Summary
RMC No. 06-2009 circularizes the revocation of BIR Rulings similar to BIR Ruling No. DA (VAT-054) 529-2008. It also clarifies that HMOs are subject to VAT.
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Key points
- Rulings revoked. BIR Ruling Nos. DA (VAT-019) 121 dated August 8, 2008 (Health Maintenance, Inc.), DA (C-032) 122-2008 dated August 8, 2008 (Asalus Corporation), and DA (VAT-026) 375-2008 dated October 31, 2008 (Maxicare Health Corporation) are revoked.
- HMOs remain subject to VAT. BIR Ruling No. 018-98 is still controlling. HMOs are subject to VAT, and the VAT base is the membership fees received from members, undiminished by amounts paid or payable to owners or operators of hospitals, clinics, and medical and dental practitioners.
- Gross receipts of HMOs. Under Revenue Regulations No. 16-2005, an HMO’s gross receipts are the total service fee actually or constructively received for services performed or to be performed for another person, excluding the VAT. The service fee is presumed to be the total enrollment amount received from members plus other charges.
- Other rulings. All other existing rulings inconsistent with this circular are also revoked.
Who is affected
- Health Maintenance Organizations (HMOs)
Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.
Copies of BIR issuances are hosted here for reference. For the official version, check bir.gov.ph. Summaries by Tax Resources PH are not a substitute for the full text or professional advice.