Invasive Cosmetic Surgery Tax Train Law

Rosben Orbeso Murillo, CPA
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The appearance of a person is very important to us either at work, school or even social media. To change their appearance many people wanted to change their look according to their likes and this transition is called the surgery. You might be wondering, is it subject to tax under the train tax law in the Philippines? Let’s start the definition of cosmetic surgery and what type of surgery is taxable under train law.

Invasive Cosmetic Surgery Train Law

If you’re planning to establish a cosmetic surgery in the Philippines, you must be interested in this article. This article will help you to understand the prescribed rules and guideline regarding the implementation on the imposition of Excise tax treatment on invasive cosmetic procedures under the Section 46 of Republic Act No. 10963, otherwise known as the Tax Reform for Acceleration and Inclusion (TRAIN) Law.

Do you know how invasive cosmetic procedures are being taxed in the Philippines under the TRAIN law?

What is Invasive Cosmetic Surgery?

According to the 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 a surgery inside the body through the skin or through an anatomical opening or body cavity with the least damage possible in the structures. These surgeries include but are not limited to the following procedures:


  • Liposuction
  • Laser Liposuction
  • Breast Augmentation
  • Breast Reduction Mammoplasty
  • Breast lift/Mastopexy
  • Buccal Fat Reduction
  • Buttocks Augmentation
  • Chin Augmentation
  • Facelift/Necklift
  • Featherlift – Aptos – Thread Lift
  • Hair Restoration/Transplantation
  • Blepharoplasty or Eyelid Surgery
  • Vulvovaginal Surgery
  • Abdominoplasty or Tummy Tuck
  • Stem Cell Auto Grafting
  • Rhinoplasty/Alar Trimming
  • Otoplasty
  • 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 its equivalent representing the contract price or agreed amount including deposits applied as initial payment to perform 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 directed solely on improving or changing the appearance of the patient.


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 who 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 file an application for a Permit to Operate with the Excise LT Regulatory Division (ELTRD). The applicant should accomplish the following:

  1. Request Letter
  2. Certificate of Securities and Exchange Commission, together with the Articles of Incorporation and By-laws for corporation and certificate of Registration with the Office of the Domestic Trade and Industry for the individual.
  3. Mayor’s Permit
  4. BIR Certificate of Registration
  5. The latest copy of Income Tax Return
  6. Complete address of the location
  7. Price list of Invasive/Non-invasive Medical Procedures


Conclusion

Let’s wrap up this article. First, 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.  Second, the person responsible to pay the excise tax is the person performing the cosmetic surgery. Third, in filing the excise tax you need to 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. Lastly, if you want to start your clinic you must submit the above documents.

If we’re missing something, please let us know by dropping your comment below. We’ll appreciate your thoughts. If you find worth it to share with your friends, just click share. We’ll appreciate also your thoughts on this article by giving rates.

-ONLINE FREELANCE Studied at Saint Paul School of Professional Studies Work Experiences: Taught both Accounting and Taxation for more than six (6) years. Former Tax CPA reviewer at SPSBL CPA review center.

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