Question & AnswerQ&A (PHILHEALTH CIRCULAR NO. 14, S. 2005)
It pertains to the implementation of Bureau of Internal Revenue Memorandum Circular No. 21-2005 concerning the tax treatment of PhilHealth reimbursements for professional fees payable to the Chief of Hospital in government hospitals.
No, such reimbursements shall no longer be subject to the 10% expanded withholding tax.
The accredited government hospital is responsible for withholding tax on compensation, issuance of Employer's Certificate of Compensation Payment/Tax Withheld (BIR Form No. 2316), and submission of the Annual Information Return.
Yes, the distributed share forms part of compensation income for the taxable year subject to the appropriate withholding tax rate.
The policy is effective for claims received by PhilHealth starting August 1, 2005.
BIR Form No. 2304 certifies that the income payment to the Chief of Hospital is not subject to withholding tax, facilitating compliance and reporting to the Bureau of Internal Revenue.
The circular implements Bureau of Internal Revenue Memorandum Circular No. 21-2005 concerning withholding tax procedures for certain PhilHealth payments.
They must distribute the share to medical and non-medical personnel, withhold the appropriate tax on compensation, issue Employer's Certificates for Compensation Payment and Tax Withheld, and submit the Annual Information Return to the BIR.