BIR Form 2307 for Medical Practitioners: Hospital and Clinic Withholding Rules

When a patient is admitted or confined in a hospital or clinic, the hospital — not the patient — is the withholding agent on the attending doctor’s professional fee, even where the hospital does not directly employ that doctor. Under Section 2.57.2(A) of Revenue Regulations (RR) No. 2-98, as amended by RR No. 11-2018, hospitals, clinics, and HMOs must withhold expanded withholding tax on their accredited medical practitioners’ fees and issue BIR Form 2307 to each doctor.

This guide is part of the BIR Form 2307 series. It covers who withholds tax on a doctor’s professional fee, why hospitals cannot let a fee pass directly from patient to doctor, the applicable rate and ATC code, the sworn-declaration exception, and a worked example for a visiting specialist’s fee.

Who is the withholding agent on a medical practitioner’s professional fee? #

The hospital, clinic, or HMO through which a patient’s payment passes is the withholding agent — not the patient, and regardless of whether the doctor is a hospital employee. Most attending physicians in Philippine hospitals are accredited, independent practitioners who use the hospital’s facilities rather than salaried staff, so the ordinary rule (whoever pays the professional withholds) would otherwise leave no withholding agent in place. Section 2.57.2(A) of RR No. 2-98, as amended by RR No. 11-2018, closes that gap by making the hospital, clinic, or HMO responsible for withholding and remitting tax on the professional fees of its accredited medical practitioners — doctors of medicine, dentists, and veterinarians — for patients admitted or confined there, and for HMO members whose fees the HMO pays on the practitioner’s behalf.

This traces back to a rule the BIR first imposed on hospitals and HMOs in 2013 (under the regulation RR No. 11-2018 later renumbered and updated) precisely because doctors’ professional fees were otherwise difficult for the BIR to capture at source: the fee is nominally the patient’s payment, but the patient is not in business and has no withholding obligation, so the rule shifts that duty to the institution that actually processes the payment.

Why can’t the hospital simply let the doctor collect the fee directly? #

Hospitals and clinics are required to fold the professional fee into the patient’s total medical bill rather than allow the doctor to collect it directly, because that is what makes withholding at source possible. If a doctor collected payment straight from the patient, no institution would ever see or control that cash flow, and the withholding duty imposed on hospitals would be unenforceable in practice.

Multiple compliance summaries of this rule describe the requirement in essentially the same terms: hospitals and clinics must not allow their accredited medical practitioners to receive payment of professional fees directly from patients who were admitted and confined there, and must instead include the professional fee in the total medical bill payable to the hospital or clinic itself. The hospital then deducts the withholding tax before releasing the doctor’s net share — the same sequencing used for any other withholding arrangement, just routed through the hospital’s billing system instead of an ordinary invoice.

What withholding rate and ATC code apply to a doctor’s professional fee? #

A medical practitioner is an individual professional payee, so the same 5%/10% rate tiers and sworn-declaration rule that apply to any other individual professional fee under RR No. 11-2018 apply to doctors — there is no separate, lower, or higher rate just because the payee is a physician. This replaced an older flat 10%/15% structure tied to a ₱720,000 threshold that applied to medical practitioners (and to individual professionals generally) before the TRAIN Law reforms.

As with any individual professional payee, the doctor establishes eligibility for the lower 5% rate by submitting an Income Payee’s Sworn Declaration of Gross Receipts/Sales, together with a copy of their BIR Certificate of Registration, to the hospital or clinic — see BIR Sworn Declaration for Lower Withholding for how that declaration works and what happens without one. Without it, the hospital should withhold at 10% rather than assume the lower rate applies.

When does no withholding apply — the sworn declaration exception #

Withholding does not apply at all when no professional fee was actually charged and paid — a charity case, a courtesy waiver for a fellow practitioner, or a fee absorbed by the hospital — but only if that fact is documented, not merely assumed. A hospital cannot simply skip withholding because a doctor says the fee was waived; the regulation requires a specific sworn record.

The withholding tax shall not apply whenever there is proof that no professional fee has in fact been charged by the medical practitioner and paid by his patient, provided this fact is shown in a sworn declaration jointly executed by the medical practitioner and the patient, or the patient’s duly authorized representative in case the patient is a minor or otherwise incapacitated.

— Section 2.57.2(A) of Revenue Regulations No. 2-98, as amended by RR No. 11-2018, as reproduced across BIR compliance references summarizing the hospital-withholding provision.

The joint declaration — executed by both the doctor and the patient (or the patient’s representative) — is kept as part of the hospital’s or clinic’s own records and made available to a duly authorized revenue officer on request. Without it, the BIR’s default assumption is that a professional fee was charged, so the hospital withholds as usual.

