The National Taxation Bureau of Taipei, Ministry of Finance states that, in a recent investigation, a practicing physician of a private medical institution were found failing to make honest reporting of patients’ medical expenses. Instead, the practicing physician only declared revenue which covered in the National Health Insurance (NHI)、copayments and registration fees. As for other self-bearing expenses that are not covered in the NHI (ex. dental implant and making removable denture etc.) and are over tens of millions each year, the practicing physician failed to declare them as “Income from Professional Practice” of the gross consolidated Income. The Bureau therefore levied an amount of additional income tax and imposed a fine thereon bylaw.
The Bureau explained that it received a report from a citizen, stating that a private clinic engaging in cosmetic surgery and dental implant and charges a high price without proactively issuing a receipt. As the citizen believes that the practicing physician of private clinic as mentioned above is unlikely to make honest reporting of revenue from patients’ self-bearing expenses. Based on the evidence provided by the citizen, the Bureau then carried out an investigation on the clinic and it was confirmed that the practicing physician failed to declare aforementioned revenue under the category of “Income from Professional Practice”, resulting in the under-reporting of the gross amount of consolidated Income.
The Bureau further stated that the investigated clinic (“Dental Clinic A”) charged patients for dental implant and making removable denture between 2017 and 2019. Each year, the practicing physician of Dental Clinic A earned about NTD 8 million to NTD 10 million, but he/she only declared an annual revenue of NTD 1 million to NTD 2 million. As Dental Clinic A failed to prepare account records and keep vouchers according to the law, the Bureau therefore calculated Dental Clinic A’s income by deducting necessary expenses (40%) from its underreported revenue in accordance with expense standards promulgated by Ministry of Finance, then use this amount to calculate the practicing physician’s gross consolidated income and tax payable. In accordance with Article 110 of Income Tax Act, the taxpayer （practicing physician）shall be levied an amount of additional income tax and be imposed with a fine of no more than twice the amount of tax evaded.
The Bureau reminds that practicing physicians of private medical institutions shall make honest reporting of their revenue for professional practice and pay tax in accordance with the laws. In case of finding any omission or under-reporting of income during self-examination, as long as it is neither a case brought about by an informant, nor a case under investigation by an investigator appointed by the tax collection authorities or the Ministry of Finance, the taxpayer may voluntarily file a supplementary tax declaration with the tax collection authorities and makes supplementary payment covering the undeclared tax amount and interest thereof, and be remitted from punishment for tax evasion in accordance with Article 48-1 of Tax Collection Act.
(Contact Person: Head of the Third Examination Division Sun, Tel: 2311-3711 Ext.1760)