BIR: UPDATES

REVENUE MEMORANDUM CIRCULAR NO. 41-2019

 Circularizing the Availability of the Newly Revised BIR Form No. 1702-MX January 2018 (ENCS)

 Shall be used by the non-individuals with mixed income subject to multiple income tax rates or with income subject to special or
preferential rate in filing the annual income tax return and paying the income tax due starting the year 2018 which is due on or before
April 15,2019.

REVENUE REGULATION NO. 2 - 2019: INVASIVE COSMETIC PROCEDURE

 Rules and Regulations Implementing the Imposition of Excise Tax on Non-essential Services Introduced by Republic Act No. 10963 “Tax
Reform for Acceleration and Inclusion (TRAIN) Law”

 Pursuant to Section 44 of the NIRC and R.A. No. 10963, hereby promulgated to implement Section 105-A as introduced by Section 46 of
the TRAIN Law.

 Rate and Base of Excise Tax

 Shall be levied, assessed and collected, an excise tax equivalent to 5% based in gross receipts derived from the performance
of services, net of excise tax and VAT on invasive cosmetic procedures, surgeries and body enhancement directly solely
toward improving, altering, or enhancing patient’s appearance and do not meaningfully promote the proper function of the
body or prevent or treat illness or disease.

 Gross Receipts is the total money or its equivalent representing the contract price or service fee, including deposits applied as
payments for services rendered and advance payment actually or constructively received for services performed or to be
performed for another person, but excluding 5% excise tax and VAT.

 VAT base, the gross receipts shall be inclusive of the 5% excise tax.

 Constructive Receipt occurs when the money consideration or its equivalent is placed under the control of a person who
rendered the service without restrictions by the customer.

 This shall cover exchange deal arrangements

 The Excise Tax Imposed shall not apply to procedures:

i. Necessary to ameliorate a deformity arising from or directly related to a congenital or development defect or abnormality

ii. A personal injury resulting from accident or trauma, or disfiguring disease, tumor, virus or infection.

iii. Cases and treatments covered by the National Health Insurance Program

iv. Non-invasive Cosmetic Procedures

 Persons Liable to File a Return

 Any person, whether natural or juridical, performing invasive cosmetic procedures, surgeries, and body enhancements

 Shall file a return on its monthly gross receipts using BIR form No. 2200-C together with Monthly Summary of
Cosmetic Procedures Performed as an attachment to the said form.

 The tax return shall be filed and the excise tax due, if any, shall be paid at the same time within 10 days following
the close of the month.

 The return shall be filed with and the excise tax remitted to any Authorized Agent Bank (AAB)

 For taxpayer located outside NCR and there are no duly accredited AAB within the municipality or city, it shall be
filed and payments be made to the Collection Agent where such taxpayer is registered.

 In cases where no invasive cosmetic procedures were performed during the return period, hence no excise tax due;

 BIR form 2200-C shall still be filed with the Excise Large Taxpayers Field Operation Division (ELTFOD) for Large
Taxpayers or the concerned Revenue District Office for the taxpayers in NCR or Excise Tax Area (EXTA) in regional
officers for taxpayers outside NCR.

 Every person subject to excise tax herein shall issue an Official receipt for services performed whether invasive/non-invasive with the
following information:

i. Total amount which the patient pays or is obliged to pay for the service provider including the excise tax and VAT; provided
that:

a) The amount of VAT shall be shown as a separate item in the OR

b) Discounts given shall be indicated in the OR, otherwise, same shall not be allowed as deduction from gross receipts

c) For non-invasive and/or invasive but considered exempt from excise tax: the term EXEMPT shall be shown on the OR
 BIR: UPDATES

d) If the services performed involves both invasive (whether excisable or exempt) and non-invasive procedures, a separate
OR may be used for the excisable and non-excisable services rendered.

 All persons subject to excise tax under Section 150-A of the Tax Code shall maintain a subsidiary ledger on which every service
rendered/performed on any given day is recorded. It shall contain the following information:

a) Name of the Patient

b) Taxpayer’s Identification Number (TIN)

c) Official Receipt No. and date of issue

d) Invasive cosmetic procedure performed (indicate whether excisable or not)

 If not excisable, provide Remarks column to explain why non-excisable

e) Non-invasive procedure performed

f) Gross Receipts for non-invasive (net of VAT)

g) Gross Receipts for invasive procedures

 Excisable (Net of VAT and Excise)

 Excisable (VAT exempt)

 Non-excisable (Net of VAT)

h) 5% Excise tax due

i) 12% VAT due

j) Total amount collected from client

 Every person subject to excise tax under Section 150-A of the NIRC, shall register as Excise Taxpayer engaged in the performance of
Invasive Cosmetic Procedures with the Excise LT Regulatory Division (ELTRD) for Large Taxpayers or with Revenue District Office (RDO) for
Non-large Taxpayers.

 The application for registration shall be filed on or before March 31,2019

 PENALTIES

 Shall be subject to the corresponding penalties under Sections 250,251, and 255 of NIRC, as amended, and Revenue
Memorandum Order No. 7-2015.

 Pursuant to Section 254 of the NIRC

 Any person who willfully attempts in any manner to evade or defeat any tax imposed under this Regulation shall,
in addition to other penalties provided by law, be punished with a fine of not less than P500,000 but not more
than P100,000, and imprisonment of not less than 6years but not more than 10 years.

 If the offender is not a citizen of the Philippines, he shall be deported in accordance with immigration law, rules
and regulations.

 Signed by:

 Carlos G. Dominguez - Secretary of Finance

 Recommending Approval of Caesar R. Dulay - Commissioner of Internal Revenue