Hospital Does Not Fall Within the Purview of the Term "Independent Contractor" under Sec. 170 of the Tax Code

October 10, 1986 BIR RULING NO. 208-86 170 000-00 208-86 Gentlemen : In reply to your letter dated October 2, 1986, please be informed that a hospital, the primary function of which is that of being a place of confinement where sick and injured persons receive medical care as patients requiring bed, board and other medical services does not fall within the purview of the term "independent contractor" under Section 170 of the Tax Code, as amended. (BIR Ruling dated June 20, 1973). Hospital services do not consist essentially of the same of all kinds of services for a fee, but are merely ancillary, supplementary and incidental to the medical care and treatment of a patient. Accordingly, since your Dermclinic specializes in medical consultation, care and treatment of the diseases of the skin of a patient which are ancillary, supplementary and incidental to the function of a hospital, the same is not subject to the 4% contractor's tax under Section 170 of the Tax Code, as amended. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner of Internal Revenue