Worked example: a visiting specialist’s professional fee #

Suppose Dr. Reyes, a cardiologist accredited at (but not employed by) St. Anne Medical Center, attends to a confined patient and bills a professional fee of ₱20,000 through the hospital’s billing system rather than collecting from the patient directly. Dr. Reyes has an Income Payee’s Sworn Declaration of Gross Receipts/Sales on file with the hospital confirming his gross income for the year has not exceeded ₱3,000,000, so ATC WI010 at 5% applies.

St. Anne Medical Center remits the ₱1,000 withheld through BIR Form 0619-E monthly and BIR Form 1601-EQ quarterly, and issues Dr. Reyes a BIR Form 2307 showing ₱20,000 as the income payment, ATC WI010, and ₱1,000 as tax withheld — due within 20 days after the close of the quarter, or sooner on request. Dr. Reyes then credits that ₱1,000 against his income tax due when filing BIR Form 1701. Had he not submitted a sworn declaration, or had his cumulative gross income for the year already crossed ₱3,000,000, the hospital would instead withhold 10% (ATC WI011) — ₱2,000 on the same ₱20,000 fee, releasing only ₱18,000.

A separate scenario: if St. Anne Medical Center instead pays Dr. Reyes a fixed monthly retainer of ₱30,000 for his role as a hospital-based consultant (not tied to a specific patient bill), the hospital is simply the ordinary payor of that professional fee — the same WI010/WI011 rate and ATC codes apply, but the hospital withholds as a direct income payor rather than under the patient-billing mechanic above. The certificate mechanics and rate are identical either way; what differs is only whose payment the hospital is intercepting — the patient’s or its own.

For a medical group organized as a partnership rather than individual practitioners billing separately, a different mechanic applies at the point the group pays its own partners — see Withholding Tax on GPP Professional Fees for how that withholding shifts to the partnership itself.

Frequently asked questions #

Who withholds tax on a doctor’s professional fee when a patient is confined in a hospital? #

The hospital or clinic where the patient is admitted and confined is the withholding agent, not the patient and not the doctor. Under Section 2.57.2(A) of Revenue Regulations No. 2-98, as amended by RR No. 11-2018, hospitals, clinics, and HMOs have the duty and responsibility to withhold and remit tax on the professional fees of their accredited medical practitioners.

Can a hospital let a doctor collect the professional fee directly from the patient? #

No. Hospitals and clinics must include the accredited doctor’s professional fee in the patient’s total medical bill, payable to the hospital or clinic, rather than letting the doctor collect it directly — this is what lets the hospital withhold before releasing the doctor’s share.

What withholding tax rate applies to a medical practitioner’s professional fee? #

A medical practitioner is withheld at the same individual professional-fee rate as any other individual payee under RR No. 11-2018: 5% (ATC WI010) if the doctor’s gross income for the current year does not exceed ₱3,000,000 and a sworn declaration is on file, or 10% (ATC WI011) if it exceeds ₱3,000,000, the doctor is VAT-registered, or no valid declaration has been submitted.

When is a doctor’s professional fee not subject to withholding tax? #

Withholding does not apply when no professional fee was in fact charged and paid — for example, a charity case or a fee waived for a fellow practitioner or staff member — provided this is documented in a sworn declaration jointly executed by the medical practitioner and the patient (or the patient’s authorized representative if the patient is a minor or otherwise incapacitated), kept on file at the hospital or clinic.

Does a hospital withhold differently for a doctor it pays directly versus a fee it merely collects on the doctor’s behalf? #

No — the withholding mechanics and rate are the same either way. A hospital that pays its own accredited consultant a retainer or honorarium directly is withholding as an ordinary income payor; a hospital that collects a fee from a patient’s bill on behalf of a visiting or affiliated doctor is withholding under the hospital-specific rule in Section 2.57.2(A). Both use ATC WI010/WI011 and both require BIR Form 2307 to be issued to the doctor.

Summary #

Hospitals, clinics, and HMOs — not patients — are the withholding agent on a medical practitioner’s professional fee under Section 2.57.2(A) of RR No. 2-98, as amended by RR No. 11-2018, precisely because most attending doctors are independent, accredited practitioners rather than hospital employees. The rate structure is the same 5%/10% individual-payee tiers (ATC WI010/WI011) used elsewhere in this series, hinging on the same ₱3,000,000 sworn-declaration threshold — with withholding excused only where a joint sworn declaration proves no fee was actually charged. Whether the hospital is collecting a fee on a doctor’s behalf from a patient’s bill or paying its own consultant directly, the certificate obligation is the same: issue BIR Form 2307 showing the correct ATC and amount withheld. For the general professional-fee rules this scenario builds on, see BIR Form 2307 for Professional Fees, and for what the certificate itself covers, see What Is BIR Form 2307.