Medtax

TAXATION
FOR DOCTORS

Topnotch Medical Board Prep, nurturing med grads and helping create future doctors

WHAT YOU’LL LEARN

PREMISE

WHY UNDERSTANDING TAXES MATTERS

THE REALITY

  • Doctors are required to (1) register with the BIR, (2) issue invoices and (3) file taxes.
  • These are legal responsibilities, not optional tasks.
  • Tax compliance can ironically be good for your cash flow.

THE CHALLENGE

  • Withholding taxes are reported to BIR and that’s one way our earnings can be tracked.
  • Too many forms, rules, penalties plus no clear guidance.
  • Different RDOs and personnel can have varying interpretation and application.

This discussion aims to help you understand taxes, maximize income,
avoid penalties and generally have some peace of mind.

FUNDAMENTALS

National Internal Revenue Code

Section 237

All persons engaged in business or in the practice of their profession, including doctors, must issue registered receipts or invoices for each sale or transfer of merchandise or services.

Section 236

Every person subject to any internal revenue tax, which includes doctors, must register with the appropriate Revenue District Office (RDO) and secure a Tax Identification Number (TIN).

BIR
REGISTRATION

Registration Requirements

TIN

Alternative: Birth Certificate

Sample TIN card

PRC ID

Sample PRC ID

Professional
Tax Receipt (PTR)

Sample Professional Tax Receipt

Valid government issued
photo ID with address

Alternative: Brgy Certificate

  • Philippine National ID
  • Passport
  • Driver’s License
  • SSS UMID Card
  • Voter’s ID
  • Senior Citizen ID
  • PWD ID
  • Philhealth ID
  • Postal ID
  • GSIS eCard

Process

Collate your requirements
Proceed to your BIR RDO
Acquire your Certificate of Registration
Register your Books
Acquire your Service Invoice
  • COR
  • Form 2303
Types:
  • Cash Registry
  • Cash Disbursements
  • Patient Registry
  • SC/PWD
  • General Journal
  • General Ledger
Options:
  • Via ORUS (QR)
  • Via RDO (Stamped)
  • Via accredited printer
  • Options:
    • Permanent
    • Temporary
  • Php 1,500 mostly for 10 booklets
30 days from COR

What’s Next?

Acquire your Certificate of Registration
Register your Books
Acquire your Service Invoice
File Taxes
Register transactions onto your books
Issue invoices

TAX INDEX

TAXES
Tax TypeQuarterBIR FormsDeadlines
Income Tax1st Quarter1701QMay 15
2nd Quarter1701QAugust 15
3rd Quarter1701QNovember 15
Annual1701A or 1701April 15 of the following year
Percentage Tax1st Quarter2551QApril 25
2nd Quarter2551QJuly 25
3rd Quarter2551QOctober 25
4th Quarter2551QJanuary 25 of the following year
Registration Fee (Discontinued)Annual0605January 31
PTR AND SWORN DECLARATION
Tax TypeQuarterDeadlines
Professional Tax ReceiptAnnualJanuary 31
Sworn DeclarationAnnualJanuary 15
JANUARY

15Sworn
declaration

31PTR

APRIL

15Annual Income Tax
of Previous Year

MAY

151st Qtr
Income Tax

AUGUST

152nd Qtr
Income Tax

NOVEMBER

153rd Qtr
Income
Tax

JANFEBMAR APRMAYJUN JULAUGSEP OCTNOVDEC
1ST QTR2ND QTR3RD QTR4TH QTR

What if I opt not to Register?

BIR notice to a doctor who has not registered Close up of the BIR notice text

Key Information

Tax Filing

Reporting your tax information through prescribed forms and channels.

Taxpayer
ITR Income Tax Return
BIR
vs
Tax Payment

Transfer of money from you to BIR.

Taxpayer
Money
BIR

Tax Payment

  • Our obligation to the government
  • Calculated every 3 months
vs
  • Income Tax collected in advance
  • Compared against Income Tax
Income
Tax
Withholding
Tax
Tax PayableCredit

Withholding Tax:

How BIR keeps track of us

Withholding Tax

PAYORSHospitals, Clinics,
Institutions
Alphalist
BIR
Form
2307
TAXPAYERSDoctors
Tax
Return
  • Collect proactively
  • File as income tax
  • Invoice must match 2307
  • Invoice may be issued before Form 2307

EOPT: Service Invoice
before Payment

Service Invoice Form 2307

2307 and Service Invoice
Matching

=
Form 2307
Service Invoice
Service Invoice
Service Invoice
BIR Form 2307, Certificate of Creditable Tax Withheld at Source
Payor details and income payments on Form 2307
Either or
Gross
Net
6,754.50
Withholding
355.50
What you
receive

Engagement Types

Element
Type of Engagement
  • Government: Contract of Service
  • Government: Job Order
  • Professional Service
  • Government: Plantilla
  • Private: Employment
  • Employed
  • Has active COR
Mandatory Benefits (SSS, PhilHealth, Pag‑IBIG)
You are responsible for filing your own benefits
Deducted and filed by the employer, including employer contributions
Elective
Paid Leaves
Usually none
Sick Leave and Vacation Leave, as mandated by law
As applicable to employers
BIR Registration
Required
Not required
Required
Tax Responsibility
Responsible for filing own taxes
Employer is responsible for filing income tax
  • Files own tax
  • Includes 2316 at year end
Issuance of Invoice or Receipt
Required
Not required
  • Not required for employers
  • Required for others
Tax Forms Received from Payor
Form 2307 quarterly
Form 2316 annually
Form 2307 and Form 2316
Work Status
Independent contractor
Organizational employee
Both
Income
Professional fees from patients and organizations
Salary
Both

INCOME

Graduated ISD

  • Tax Types: Income Tax & Percentage Tax
  • (Gross − Allow. Ded.) x Grad Tax Table
  • Allowable deduction = expenses

Graduated OSD

  • Same as Graduated ISD
  • Allowable deduction = 40% of Gross Inc.

Value Added Tax

  • ≥ Php 3M in earnings
  • Need to manage invoices
  • Locked in 3 years

8% Flat Tax Rate

  • No VAT or Percentage Tax
  • First Php 250k is nontaxable
  • Tax Rate: 8% after Php 250k

Graduated ISD

Income Tax

(Gross Income − Itemized Expenses) × Graduated Tax Rate

Percentage Tax

3% of Gross Income

Graduated OSD

Income Tax

(Gross Income − 40% of Gross Income) × Graduated Tax Rate

Percentage Tax

3% of Gross Income

Value Added Tax

Income Tax

(Gross Income − Itemized Expenses) × Tax Rate

Value Added Tax

Output VAT − Input VAT

8% Flat Tax Rate

Income Tax

(Gross Income − 250,000) × 8%

Income Tax

( − Php 250,000 )  X  8%  Income Tax

First Php 250,000 is nontaxable Income Tax Rate: 8%
Income Tax
  • First Php 250,000 is nontaxable
  • 8% Income Tax Rate
vs
Withholding Tax(Income Tax collected in advance)
  • 10% default
  • 5% for those with Sworn Declaration

Withholding Tax Rate

10%

WT for those with no Sworn Declaration

8%

Income Tax Rate

5%

WT for those with Sworn Declaration

2%
Sample sworn declaration (RR 11-2018, p8) Close up of the sworn declaration heading Close up of the tax option chosen on the sworn declaration Close up of the notarized signature on the sworn declaration

Sworn Declaration(RR 11-2018, p7)

Individual payees whose gross receipts/sales in a taxable year shall not exceed ₱3M, are required to submit a sworn declaration of his/her gross receipts/sales (Annex “B-1”), together with a copy of Certificate of Registration (COR), to all the income payor/withholding agents not later than January 15 of each year or at least prior to the initial payment of the professional fees/commissions/talent fees, etc in order for them to be subject to five percent (5%). The ten percent (10%) withholding tax rate shall be applied in the following cases: (1) the payee failed to provide the income payor/withholding agent of such declaration; or (2) the income payment exceeds ₱3M, despite receiving the sworn declaration from the income payee. In the case of individual payees with only one payor, the sworn declaration to be accomplished shall be Annex “B-2” and submitted, together with a copy of their COR, to the said lone income payor.

Key Info: Issuance Date

➤ Issued not later than January 15th or

➤ Prior to the initial payment of the professional fees

BIR
COMPLICATIONS

BIR
Complications

Lack of Expertise

Spreadsheet

Service
Provider

File
Management

Localization

RECOMMENDATIONS

Single File
Delivery Channel
Google Drive Facebook Viber Email

2307 and Service Invoice
Matching

=
Form 2307
Service Invoice
Service Invoice
Service Invoice

Consider the
Client Portfolio

Expertise

Client Focus

High Client Volume
Pro: Can mean higher level of expertise
Con: Overlooked taxes

Check for Digitization

Tax filing dashboard showing filed and unfiled returns

Are tax filing schedules tracked via Excel or is it tracked in an automated way?

Medtax app tax index

Plot Tax Filing Schedules

Certificate of
Registration
Tax Calendar Quarter 1Quarter 2Quarter 3Quarter 4
Books should stay with you and are updated regularly.
Medtax app accounting books

Those who plan to open clinics: consider Loose Leaf (digital accounting books)

Manage files wisely.
Have backup copies.
Medtax app file list
Calculate taxes early.
Don’t wait for deadlines.
Medtax app income tax return

THANK YOU

FAQs

FAQs

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Miscellaneous

HOW OUR SYSTEM WORKS

Form
2307 Service
Invoice

Proof of earnings such as Form 2307 and Service Invoices are uploaded onto the system

Medtax
Books of AccountsThe system generates an online books that can serve as basis for your physical books.

The system processes these data and utilizes them to generate the Tax Returns and Books of Accounts

Tax ReturnsSystemically generated, minimizing manual calculation for better accuracy.

