Presentation Transcript

1. A TAX BRIEFING FOR Cashiers/Secretaries of Medical Practitioners Social Hall, BIR Building Bolton Ext., Davao City Nov. 29, 2011 8:00 – 10:30am and 1:00 – 3:30pm Presented by: SUSAN A. DAJAO-TUSOY, CPA, MPS Asst. Chief, Assessment Division Revenue Region 19-Davao City

2. Objectives of this briefing • To orient the cashiers/secretaries of medical practitioners on the following: • Registration • Invoicing and • Bookkeeping Requirements • To review the participants of the reportorial requirements as required by existing rules and regulations;

3. Objectives of this briefing • To apprise the participants of the common violations committed by taxpayers and the corresponding penalties; and • At the end of the session, the participants should realize the importance of their role as cashiers/secretaries of medical practitioners in the latter’s compliance to tax laws and regulations.

4. Check your compliance • 1. On registration w/ the BIR. • 2. On issuance of authorized ORs/INVOICES • 3. On keeping and maintaining of Books of Accounts. • 4. On withholding & remittance of w/holding taxes, if • applicable. • 5. On filing of required tax returns and payment of • taxes due thereon. • 6. On submission of required information & returns to • the BIR.

5. REGISTRATION REQUIREMENTS

6. When to register • On or before the commencement of business • Before payment of any tax due • Upon filing of a return, statement or declaration as required by the NIRC. • Employee: within 10 days from date of employment

7. REGISTRATIONREQUIREMENTS INDIVIDUALS: 1. BC or any ID showing applicant’s complete name, address, birthday & signature, such as but not limited to driver’s license, PRC ID and/or passport. If applicant is a married woman, marriage contract shall be required; 2. PTR for the current year, if applicable; and 3) Lease contract, if applicable.

8. REGISTRATION REQUIREMENTS GENERAL PROFESSIONAL PARTNERSHIPs (GPPs) 1) Articles of Partnership, or Partnership Agreement; 2) Mayor’s permit or application for the permit duly received by the concerned LGU; 3) Lease contract, if applicable

9. BIR Registration Procedures PRIMARY REGISTRATION SECONDARY REGISTRATION STAGE 1 STAGE 2 Application & Issuance of TIN Registration of Business/Practice of Profession/Employment Registration of books, Issuance of ATP, CAS and Loose-leaf

10. PRIMARY REGISTRATION 1. ACCOMPLISH APPLICATION FORM: • 1901 for individuals and 1903 for GPPs • Applicable tax types are selected for registration • Submit application together with the applicable attachments to the Revenue District Office (RDO) having jurisdiction over your principal place of business or practice of profession. TIN WILL BE VERIFIED OR ISSUED AT THIS STAGE

11. Your Unique Identifier: TIN • Only one TIN for life • Multiple TIN is punishable by law. • Professionals may electronically secure TIN through e-REG system

12. A. PRIMARY REGISTRATION 2. PAY REGISTRATION FEE of P500 upon registration using Payment Form 0605 and/or DOCUMENTARY STAMP TAX on Lease Contract, if applicable, using Form 2000, to any AAB or Revenue Collection Officer located w/in the RDO; • Attend taxpayer briefing as scheduled or secure briefing materials at the RDO before release of COR and “Ask for Receipt” Notice.

13. REGISTRATION OF BRANCH Medical practitioners are also required to register and pay the corresponding Registration Fee for each separateor distinct establishment.

