BIR Ruling

July 1, 1970 Mr. Domingo C. Cadiz Manager, Legal Department Government Service Insurance System Manila S i r : This refers to your letter dated January 12, 1970 requesting information as to whether lawyers and other professionals like doctors, nurses, pharmacists, engineers, architects, and others who are employees of the Government or any state corporation like the GSIS are required to pay professional taxes considering that they are not in the private practice of their respective professions but in the service of the Government. In reply, I have the honor to inform you that professionals employed in the government service or in government owned or controlled corporations like the GSIS who use or exercise the knowledge of their profession in their employment are subject to the occupation tax imposed in Section 182(B) of the Tax Code, as amended by Republic Act No. 6110. The fact that such professionals do not engage in the private practice of their professions because they are in the service of the Government does not exempt them from the payment of the tax. The application of the knowledge of their profession in the exercise of their duties and functions is considered practice of their profession, although such practice is limited to their employment. It should be noted that the previous provision of Section 182(C)(7) of the Tax Code which exempted from the occupation tax persons employed in any branch of the service of the Government of the Philippines whose entire professional services are devoted exclusively thereto or are applied under its direction has been eliminated by Republic Act No. 6110. Such elimination is sufficiently explicit and indicative of legislative intent to tax professionals in the employ of the government. (BIR Ruling No. 70-008). cd As to the amount of tax and the professionals subject thereto, Section 182(B) of the Tax Code, among others, provides as follows: "(B) On occupation . Annual taxes on occupation shall be collected as follows: "(1) Seventy-five pesos: "(a) Lawyers, medical practitioners, architects, interior decorators, certified public accountant, civil, electrical, chemical, mechanical, mining or sanitary engineers, insurance agents and sub-agents, custom brokers, marine surveyors, actuaries, registered master plumbers, veterinarians, dental surgeons, opticians, commercial aviators, professional appraisers or connoisseurs of tobacco and other domestic or foreign products, licensed ship masters and marine chief engineers; "(b) Mechanical plant engineers, junior mechanical engineers and certified plant mechanics, unless he or she is a professional mechanical engineer and has paid the corresponding fixed tax for mechanical engineers. "The term 'mechanical engineers', as used herein, means professional mechanical engineers as defined in Commonwealth Act Numbered Two hundred and ninety-four. "(2) Fifty pesos: "(a) Land surveyors, chief mates, marine second engineer, pharmacists, registered nurses, chiropodists, tattooers, masseurs, pelotaris, jockeys, professional actors or actresses, stage performers, hostesses, statisticians, dietitians, commercial steward and stewardesses, flight attendants, insurance adjusters and embalmers; "(b) Midwives, unless he or she is a registered nurse and has paid the corresponding fixed tax for nurses; "(c) Chemist, unless he or she is a registered chemical engineer and has paid the corresponding fixed tax for chemical engineers; "(d) Associate electrical engineers, unless he or she is a professional electrical engineer and has paid the corresponding fixed tax for electrical engineers; "(e) Marine officer, unless he is a marine engineer or second engineer and has paid the corresponding fixed tax for marine engineers or second engineers." As to the time of payment of the tax, Sec. 180 of the Tax Code, as amended provides that all fixed taxes shall be payable, at the option of the taxpayer, annually, on or before the twentieth day of January or semi-annually, on or before the twentieth of January and July. aisa dc Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue