Transcript Slide 1

Reiteration of the Applicable Penalties for
Employers Who Fail to Withhold, Remit, Do the
Year-End Adjustment and Refund Employees of
the Excess Withholding Taxes on Compensation

Emphasize the Employers to:
1. Withhold
2. Remit
3. Do the Year-End Adjustment
4. Refund employees of the excess
of the Withholding Taxes on Compensation
Sec. 80(A); Sec. 79(H); Sec. 24(A)
Sec. 80(A) NIRC, as amended
Employer
Withhold & Remit
Correct amount of tax
BIR

Sec. 79(H)
* On or before year end but prior to payment
of the compensation for the last payroll period,
the employer shall determine the tax due from
each employee on taxable compensation income
for the entire taxable year - Sec. 24(A).
*The difference of the tax due and tax withheld
will either be withheld on Dec. or refunded to the
employee not later Jan. 25, following year.
For Monthly Remittance:
COMPENSATION ==> BIR Form 1601C
For Annual Information Return:
COMPENSATION &
FINAL
===> BIR Form 1604CF
For Certificate of Taxes Withheld:
COMPENSATION ===> BIR Form 2316
Due Dates:
January to November – On or before the 10th
day of the following the month, whether
W/A is LT or
Non-LT
(RR 6-01)
December - On or before Jan. 15 of the
following year, whether W/A is LT or
Non-LT (RR 6-01)
Annually - On or before Jan. 31 of the
following year (RR 3-02)
Attachments Required:
1.
2.
3.
4.
5.
Alphalist of Employees as of Dec. 31 with No Previous
Employer within the Year;
Alphalist of Employees as of Dec. 31 with Previous
Employer(s) within the year;
Alphalist of Employees Terminated before Dec. 31;
Alphalist of Employees Whose Compensation Income
are Exempt from Withholding Tax but Subject to
Withholding Tax
Alphalist of Employees other than Rank & File Who
Were Given Fringe Benefits During the Year
*
Optional for taxable year 2001
*
Mandatory effective taxable year 2002
START
Preparation of BIR
Form No. 1604 CF
Before Jan. 31
Employer files w/
BIR the duly accomplished
BIR FORM 1604CF
Subject to WTC?
On or before Jan 31
n
Employer shall issue
2306to the payee (FWT)
On or before Jan. 31
y
Entitled to substituted filing?
n
Employer shall issue
2316 to employee
y
Employer/employee to execute sworn
joint certification. Employer to furnish
employee copy of 2316/cert. to employee.
Employer to retain copy of joint cert.
On or before Jan. 31
On or before April 15
Employee files ITR
together with 2316 &
other pertinent docs
An illustrative example on the year-end
adjustment is shown under Sec. 2.79(B)(5)(b) of
Revenue Regulations (RR) No. 2-98, as amended.
1. Non-withholding of tax
- Employer fails to withhold the tax
2. Underwithholding
- Employer fails to correctly withhold the tax
3. Non-remittance
-Employer fails to remit total amount withhled
4. Underremittance
-Employer’s remittance is less than total amount
withheld
5. Late remittance
-Employer remits correct amount withheld
beyond the due date
6. Failure to refund excess taxes withheld
◦ -Employer ails to refund excess taxes withheld to
its employees
Penalties for Non-Compliance:
1. Additions to the tax:
a. Sec. 248 – 25% of the amount due (failure)
50% of the amount due (fraud)
b. Sec. 249 – 20% interest per annum
c. Sec. 251 – other penalties + total tax not withheld
d. Sec. 252 - penalties + refundable amount
2. Criminal Liabilities: (upon Conviction)
a. Sec. 255 – other penalties + P10,000 +
imprisonment of 1 yr to 10 yrs
b. Sec. 256 – (Corp.) penalties + fine of P50,000 to
P100,000
c. Sec. 272 – (Public Officers) penalties + fine of P5000
to P50,000 or imprisonment of 6 mos.
to 2 yrs, or both
d. Sec. 275 – (no specific penalty) fine of <P1,000 or
imprisonment of < 6 mos. Or both
In certain instances as provided under
Revenue Memorandum Order No. 19-2007, a
compromise penalty in lieu of criminal liability
may be imposed and collected.