With the recent issuance of the Bureau of Internal Revenue, medical practitioners are no longer allowed to receive professional fees directly from their patients who were admitted and confined to a hospital or client. The professional fees must be included in the total medical bill of the patient which shall be payable directly to the hospital or clinic.
The present rules require withholding tax of 15% if the income payments to the medical practitioner for the year exceeds P720,000 or 10% if otherwise, which should be deducted by the hospital or clinic and remit to the BIR.
The exception to this is whenever there is proof that no professional fee has been charged by the medical practitioner and paid by his patient. However, there should be a sworn declaration jointly executed by the medical practitioner and the patient or his duly authorized representative in case of minor or otherwise incapacitated.
The sworn statement shall form part of the records of the hospital or clinic which shall be made readily available to any duly authorized Revenue Officer for tax audit purpose. Failure to comply on the part of the medical practitioner must be reported by the hospital or clinic administrator within ten (10) days from occurrence.
Further, hospital and clinics are now required to submit the names and addresses of medical practitioners and whether they charge or did not charge any professional fee from patients. This shall be submitted every 15th day after the end of each calendar quarter to the BIR Collection Division or Large Taxpayers Document Processing and Quality Assurance Division in the National Office or Large Taxpayers District Office, where the hospital or clinic is registered.
Moreover, there is another requirement for the hospital or clinic to submit sworn statement executed by its President/Managing Partner as to the complete and updated list of medical practitioners accredited with them.