Basis for Exemption from the Occupation Tax of Physicians Employed in Government Hospitals

February 20, 1959 BIR RULING NO. 100-59 The President Phil. Medical Women's Association Rebecca Parrish Memorial Clinic P. Paredes, Manila M a d a m : Reference is made to your letter dated December 12, 1958, the resolution of that Association and the copy of the minutes of the meeting of the Council of Health Agencies' Committee, inclosed therewith. cdt In answer thereto, I have the honor to inform you that the basis for exemption from the occupation tax of physicians employed in government hospitals is not a mere regulation but Section 182(c)(7) of the National Internal Revenue Code. There can be no discrimination by reason of the exemption against physicians employed in private hospitals, because in the same way that the former are exempt because a government hospital is not conducted for private gain, the latter are also exempt if the hospital to which they devote their entire professional services are not conducted for private gain. It may be stated, in this connection, that in determining whether or not a professional is engaged in the active practice of his profession, the question of honorarium is immaterial. It is enough that his activities as such professional constitute the practice of his profession. In view thereof, this Office is of the opinion that the position of that Association as embodied in the resolution is not well taken. Accordingly, it is regretted that this Office cannot favorably recommend said resolution for congressional legislation. prcd Very truly yours, (SGD.) JOSE ARAAS Commissioner of Internal Revenue