BIR Form 2307 for Diagnostic Laboratories and Imaging Centers: Facility Fee vs Professional Fee

An independent diagnostic laboratory or imaging center that bills a hospital, HMO, or corporate client as a business entity is generally not a named professional under Revenue Regulations (RR) No. 2-98 — its fee is withheld at the flat 2% general services rate, not the 5%–15% bracket reserved for individually licensed doctors, lawyers, and other enumerated professionals. The payor still withholds and issues BIR Form 2307, just under a different Alphanumeric Tax Code (ATC) and rate than a doctor’s own professional fee.

This guide is part of the BIR Form 2307 series. It covers why a diagnostic lab or imaging center falls outside the named-professional bracket, how its facility fee differs from a pathologist’s or radiologist’s own reading fee, the applicable ATC codes, and a worked example for an HMO paying an independent lab directly.

Is a diagnostic lab or imaging center a named professional under RR No. 2-98? #

No — Section 2.57.2(A) of RR No. 2-98, as amended by RR No. 11-2018, names specific PRC- and Supreme Court-licensed individuals (doctors, lawyers, CPAs, engineers, and similar professionals), and an independent diagnostic laboratory or imaging center organized as a business entity does not appear on that list. The named-professional bracket is built around an individual practitioner billing under their own name and license, not a company billing for institutional testing capacity. See BIR Form 2307 for Professional Fees for the full rate structure this bracket sets for individually named professionals.

A licensed medical technologist or radiologic technologist may hold a PRC license, but that license attaches to the individual professional performing or supervising the test — not automatically to the laboratory or imaging center as a corporate or partnership entity that owns the equipment and bills the client. This is the same individual-vs-entity reasoning this series applies to physical therapists and rehabilitation clinics: a licensing law regulates who may practice, but it does not by itself place every business built around that profession inside the 5%/10% enumeration.

Facility fee vs professional fee: why the lab’s own charge is different from a doctor’s #

A diagnostic lab or imaging center’s institutional charge — for the equipment, reagents, film, and staff time used to run a test — is a facility or business-service fee, distinct from the professional fee a doctor earns for personally examining or treating a patient. This guide’s companion post, BIR Form 2307 for Medical Practitioners: Hospital and Clinic Withholding Rules, covers the hospital-withholding rule for an attending doctor’s own professional fee under Section 2.57.2(A) — that rule concerns the individual physician, not the hospital’s or lab’s own institutional billing.

The general rule for who must withhold at all is unchanged from the rest of this series:

“(A) In general, any juridical person, whether or not engaged in trade or business; (B) An individual, with respect to payments made in connection with his trade or business…”

— RR No. 2-98, Section 2.57.3(A)–(B)

A hospital, HMO, or corporate client paying a diagnostic lab or imaging center for its own account is a withholding agent under this test — the only question this post addresses is which rate and ATC code apply once withholding is triggered.

Who withholds when a lab or imaging center bills for its services? #

Any business paying a diagnostic laboratory or imaging center in the course of its own trade or business is a withholding agent, whether the payment flows through a hospital, an HMO, or a corporate wellness account — a patient paying a walk-in lab out of pocket for a personal test is not. Common arrangements include:

• A hospital that refers a specialized test to an outside, unaffiliated laboratory (e.g., a specific hormone panel or histopathology reading the hospital’s own lab does not run in-house) and pays that lab directly.
• An HMO that pays an accredited diagnostic center directly for tests performed on its members, rather than routing the payment through a hospital.
• A corporate client paying for employees’ annual physical exam packages, where the imaging center or lab bills the company rather than each employee individually.
• A clinic or medical group that outsources its imaging (X-ray, ultrasound, CT, MRI) to a separate imaging center and pays that center’s facility charge.

A private individual who walks into a diagnostic center and pays cash for their own blood test or chest X-ray is not a withholding agent — the same personal-payment exception this series applies elsewhere, since RR No. 2-98 requires the payor to be a juridical person or an individual paying in connection with trade or business.

What ATC code applies to a lab or imaging center’s fee? #

Both ATC codes sit in the same general services bracket this series documents for other non-enumerated service providers — see BIR Form 2307 for Physical Therapists and Rehabilitation Clinics for the closest parallel structure. Unlike the named-professional bracket, the payee’s individual-vs-corporate status does not change the rate here — only the ATC code changes, from WC160 to WI160.

Worked example: an HMO paying an independent diagnostics chain #

HealthFirst HMO refers a group of members to PrecisionScan Diagnostics, Inc., an independent, HMO-accredited diagnostic chain, for a monthly aggregate billing of ₱8,500 covering blood panels and ultrasound imaging. PrecisionScan is organized as a corporation, so ATC WC160 at 2% applies to the facility charge.

HealthFirst HMO remits the ₱170 withheld through BIR Form 0619-E monthly and BIR Form 1601-EQ quarterly, lists PrecisionScan on its Quarterly Alphalist of Payees, and issues a BIR Form 2307 showing ₱8,500 as the income payment, ATC WC160, and ₱170 as tax withheld. PrecisionScan then credits that ₱170 against its income tax due.

Contrast this with the reading fee scenario: if one of the referred scans requires a radiologist to personally interpret the imaging and HealthFirst pays that radiologist a separate professional reading fee of ₱3,000, the radiologist — an individually named medical practitioner — is withheld under ATC WI010 at 5% (assuming a valid sworn declaration is on file), or WI011 at 10% otherwise, following the same individual professional-fee rules covered in BIR Form 2307 for Medical Practitioners — not the 2% rate applied to PrecisionScan’s own facility charge, even though both payments relate to the same batch of tests.

A separate variation: if HealthFirst instead pays an individually licensed radiologic technologist who runs a solo mobile ultrasound service — a sole proprietor rather than a corporation — the same 2% rate applies, but under ATC WI160 instead of WC160. On the identical ₱8,500 billing, the withheld amount is still ₱170; only the ATC code changes to reflect the individual payee.

Frequently asked questions #

Does an independent diagnostic laboratory or imaging center get BIR Form 2307? #

Yes. A hospital that refers tests to an outside lab, an HMO paying a diagnostic center directly for member services, or a corporate client paying for annual physical exams is a withholding agent that must withhold expanded withholding tax on the lab or imaging center’s billing and issue it BIR Form 2307.

What withholding tax rate applies to a diagnostic lab or imaging center’s billing? #

Generally 2%, not the 5%–15% named-professional rate. An independent diagnostic laboratory or imaging center organized as a business entity is not individually enumerated among the licensed professionals covered by Section 2.57.2(A) of RR No. 2-98, as amended by RR No. 11-2018, so its institutional or facility fee falls under the flat 2% general business-services bracket instead.

Is a radiologist’s or pathologist’s reading fee withheld differently from the lab’s own fee? #

Yes. A radiologist or pathologist who personally interprets a scan or specimen and is paid a separate professional reading fee is an individually named medical practitioner under Section 2.57.2(A), subject to the 5%/10% individual professional-fee bracket. The diagnostic facility’s own charge for running the test — its equipment, reagents, and staff time — is a separate, generally 2% facility fee, even when both amounts appear on the same patient bill.

Does a hospital that refers tests to an outside lab have to withhold tax? #

Yes, if the hospital is the one paying the outside lab for the referred tests. A hospital, HMO, or corporate client that pays an independent diagnostic laboratory or imaging center in the course of its own business is a withholding agent under RR No. 2-98, Section 2.57.3(A)-(B), regardless of whether the lab is itself a hospital-based department or a separate, unaffiliated company.

What ATC code applies to a diagnostic laboratory or imaging center’s fee? #

ATC WC160 applies at 2% when the payee is a diagnostic laboratory or imaging center organized as a corporation or partnership. ATC WI160 applies at the same 2% rate when the payee is an individually licensed medical technologist or radiologic technologist operating their own diagnostic service as a sole proprietor, rather than as an employee.

Summary #

An independent diagnostic laboratory or imaging center billing a hospital, HMO, or corporate client as a business entity sits outside the 5%–15% named-professional bracket that RR No. 2-98, Section 2.57.2(A), as amended by RR No. 11-2018, reserves for individually licensed doctors, lawyers, and similar professionals — its facility fee is withheld instead at the flat 2% general business-services rate, under ATC WC160 (corporation/partnership) or WI160 (individual sole proprietor). This is distinct from a radiologist’s or pathologist’s own professional reading fee, which stays inside the 5%/10% individual bracket the same way it does for any other accredited physician under BIR Form 2307 for Medical Practitioners: Hospital and Clinic Withholding Rules. For the general professional-fee rate structure this scenario builds on, see BIR Form 2307 for Professional Fees.