BIR Ruling

June 20, 1973 Dr. Eliodoro D. Congco President, Philippine Hospital Association 1525 V. Concepcion Street Sta. Cruz, Manila S i r : In reply to your letter, dated May 16, 1973, requesting for further reconsideration of our ruling dated January 31, 1973, wherein it was held tat hospitals fall within the purview of the term "independent contractor" kindly be informed that after a careful review of the said ruling and considering the primary function of a hospital as a place of confinement where sick and injured persons receive medical care as patients requiring bed, board and other medical services, we have advisedly considered that hospitals do not fall within the purview of the term "other independent contractors," which has been defined to "include persons (juridical or natural) . . . whose activity consists essentially of the sale of all kinds of services for a fee regardless of whether or not the performance of the service calls for the exercise or use of the physical or mental faculties of such contractors or their employees" (emphasis supplied). Hospital services do not " consists essentially of the sale of all kinds of services for a fee," but are merely ancilliary, supplementary and incidental to the medical care and treatment of a patient. In view of the above, our rulings on the name subject, dated January 31, 1973, and April 17, 1973, respectively, are hereby reversed and revoked. aisadc Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue