A person’s appearance is significant to us either at work, school, or even on social media. To change their appearance, many people wanted to change their look according to what they need. This operation is under cosmetic surgery tax under train law. What is the effect of train law on cosmetic surgery?
Invasive cosmetic surgery tax under train law
If you plan to establish a cosmetic surgery in the Philippines, you must be interested in this article. This article will help you understand the prescribed rules and guidelines regarding implementing the imposition of Excise tax treatment on invasive cosmetic procedures under Section 46 of Republic Act No. 10963, otherwise known as the Tax Reform for Acceleration and Inclusion (TRAIN) Law.
What is Invasive Cosmetic Surgery?
According to plasticsurgery.org, Cosmetic plastic surgery includes surgical and nonsurgical procedures that enhance and reshape structures of the body to improve appearance and confidence. Invasive cosmetic procedures are referred to as surgery inside the body through the skin or an anatomical opening or body cavity with minor damage possible in the structures. These surgeries include but are not limited to the following procedures:
- Laser Liposuction
- Breast Augmentation
- Breast Reduction Mammoplasty
- Breast lift/Mastopexy
- Buccal Fat Reduction
- Buttocks Augmentation
- Chin Augmentation
- Featherlift – Aptos – Thread Lift
- Hair Restoration/Transplantation
- Blepharoplasty or Eyelid Surgery
- Vulvovaginal Surgery
- Abdominoplasty or Tummy Tuck
- Stem Cell Auto Grafting
- Rhinoplasty/Alar Trimming
- Cobra Coglift
What is the Tax Rate and Tax Base for Invasive Cosmetic Surgery?
What is the Cosmetic surgery tax under train law? Well, according to this update, Five percent (5%) is taxed based on the gross receipts, net of excise tax, and value-added tax on every service performed on invasive cosmetic procedures, surgeries, and body enhancement directed solely towards improving, or changing the appearance of the patient.
Gross receipts are the total amount of money or equivalent representing the contract price or agreed amount, including deposits applied as an initial payment for performing the services. This gross receipt excludes the five percent (5%) excise tax and value-added tax (VAT).
Who is liable to pay the excise tax of 5%?
Any person who is performing invasive medical procedures or body enhancement is directed solely on improving or changing the patient’s appearance.
How to File/Remit the Excise Tax?
Excise tax on non-essential service, which involves the performance of medical services and not goods, should collect five percent (5%) excise tax from the patient or clients and should be remitted to the BIR based on the gross excise tax, net of a VAT.
This practice is the reversal of payment of excise tax. The reversal means that the obligation to pay taxes is transferred to the recipient of the services, not the companies.
In the filing, every person liable to withhold the excise tax shall file a monthly return of its monthly gross receipts within ten (10) days following the close of the month using BIR Form NO. 1620-XC (Monthly Remittance Return of Final Withholding of Excise Tax on Cosmetic Procedures), along with the Summary of Invasive Cosmetic Procedures Performed via email.
How to Apply Application to Operate?
Every person or entity who wants to engage in invasive cosmetic procedures should apply for a Permit to Operate with the Excise LT Regulatory Division (ELTRD). The applicant should accomplish the following:
- Request Letter
- Certificate of Securities and Exchange Commission, together with the Articles of Incorporation and By-laws for corporation and certificate of Registration with the Domestic Trade and Industry Office for the individual.
- Mayor’s Permit
- BIR Certificate of Registration
- The latest copy of the Income Tax Return
- Complete address of the location
- Price list of Invasive/Non-invasive Medical Procedures
Let’s wrap up this article. First, five percent (5%) Cosmetic surgery tax under train law is imposed based on the gross receipts, net of excise tax, and value-added tax on every service performed on invasive cosmetic procedures, surgeries, and body enhancement directed solely towards improving or changing the appearance of the patient. Second, the person responsible for paying the excise tax is the person performing cosmetic surgery.
Third, in filing the excise tax, you need to file a monthly gross receipts monthly return within ten (10) days following the close of the month using BIR Form NO. 1620-XC (Monthly Remittance Return of Final Withholding of Excise Tax on Cosmetic Procedures), along with the Summary of Invasive Cosmetic Procedures Performed via email. Lastly, if you want to start your clinic, you must submit the above documents.