Revenue Regulations No. 21-2018

Revenue Regulations No. 21-2018 primarily amends certain provisions of RR No. 11-2018, which implements the Tax Reform for Acceleration and Inclusion (TRAIN) Law. RR No. 21-2018 focuses on the withholding tax on various income payments. Here are the key points relevant to doctors:


Withholding Tax Rates on Professional Fees
RR No. 21-2018 revises the withholding tax rates on professional fees earned by doctors and other professionals. The new rates are as follows:

  • 5% if the doctor’s gross income for the current year does not exceed PHP 3 million
  • 10% if the doctor’s gross income for the current year exceeds PHP 3 million

Withholding tax threshold
Under RR No. 21-2018, the threshold for withholding tax on professional fees has been increased from PHP 10,000 to PHP 250,000. This means that if the total payments made to a doctor within a taxable year are equal to or less than PHP 250,000, they are exempt from withholding tax. However, if the total payments exceed PHP 250,000, withholding tax will be applied on the excess amount.

Sworn declaration of gross income
RR No. 21-2018 requires doctors and other professionals to submit a sworn declaration of their estimated gross income for the current year to their income payors (e.g., hospitals, clinics, or individual clients). This declaration will help the income payors determine the applicable withholding tax rate (5% or 10%) to be applied to the doctor’s professional fees.

Certificate of Creditable Tax Withheld at Source (BIR Form 2307)
Doctors should ensure that their income payors issue BIR Form 2307 as proof of withheld tax. The creditable tax can be used as a tax credit against the doctor’s income tax liability.


BIR References:
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