PRICING

PRICING

Quarterly Php 2,899
  • Php 11,596 total in a year
  • Php 899 during Residency/Fellowship
OR
Annual Php 9,200
  • Save 20% or Php 2,396
  • Php 3,050/yr during Res/Fellowship
  • Php 8,000 for 3 years during Res/Fellowship

BIR REGISTRATION COSTS

ItemUnitCost (Php)
Service Invoice10 booklets1,500.00
Books1 set350.00
Documentary Stamp Tax2 pcs60.00
Special Power of Atty1 pc230.00
Service Fee3,000.00
Total5,140.00
Other Costs:
  • Sworn Declaration: Php 230.00 for 1 copy; Php 305.00 for 3 copies, Php 410.00 for 6 copies
  • Professional Tax Receipt: Php 300 plus Php 350 service fee

The above registration costs are for NCR and may change without prior notice. Costs in other areas may vary slightly.

FAQs

Quick FAQs

Q: Do I have to register with the BIR as a medical professional?
A: Yes.
Q: Do I have to issue service invoice for my 2307, even if the hospital does not require it?
A: Yes.
Q: If I register with the BIR, will it hurt my cash flow?
A: Generally, tax compliance can be good for cash flow.
Q: If I am undergoing residency or fellowship, am I required to register with the BIR and file taxes?
A: Generally, under government plantilla, no. But in a private hospital or if you’re under plantilla and have an existing COR, yes.
Q: If I fail to comply with tax filing and BIR Registration, how will the government know about it?
A: Withholding Taxes.
Q: Do I have to collate my relative expense receipts to help manage and potentially lower taxes?
A: New doctors, bad idea. Earning more than 3M, yes.

The answers are subject to further details which we’ll explore later.

Specific FAQs

Q: How do I register and file taxes?
A: We’ll cover this shortly
Q: What to do when Tax Mapping happens?
A: Comply with all instructions and at the very least, (1) Make sure your accounting books are always up to date, (2) You have Form 2307 for all earnings with withholding tax and they are properly filed, (3) Invoices have been issued to all transactions and (4) you have proper transaction trail such as having copies of all documents such as past income tax returns and even Form 2307
Q: Difference between vatable and nonvatable
A: Php 3,000,000.00 in gross earnings annually
Q: How does EOPT affect doctors?
A: (1) Those who have Official Receipts prior to EOPT should have converted them by now to Service Invoice and (2) Issue Service Invoice prior to payment. Note that you must now match Form 2307 and Service Invoice.
Q: Lahat ba ng clinics (if multiple) need magapply for a separate receipt?
A: If patients are paying you directly, yes. If patients are paying hospitals directly and hospitals are paying you, no.

The answers are subject to further details which we’ll explore later.

Tax Index

Complete list of taxes gives you a clear picture of your tax deadlines.

Medtax app tax index screen

Access prior year’s tax returns.

Indicates the tax returns that have been filed for already. Clicking this section allows you to view and download your actual tax return.

Digitized Books of Accounts

Access your Books of Accounts online. View, or download to Excel, so you can easily copy them onto your physical books.

Medtax app services screen Medtax books of accounts on the web

Advanced Management of OR and 2307

Uploading a Form 2307 in the Medtax app

Upload your Form 2307 and Service Invoices. The system will process them into measurable data which reflect the details of your earnings.

List of uploaded Form 2307 Details of uploaded Form 2307

Automatically Generate OR Drafts

Generating a service invoice draft in the Medtax app A generated service invoice draft

Generate drafts of the Service Invoice that you need to issue.

Track Other Documents

Keep track of your other documents such as PTR and COR. You can view them and download them as well.

Certificate of Registration in the Medtax app Professional Tax Receipt in the Medtax app

How we Ensure Taxes are Filed

Tax filing dashboard showing filed and unfiled returns

THANK YOU FOR YOUR TIME

Q: Do I have to register with the BIR as a medical professional?
A: Yes. The government and most hospitals require self employed professionals, including doctors in private practice, to register with the BIR.
Q: Do I have to issue service invoice for my 2307, even if the hospital does not require it?
A: Yes. BIR requires the issuance of a service invoice for every professional fee received, even if the hospital does not explicitly ask for it.
Q: If I register with the BIR, will it hurt my cash flow?
A: No. In fact, tax compliance is generally good for cash flow.
Q: If I am undergoing residency or fellowship, am I required to register with the BIR and file taxes?
A: If you are employed, under a government Plantilla, you may not register or file for closure if you have an existing COR. In all other cases, you’re generally required to file your taxes.
Q: If I fail to comply with tax filing and BIR Registration, how will the government know about it?
A: Earnings generally have withholding taxes. These are reported to the government.
Q: Do I have to collate my relative expense receipts to help manage and potentially lower taxes?
A: For new doctors earning less than Php 3M, this is for the most part not a very good idea. For those earning more than Php 3M annually, yes.

What else to expect: How your taxes are calculated, withholding tax details

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