Exemption from Occupation Tax of All Professional-Employees Devoting Their Professional Services to their Employment

May 11, 1966 BIR RULING NO. 015-66 1st Indorsement Returned to the Chief, Narcotics Drug Division. The last paragraph of section 182 (B) of the Tax Code, as amended by R. A. 4574, reading ". . . AND, PROVIDED, FINALLY, That any such professionals employed and performing duties in such professional capacities but without the permission to practice their profession during or after office hours to private or personal clienteles are hereby exempted from the payment of such occupational taxes." means that professionals employed either by the Government or private sector are exempt from the occupation tax if they are not permitted by their employers to engage in private practice either during or after office hours. Even if they are permitted by their employers to engage in private practice, they do not thereby become liable to the occupation tax if in fact they do not engage in such practice. The permission to engage in private practice should be coupled with the actual act of professional practice in order to render the professional-employee liable to the tax for it is the essence of the occupation tax to tax the professional act and not the mere fact of being a professional. It is the opinion of this Office that the Law exempts all professional-employees who devote their professional services exclusively to their employment. (SGD.) MISAEL P. VERA Commissioner of Internal Revenue (SGD.) PRISCILLA R. GONZALES Asst. Rev. Operations Head (Legal)