Practicing as a Professional without BIR Registration (COR)
Wednesday, April 19, 2023 ꞏ 3 min read
The Bureau of Internal Revenue (BIR) specifically requires doctors, along with other professionals, to register with the BIR before practicing professionally. Section 237 of the National Internal Revenue Code (NIRC) mandates that 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, while section 236 of the NIRC stipulates that 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).
This article explores what can happen if professionals operate without registering with the BIR and securing a COR:
Fine for Failure to Register
Under Section 258 of the National Internal Revenue Code (NIRC), a doctor who fails to register with the BIR may be subject to a fine ranging from PHP 5,000 to PHP 20,000.
Fine for Failure to Issue Receipts/Invoices
Section 264 of the NIRC stipulates that any person who fails to issue a registered receipt or invoice can be fined between PHP 1,000 and PHP 50,000, and may face imprisonment for a minimum of two years but not more than four years.
Compromise Penalties
In addition to the prescribed fines, the BIR may impose compromise penalties for various violations, such as failure to file required tax returns or failure to maintain books of accounts. The amount of the compromise penalty depends on the nature of the violation and the doctor’s gross annual earnings.
Surcharge, Interest, and Penalties on Unpaid Taxes
If a doctor fails to register with the BIR and does not pay the correct taxes, they may be subject to a 25% surcharge on the tax due, along with interest at the rate of 12% per annum, and additional penalties for each month or fraction thereof that the taxes remain unpaid.
Criminal Charges
In severe cases of non-compliance or willful neglect of tax obligations, a doctor may face criminal charges under Section 255 of the NIRC for tax evasion. This could result in imprisonment for a minimum of two years but not more than four years, in addition to payment of the taxes due, including surcharges, interest, and penalties.
It is crucial for doctors practicing in the Philippines to register with the BIR, comply with all tax regulations, and fulfill their tax obligations to avoid these penalties and maintain their professional reputation and good standing with regulatory authorities.
The information provided in this article is for general informational and educational purposes only and is not intended to serve as legal or tax advice. The contents of this article do not supersede any revenue regulations or pronouncements issued by the Bureau of Internal Revenue (BIR) or any other relevant authorities.
This article contains condensed information, and specific circumstances can vary among doctors or other taxpayers. As such, the content should not be relied upon as a basis for any legal or BIR proceedings, nor should it be considered a substitute for professional tax advice.
Readers are encouraged to consult with a tax professional to address their specific situations and to obtain tailored guidance regarding their tax obligations and compliance. The primary aim of this article is to provide a better understanding of BIR rules and taxation in general, and it should not be used as the sole basis for making decisions related to tax matters.