A Hospital is Not an Independent Contractor

September 7, 1987 BIR RULING NO. 265-87 170 208-86 265-87 Gentlemen : This refers to your letter dated August 4, 1987 requesting confirmation of your opinion that a hospital does not fall within the purview of the term "independent contractor" and hence, not subject to the 4% contractor's tax under Section 170 of the Tax Code, as amended. You have represented that your primary function is to render medical care to sick and injured patients requiring bed, board and other medical services such as laboratory and X-ray services; and that your services do not consist essentially of the sale of all kinds of services for a fee, but merely ancillary, supplementary and incidental to the medical care and treatment of your patients. In reply, please be informed that the opinion is confirmed. This Office has ruled 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 under 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 of all kinds of services for a fee but merely ancillary, supplementary and incidental to the medical care and treatment of patients. Very truly yours, (SGD.) EUFRACIO D. SANTOS Deputy Commissioner