The Bureau of Internal Revenue (BIR) are doing their regular rounds or “Tax Mapping” to different business establishments to inspect compliance, and doctor’s clinic is one of their favorite. Tax Mapping is also called as Tax Compliance Verification Drive done usually every quarter.
Its purpose is to inspect compliance of business establishments like your clinic regarding the registration, invoicing, bookkeeping and other rules and regulation to catch tax evaders.
They are good in catching you. There are numerous reports that some BIR collectors are posing as patients to see if you will be issuing your receipts to them. (see this report)
To avoid penalties during a Tax Mapping procedure, you have to know what they want to see and what you need to provide:
- You have to register to the BIR.
- Failure to Register: Penalties of at least 20,000.
- See this post on how to register.
- Failure to pay Annual Registration Fee on Due Date
- Penalty: 1,000
- Failure to Display the following in your Clinic:
- BIR certificate of registration
- Annual Registration fee and
- Notice to public “ASK FOR RECEIPT” signage
- Penalty: 1,000 per offense. If you don’t have the 3 documents displayed above, your penalty is 3,000.
- Failure or refusal to issue receipts
- 1st Offense
- Failure = 10,000
- Refusal = 25,000
- 2nd Offense:
- Failure = 20,000
- Refusal = 50,000
- 1st Offense
- Books of accounts
- Professionals like doctors are expected to present two books: the Books of Income and Books of Expenses.
- What are you required to do to these books:
- Register the books of accounts
- Keep the Books of Account in your CLINIC or place of practice
- Make entries in the book (you may have a registered book that is in your place of practice, but it could be blank if you don’t make entries).
- Penalties: Graduated Rates of 200 – 200,000 depending upon the degree of your offense, like the time there is no record/books not in the clinic.
- Register your receipts to BIR
- Penalty: failure to register is a fine of 1,000 – 50,000.
Do you want to simplify your life and avoid penalties?
I had the opportunity to teach Taxation 101 for Doctors in a group of doctors in St. Claire’s Hospital in Makati yesterday sponsored by Taxumo. Let me tell you their story, you may need them someday.
Taxumo is a support technology that has one sole purpose, to simplify your life with tax and your love/hate relationship with BIR. They will be launching their web and mobile application soon. I have seen their prototype and it encompasses taxation services from registration, computation, filling up forms to submission and payment – all could be done online. Wow!
Please do let us know what you think by commenting below.
“Knowledge is power”
If you know what you need to have and accomplish during the Tax Mapping, you can avoid the penalties and the stress that it could give.
Informing you about life,
Read More:
- Part 1: How to Register as a Doctor in BIR
- Part 2: Guide to Moonlighters/Starting Private Practice
- Part 3: How to File your INCOME TAX RETURN as Physician
- Part 4: Penalties for not filing your INCOME TAX on time
- Part 5: How to Compute your INCOME TAX RETURN
- Why Most Filipino Doctors are Not RICH? What are your Obstacles?
Do you want to know how to file your taxes online without going out?
These courses will teach you how to file and pay your Income Tax returns at the comfort of your home.
Start to end, step by step, no going out. From encoding, filing and payment. (All done online)
Enroll in our online course:
For Physicians/Doctors/Dentists/Vets:
https://pro.myfinancemd.com/taxcination/
For Financial Advisors:
https://pro.myfinancemd.com/taxcination-for-financial-advisors/
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Thank you for this great article! This is a big help for us starting our practice 🙂 I would like to ask something: There are hospitals where they ask for a receipt when you collect your PF/philhealth and insurance reimbursements- which has already been deducted with withholding tax. How do you deal with this? Because my accountant still includes this when computing for the monthly tax, which I feel is getting 10% again from the already taxed amount. I look forward to your reply. Thanks and God bless!
HI, monthly percentage tax is different from the 10% or 15% withholding tax they are getting from you every month. You can ask your accountant should you still issue the receipts to them, since he/she should know that and he/she sees what they are asking from you.
Hello po doc I would like to ask a question very much like this one. I have just recieved my quarterly philhealth share do I need to declare this to the BIR for the 3% monthly percentage tax? Also the institution already deducts 10% from our basic income, do we still declare it to the BIR for the 3% monthly percentage? Example gross basic pf = 2500 10% witholding = 250 Net income of = 2250. Do declare the gross or the net income after the tax? Thanks in advanced!
Yes philhealth share should also be included in the percentage tax. 10% income tax deduction is different from the percentage tax.
Good day doctora intal. Please help/teach us hoe to maintain our books of accts.. it will really help us a lot po.
Will try to write about that in the future. Just watch out. Thanks.
Hi Dra Intal,
Thank you for this very helpful article on Tax mapping. 🙂
I have a question though, I am registered as a business/profession in my residence’s RDO (thanks for the tips you provided in your other articles 🙂 ). I work as a retainer company physician for various companies outside my RDO’s jurisdiction. I am also a retainer in an outpatient clinic, also outside my RDO’s jurisdiction. I was recently told that I have to register that particular clinic as my “branch”. I just wanted to know, if by any chance you have encountered this, if this is really a BIR-mandated practice even for physicians who are employed by outpatient clinics as retainers?
Your thoughts will be very much appreciated 🙂
Thank you and more power!
Hi, Yes, if you have other clinics of your own you need to register it as a branch from your main clinic. Your TIN now will have a branch. For example this is your TIN: 123-456-789-000, if you have branch: it will become: 123-456-789-001 and so forth.