding Tax and Rates Prescribed Thereon. – Except as herein otherwise provided, there shall be withheld a creditable income tax at the rates herein specified for each class of payee from the following items of income payments to persons residing in the Philippines:
\n\n[/cs_content_seo][/cs_element_accordion][/cs_element_layout_column][cs_element_layout_column _id=”118″ ][cs_element_text _id=”119″ ][cs_content_seo] (A) Professional fees, talent fees, etc., for services rendered by individuals. – On the gross professional, promotional and talent fees or any other form of remuneration for the services of the following individuals – Ten percent (10%).\n\n[/cs_content_seo][/cs_element_layout_column][cs_element_layout_column _id=”120″ ][cs_element_accordion _id=”121″ ][cs_element_accordion_item _id=”122” ][cs_content_seo](A) is amended by RR 11-2018\n\n(A) Professional fees, talent fees, etc. for services rendered – On the gross professional, promotional, and talent fees or any other form of remuneration for the services rendered by the following:
Individual payee:
If gross income for the current year did not exceed ₱3M – Five percent (5%)
If gross income is more than ₱3M – Ten percent (10%)
Non-Individual payee:
If gross income for the current year did not exceed ₱720,000 – Ten percent (10%)
If gross income exceeds ₱720,000 – Fifteen percent (15%)
(1) Those individually engaged in the practice of profession or callings; lawyers; certified public accountants; doctors of medicine; architects; civil, electrical, chemical, mechanical, structural, industrial, mining, sanitary, metallurgical and geodetic engineers; marine surveyors; doctors of veterinary science; dentist; professional appraisers; connoisseurs of tobacco; actuaries; interior decorators, designers, real estate service practitioners (RESP), (i.e. real estate consultants, real estate appraisers and real estate brokers) requiring government licensure examination given by the Real Estate Service pursuant to Republic Act No. 9646 and all other profession requiring government licensure examination regulated by the Professional Regulations Commission, Supreme Court, etc.
For professional fees paid to medical practitioners (includes doctors of medicine, doctors of veterinary science and dentists) by hospitals and clinics or paid directly by health maintenance organizations (HMOs) and/or similar establishments [formerly under letter (I)]:
(a) It shall be the duty and responsibility of the hospitals, clinics, HMOs and similar establishments to withhold and remit taxes due on the professional fees of their respective accredited medical practitioners, paid by patients who were admitted and confined to such hospitals and clinics. Hospitals, clinics, HMOs and similar establishments must ensure correct taxes on the professional fees of their medical practitioners have been withheld and timely remitted to the Bureau of Internal Revenue (BIR). For this purpose, hospitals and clinics shall not allow their medical practitioners to receive payment of professional fees directly from patients who were admitted and confined to such hospital or clinic and, instead, must include the professional fees in the total medical bill of the patient which shall be payable directly to the hospital or clinic.
(b) Exception – The withholding tax herein prescribed shall not apply whenever there is proof that no professional fees has in fact been charged by the medical practitioner and paid by his patient. Provided, however, that this fact is shown in a sworn declaration jointly executed by the medical practitioner, and the patient or his duly authorized representative, in case the patient is a minor or otherwise incapacitated. This sworn declaration, to be executed in the form presented in Annex “A” of these Regulations, shall form part of the records of the hospital or clinic and shall constitute as part of the its records and shall be made readily available to any duly authorized Revenue Officer for tax audit purpose. Provided, further, that the said administrator of the hospital or clinic shall inform the concerned LTS/RR/RDO having jurisdiction over such hospital or clinic about any medical practitioner who fails or refuses to execute the sworn statement herein prescribed, within ten (10) days from the occurrence of such event.
(c) Hospitals and clinics shall submit the list containing the names and addresses of the medical practitioners in the following classifications, every 15th day after the end of each calendar quarter, to the concerned Collection Division of the Revenue Region for non-large taxpayers and at the Large Taxpayers Document Processing and Quality Assurance Division (LT-DPQAD) in the National Office or Large Taxpayers District Office (LTDO) in the Region for large taxpayers, where such hospital of clinic is registered, using the prescribed format.
(i) Medical practitioners whose professional fee was paid by patients directly to the hospital or clinic.
(ii) Medical practitioners who did not charge any professional fee from their patients.
(d) For this purpose, the term ‘medical practitioners’ shall likewise include medical technologists, allied health workers (e.g. occupational therapists, physical therapists, speech therapists, nurses, etc.) and other medical practitioners who are not under an employer-employee relationship with the hospital or clinic, or HMO and other similar establishments.
(e) Hospitals and clinics shall be responsible for the accurate computation of taxes to be withheld on professional fees paid by patients thru the hospitals and clinics, in the same way that HMOs shall be responsible for the computation of taxes to be withheld from the professional fees paid by them to the medical practitioners, and the timely remittance of the applicable expanded withholding tax.
The list of all income recipients-payees in this Subsection shall be included in the Alphalist of Payees Subject to Expanded Withholding Tax attached to BIR Form No. 1604E (Annual Information Return of Creditable Income Taxes Withheld (Expanded) / Income Payments Exempt from Withholding Tax).
Likewise, the hospitals, clinics or HMOs shall issue a Certificate of Creditable Withholding Tax Withheld at Source (BIR Form No. 2307) to medical practitioners who are subjected to withholding, every 20th day following the close of the taxable quarter or upon request of the payee.
All hospitals and clinics shall submit to the BIR (Collection Division of the Regional Office having jurisdiction over the place where the income earner is registered/LT-DPQAD for large taxpayers in Metro Manila/LTDO for large taxpayers outside Metro Manila), in three (3) copies [two (2) copies for the the BIR and one (1) copy for the taxpayer], a sworn statement executed by the president/managing partner of the corporation/company as to the complete and updated list of medical practitioners accredited with them.\n\n[/cs_content_seo][/cs_element_accordion][/cs_element_layout_column][cs_element_layout_column _id=”123″ ][/cs_element_layout_column][cs_element_layout_column _id=”124″ ][/cs_element_layout_column][/cs_element_layout_row][/cs_element_section][/cs_content]