14. Practitioner’s Usual Tax Types • Registration Fee (RF) • Income Tax • Business Tax • VAT – 12% if gross annual fees exceed 1.5M or if opted to register as VAT Taxpayer • Percentage tax – 3% on the gross, if gross annual income is below 1.5M

15. Practitioner’s Usual Tax Types • Withholding Taxes - withholding tax on compensation income paid - expanded withholding tax on income payments made

16. B. SECONDARY REGISTRATION Apply for Authority to Print (ATP) official receipts/invoices using Form 1906 together with required attachments: NEW TPs: Job order; final clear sample of receipt/OR; photo copy of the ff: application for registration; RF payment; COR

17. B. SECONDARY REGISTRATION OLD TPs: Job order; final clear sample; last booklet printed for verification; photo copy of the ff: Registration Fee Payment Previous Authority to Print and Certificate of Registration After printing, register ORs/Invoices thru Printer’s Certificate of Delivery (PCD) – ask your printer

18. B.SECONDARY REGISTRATION – CON’T. • Apply for registration of books of accounts, basically a Journal, Ledger, and applicable subsidiary books The BIR records your latest volume in your registration database. All of the above to be done within 30 days from date of registration

19. INVOICING REQUIREMENTS

20. Invoicing Requirements • Issue sequentially Official Receipt (OR) for fees received • Sales Invoice for sale of goods (medicines). • Each OR issued shall indicate the name and address of the client, date of transaction, nature of service rendered and the amount.

21. Invoicing Requirements • The OR shall be accomplished at least in duplicate • The duplicate retained & preserved in place of business for 3 years from close of taxable year.

22. Sample of Commercial Invoices Sample only

23. Sample of Commercial Invoice – A Non-VAT Official Receipt

24. Sample of Commercial Invoice – A VAT Sales Invoice

25. Proper Invoicing and Receipting of Output Tax • Revenue Regulations 18-2011 • Reiterates Sec. 237 of the Tax Code that VAT-registered taxpayers should separately bill the VAT. • The amount shall be shown as a separate item in the invoice or receipt 25

26. Proper Invoicing and Receipting of Output Tax Ex: If the amount charged is P560.00, it shall be presented in the following manner: Professional Fee (P560.00/112%) P 500.00 Add12% VAT (12% of P500.00 60.00 Total Amount charged P 560.00 26

27. Proper Invoicing and Receipting of Output Tax VAT should be billed separately 27

28. Proper Invoicing and Receipting of Output Tax • Penalty • for each act or omission, be punished by a fine of not less than P1,000.00 but not more than P50,000.00 and • suffer imprisonment of not less than two (2) years but not more than four (4) years. 28

29. The importance of Asking for Receipts • To support input tax claims • Will facilitate audit trail • To ascertain that sales transactions are properly recorded • Corresponding taxes are paid • To support business purchases/expenses 29

30. BOOKKEEPING REQUIREMENTS

31. BOOKKEEPING REQUIREMENTS • Cash or accrual • Preserved within the prescriptive period of 3yrs • Gross receipts exceeding P150,000 in any given quarter must be audited by a CPA

32. BOOKKEEPING REQUIREMENTS • Transactions for the day must be entered in books on or before 12nn the following day. Balances transferred to Ledger day following end of month • It’s not required to register new set of books every year; only before the pages of current book is almost used up.

33. A PRACTITIONER’S SUBSIDIARY BOOK’s CONTENTS • Daily list of clients w/ the corresponding fees including those free of charge, per branch • Name and address • Date • Official receipt no. • Amount charge • Must be registered with the BIR

34. Original Certificate of Registration, Registration Fee and the Ask for Receipt Notice must be conspicuously displayed in the physician’s place of business and/or clinic Tax Compliance Verification Drive (Tax mapping)

35. C. UPDATE REGISTRATION DATA Accomplish Form 1905 and submit to your home RDO for: • Change of registered address • Change of registered activity • Change of tax types (cancellation or addition) • Additional personal exemption

36. Compliance Requirements

37. Doctors as Withholding Agent (as payor) • Required to Withhold Taxes • Expanded Withholding Tax • Rentals – 5% • Contractors – 2% • etc. (see BIR Form 1601E) • Salary of employees, if paying more than the Minimum Wage (Region XI – Non-agri. sector is 286.00 minimum wage per day) (RMC 11-2011)

