VAT Exemption for Doctors and Lawyers

Effective January 1, 2004, medical and legal services rendered by duly licensed and registered doctors and lawyers are exempt from VAT
Medical services excluded are limited strictly to those provided by individuals or general professional partnerships composed exclusively of licensed and PRC-registered doctors in good standing
Legal services excluded are limited strictly to those rendered by individuals or general professional partnerships composed exclusively of lawyers duly registered with and in good standing with the Integrated Bar of the Philippines (IBP)
Services must be those that, under existing law, can only be performed by such licensed professionals

Defines general professional partnerships as distinct taxable entities separate from their individual partners
Gross receipts from services rendered in the name of the partnership are taxable to the partnership
Services rendered by partners individually are taxable to the individual partner, not the partnership
Confirms exclusion from VAT of services rendered by licensed doctors and lawyers and their respective professional partnerships organized solely for practicing medicine or law

Registered doctors, lawyers, and their professional partnerships must update their registration status with the BIR by June 20, 2004, converting from VAT to NON-VAT or non-percentage tax taxpayers
Submission of inventory of unused VAT receipts by June 30, 2004, is required; these receipts may be used until July 31, 2004, after stamping with "NON-VAT registered as of [date]"
Professionals who issued VAT invoices before the change must remit VAT due and file monthly VAT returns for the months in which VAT invoices were issued

All prior revenue regulations inconsistent with these provisions are amended, revoked, or repealed accordingly