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This Circular prescribes that for medical cases
and surgical procedures where the entire case rate amount is required to be
paid directly to the facility, the application of the expanded withholding tax
rate shall be on the entire case rate payment at the rate of 2%.
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The hospitals/clinics of facilities, being the
party in control of the fund, are obliged to withhold the 10% or 15% expanded
withholding tax on payments to be made to doctors or medical practitioners for
their professional fees.
*. PHIC is likewise under the
obligation to comply with the 5% withholding VAT on government money payments
under RR No. 16-2005. It is emphasized that for purposes of VAT exemption,
Section 109 (G) of the Tax Code covers only medical, dental, hospital and
veterinary services, except those rendered by professionals. Thus, PHIC should
withhold the 5% VAT on money payments to professionals and other facilities, if
any, who are not VAT exempt.
RMC No. 49-2011 dated October 3, 2011 Further Clarification on EWT on Philhealth Payments
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