38. Doctors as Withholding Agent (as payor) • Example: Dr. A is renting a clinic space at P30,000/mo. Expanded Withholding Tax is P 30,000 x 5% = P1,500.00 Due date: Every 10th day of the following month except for the month of Dec., which shall be due on Jan. 15

39. Doctors as Withholding Agent (as payor) • Consequence if not remitted on time: Computation: Basic Tax (P30,000 x 5%) P 1,500.00 Add: 25% surcharge P 375.00 20% interest per annum* 24.65 comp. pen for late payment 700.00 1,099.65 Total Payable P 2,599.65 *assuming payment was delayed for 30 days (P1,500 x 20% x 30/365 days)

40. Doctors are Subject to Withholding Tax (as payee) on their Professional Fees Expanded Withholding Tax(EWT) creditable against Income Tax 15% if exceeding P720T, 10% for less than Disclosure Requirement (RR 12-01) Using the Notarized Sworn Declaration (Annex A of RR 12-01) Submit to the Collection Division Due on June 30 each year or within 15 days when the income reaches P720,000 whichever comes first

41. It shall be the duty and responsibility of the hospital, clinic or HMO to remit taxes withheld from the ff: PF paid by HMOs to medical practitioners PF paid by patients to medical practitioners thru hospitals or clinics PF paid by patients directly to medical practitioners The applicable 10% of 15% EWT, shall in turn be given by the medical practitioners directly to the acctg. Office of the hospitals or clinics The hospital shall issue BIR Form 2307 Doctors are Subject to Withholding Tax (as payee) on their Professional Fees

42. Except: When there is proof that no PF has in fact been charged and paid by his patient The patient/representative to execute Sworn Declaration (Annex A of RR 12-98) Shall form part of the records of the hospital/clinic Must be readily available for tax audit purposes Doctors are Subject to Withholding Tax (as payee) on their Professional Fees

43. On Government Money Payments (Ex: Payments of PHIC to medical doctors) 5% of Gross Income if VAT Registered Taxpayer (creditable against VAT liability) 3% of Gross Receipts for Non-VAT Taxpayer (creditable against Percentage Tax liability) Doctors are Subject to Withholding Tax (as payee) on their Professional Fees

44. HOW TO COMPUTE Income Tax Formula: Aggregate professional income xxx Less: Allowable deductions or 40% OSD (of Gross Fees) (xxx) Personal & Add’l Exemptions (xxx) Taxable income xxx Tax due (see tax table on Form 1701) xxx Less Creditable withholding tax (Form 2307) * xxx Tax Payable (Overpayment) xxx *should be supported with valid BIR Form 2307 44

45. HOW TO COMPUTE Income Tax Exemptions are comprised of Personal Exemption of P50,000 & Additional Exemption of P25,000 for each qualified dependent child not exceeding 4. Valid claimant for additional exemption is the husband but wife can claim if the husband executes waiver. 45

46. HOW TO COMPUTE Income Tax Health/hospitalization premium is allowed to the extent of P2,400 if aggregate family income does not exceed P250,000. For married individuals, the spouse who claims additional personal exemption shall claim the premium deduction. 46

47. HOW TO COMPUTE Percentage Tax Formula: Gross Professional Fees Received P xxxx Multiply by tax rate 3 % PercentageTax Due P xxxx 47

48. HOW TO COMPUTE VAT-regular transaction Formula: Output Tax (Gross receipts x 12%) P xxx Less: Input Tax (VAT taxable purchases x 12%) xxx VAT Payable P xxx 48

49. HOW TO COMPUTE VAT-gov’t transaction Formula: Output Tax (12% of Gross receipts ) P xxx Less Standard Input Tax (7% of gross receipts) xxx VAT Payable P xxx Less 5% withholding tax xxx VAT Payable P xxx 49 49

50. The importance of Withholding Tax Certificates (Form 2306/2307) • To support tax credit claims per return • No certificate, no tax credit allowed • Serve as proof of transaction • Be conscientious in gathering the withholding tax certificates on time 50

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