You should register with the BIR as a medical practitioner engaged in professional practice primarily because the government requires this and because it’s good for your cash flow.

1. Section 236 of the National Internal Revenue Code (NIRC or Tax Code) requires doctors to register with the appropriate RDO before commencing professional practice. This includes registering accounting books and acquiring registered invoices.
2. The default withholding tax is 10%, which means 10% of your income is immediately deducted. If you are properly registered, you can request to lower your withholding tax to 5%. Additionally, your first PHP 250,000 is not taxable, which means any tax deducted can be filed as a tax credit.Please note that this is the withholding tax component, which represents your income tax deducted in advance. The income tax itself shall be calculated separately every quarter. For this, you have the option to pay income tax at a rate of 8%, which is still lower than the default withholding tax.To illustrate, a doctor who earned Php 250,000 and has been having 10% withholding tax from the hospitals he worked with has lost Php 12,500 in cash and Php 12,500 in tax credits, for a total of Php 25,000.
   
   

Here’s an illustration:
https://www.facebook.com/Medtaxph/posts/794043282886396

When you have professional engagements subject to withholding taxes (commonly 10% or 5%), such transactions are reported by the payor (hospital/clinic) via the Alphalist, which discloses your earnings and TIN number. This allows the BIR to monitor transactions and enforce its policies accordingly.

If flagged, the BIR can issue a First Opportunity Notice. Here is an example:
https://www.facebook.com/Medtaxph/posts/627918199498906

When you are not registered

When you are not registered with the BIR, your payors (hospitals, clinics and institutions) are required to withhold 10% of your income as tax. This means for every Php 100,000, you receive Php 90,000 and Php 10,000 is withheld and remitted directly to the BIR. 

When you are registered

When you are registered with the BIR, the following are available to you: 

• You can request to lower down withholding tax from 10% to 5%
• Your first Php 250,000 is not taxable 
• You can opt to pay your income tax at the rate of only 8%

Here’s an illustration: 

https://www.facebook.com/Medtaxph/posts/795807536043304

According to the National Internal Revenue Code, you should register with the BIR on or before the commencement of business. 

You should register your accounting books within 30 days from the time your COR is acquired.

These are the common books of accounts that doctors utilize: 

• Cash Receipts – used to record all cash received. This is the most commonly used reference when a BIR audit is being conducted. 
• Cash Disbursements – records all cash payments made, including expenses. 
• Patient Registry – records appointments set by patients 
• SC/PWD Registry – records all transactions with senior citizens and persons with disability, including their SC or PWD ID number 
• General Journal – used to record all financial transactions in chronological order 
• General Ledger – summarizes all transactions recorded in the General Journal and provides balances for each account. 

Whilst the above books can all be utilized, not all BIR personnel and RDO require them. For those under the 8% Flat Tax Rate, your taxation is not affected by expenditures or depreciation. Therefore, the contents of Cash Disbursements, which records expenditures, and General Ledger, which records balances, may not affect the contents of your income tax return. It is perhaps with this consideration that certain RDOs or BIR personnel do not necessarily require certain books such as General Ledger.

Our recommendation at the very least is to ensure the Cash Receipts book is available and constantly maintained. We further recommend checking with a tax professional and RDO to be sure. 

Acquiring the Service Invoice requires that you file an Authority to Print with the BIR. Such Authority to Print (ATP) should be submitted to and processed by a BIR-authorized printer, who will have it stamped by the BIR within 30 days. 

In a nutshell, the timing in question is the stamping of the ATP and that should be done within 30 days from the acquisition of the COR. 

A standard or permanent invoice reflects the name and address of the taxpayer and requires an Authority to Print. This document is printed by a BIR-authorized printer and can be used indefinitely without an expiration date. Typically, it takes between 1 to 4 weeks for these invoices to be printed.

If a taxpayer needs to issue invoices immediately, they can acquire BIR-printed invoices (BPI). These are generic invoices available for purchase at the BIR and do not contain the taxpayer’s information. Only one booklet with 50 leaves can be purchased. The BPI can be used for up to one year or until the booklet is fully consumed, whichever comes first.

Reference: RMC 117-2019

These are the documents that you will need to register with the BIR: 

1. TIN Number. If this is no available, provide a birth certificate under a PSA paper 
2. PRC ID, front and back 
3. Professional Tax Receipt
4. Proof of address, which can be either one of the following: 
   1. If registering at home:
      1. Valid government issued photo ID with address or
      2. Brgy Certificate with address 
      3. Lease contract agreement 
   2. If registering at your own clinic:
      1. Certificate of affiliation or 
      2. Lease contract agreement 
5. Special Power of Attorney, if registering through a proxy

Here are other things you need to know: 

• If you are not paying rent, please include a non-rental agreement, which is simply a document that states that you are not paying rent. This can also be a simple statement included in the Certificate of Affiliation. 
• If you do not have a TIN number, no need to acquire this separately. Simply issue a birth certificate during the registration with the BIR. 
• If you have a TIN that is registered as an employee in another RDO, no need to transfer this to the RDO which you are registering with as a professional. 

1. TIN Number: If not available, provide a birth certificate issued on PSA paper.
2. PRC ID: Front and back.
3. Professional Tax Receipt
4. Proof of Address: This can be one of the following:
   1. If registering at home:
      1. Valid government-issued photo ID with address, or
      2. Barangay Certificate with address
   2. If registering at your own clinic:
      1. Certificate of affiliation, or
      2. Lease contract agreement
5. Special Power of Attorney: If registering through a proxy.

Additional Information:

1. Non-Rental Agreement: If you are not paying rent, include a non-rental agreement stating that you are not paying rent. This can also be a simple statement included in the Certificate of Affiliation.
2. No TIN Number: If you do not have a TIN number, you do not need to acquire one separately. Provide a birth certificate during registration with the BIR.
3. Existing TIN Number: If you have a TIN registered as an employee in another RDO, you do not need to transfer it to the RDO where you are registering as a professional.

Doctors who are solely employed by a hospital or clinic and do not engage in independent professional practice are not required to register with the BIR separately. Their taxes are typically withheld and managed by their employer.

Employment is an engagement where your employer is responsible for filing your income tax. Indicators of employment include mandatory contributions to SSS/GSIS, PhilHealth, and PAGIBIG.

Professional practice is an engagement where you work as an independent contractor. You are self-employed and, as your own employer, responsible for filing your own taxes.

Here is a table that summarizes the difference between professional practice and employment:

Note: The above table is a general reference. We acknowledge that there are exceptions, and we highly recommend consulting a tax professional to ensure accuracy. For instance, we have encountered a professional on a Job Order whose compensation was treated as that of an employee.

If you are classified as an employee, and your residency or fellowship program treats you as such, you are not required to register separately with the BIR. Your employer will handle your tax obligations, including withholding taxes and mandatory contributions to SSS/GSIS, PhilHealth, and PAGIBIG. This typically includes engagements with government hospitals under a plantilla position.

However, if your residency or fellowship program classifies you as an independent contractor, you are required to register with the BIR. In this case, you will need to handle your own tax obligations, including filing your own taxes and paying for your own contributions to SSS/GSIS, PhilHealth, and PAGIBIG. This generally includes engagements with private hospitals or government hospitals under a job order or contract of service arrangement.

You are classified as a Mixed Income Earner. This means you are registered with the BIR, can continue to earn from your professional practice, and also earn income as an employee.

Mixed Income Earner – what are the things I need to know? 

Mixed income earners are those who are registered with the BIR and are employed partly or fully within the same year. Here are the things you need to know: 

• Certificate of Registration: There is no need to change or update your existing Certificate of Registration.
• Tax Filing: You need to continue filing taxes as a professional. If there is no income from your professional practice, file zero income but still submit the tax returns.
• Form 2316: You will receive Form 2316 at the end of the year. Include this in your annual income tax return.
• Annual Income Tax Return: When earning solely from professional practice, use Form 1701A. As a mixed income earner, use Form 1701. The main difference is in the sections where you report your income.
  • Form 1701A: Includes one column for income from private practice.
  • Form 1701: Includes two columns: one for your income as an employee and one for your income from professional practice.

If you have a Certificate of Registration (COR) as a professional and subsequently become employed, you must continue to file your taxes, even if it is to report zero income. Your taxes, as indicated in the COR, should be filed consistently, even if you are not earning in a professional capacity.

If you do not foresee any income from professional practice and plan to solely rely on your salary, consider filing for the closure of your COR.