Transcript Slide 1

1
WITHHOLDING TAX
AT SOURCE
(Revenue Regulations No. 2-98, as amended)
Presented by:
SUSAN D. TUSOY, CPA, MPS
Asst. Chief, Assessment Division
Revenue Region No. 19-Davao City
I. REGISTER
1901 SELF-EMPLOYED/PROFESSIONALS/TRUST
1903 CORPORATIONS / GOCC /PARTNERSHIP
1903 GOVERNMENT AGENCIES / LGUs
WHEN:
ON OR BEFORE COMMENCEMENT OF BUSINESS/
BEFORE PAYMENT OF ANY TAX DUE/
UPON FILING A RETURN
10 DAYS AFTER BECOMING AN EMPLOYER
( SEC 2.83.6 Rev. Regulations No. 2-98)
WHERE: RDO
2
Duties & Obligations of a Withholding Agent
3
 To register
 To deduct and withhold
 To remit the tax withheld
 To file withholding tax returns
 To issue withholding tax certificate
Designation of Government Officials as
Withholding Agents
4
 All Heads of Offices (officials holding the highest
position)
 Provincial Governors and Treasurers
 City Mayors and Treasurers
 Municipal Mayors & Treasurers
 Brgy. Captains and Treasurers
Note: including their respective accountants
Liability of Designated Officers
1. Additions to the tax
• The designated treasurers, chief accountants, and
other persons holding similar positions who have the
duty to withhold and remit shall be personally
liable for the additions to the tax
2. Upon conviction for each act or omission, be fined of
not less than P5,000 but not more than P50,000 or
imprisonment, or both
5
EXPANDED
WITHHOLDING TAX
6
DIFFERENCE: FINAL AND CREDITABLE
WITHHOLDING TAX
FINAL
CREDITABLE
• the amount of income tax
withheld by the withholding
agent is constituted as a full
& final payment
• taxes withheld are
intended to equal the tax due
of the payee on the said
income
• liability rests with the
payor as withholding agent
• the income recipient is still
required to file an income tax
return
• payee is not required to
file an ITR for the particular
income
7
INCOME PAYMENTS
SUBJECT TO EWT
A. Professional
fees, talent fees,
etc., for services
rendered by
individuals
DESCRIPTION
15% if gross income exceeds P720T
10% if otherwise
On the gross professional, promotional and talent
fees or any other form of remuneration for the
services rendered.
1) Those engaged in the practice of profession –
all profession requiring gov’t licensure
examination and/or regulated by PRC,
Supreme Court, etc.
2) Professional entertainers
3) Professional athletes
8
INCOME PAYMENTS
SUBJECT TO EWT
DESCRIPTION
4) Directors and producers of movies,
stage, etc.
5) Insurance agents and adjusters
6) Management and technical
consultants
7) Bookkeeping agents and agencies
8) Other recipients of talent fees
9) Fees of directors who are not
employees of the company including
per diems, allowances and any other
form of income payments not subject
to w/holding tax on compensation.
9
INCOME
PAYMENTS
SUBJECT
TO EWT
DESCRIPTION
DISCLOSURE REQUIREMENT
Every individual shall periodically disclose his
gross income for the current year to the BIR by
submitting a Notarized Sworn Declaration to
the Collection Division of the Regional Office
having jurisdiction of the income earner in (3)
copies.
10
INCOME
PAYMENTS
SUBJECT
TO EWT
DESCRIPTION
DISCLOSURE REQUIREMENT (CONT…)
Can also be filed by the income payor on behalf of the
professionals/talents/directors whose services were being
rendered exclusively to the aforesaid payor;
Should be filed on June 30 of each year or w/in 15 days
after the end of the month the
professional/talent/directors income reaches P720T, w/c
ever comes first.
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INCOME PAYMENTS
SUBJECT TO EWT
B. Professional Fees,
talent fees, etc., for
services of taxable
juridical persons
DESCRIPTION
15% if gross income exceeds P720T
10% if otherwise
On the gross professional, promotional and
talent fees or any other form of remuneration
for the services rendered.
12
INCOME
PAYMENTS
SUBJECT TO
EWT
C. Rentals
DESCRIPTION
1. On real properties – 5%
2. On personal properties - on gross rental
or lease in excess of P10,000 annually
(The P10,000 threshold shall not apply when the
accumulated gross rental or lease exceeds or reasonably
expected to exceed P10,000 within the year.)
“Reasonably expects” is determined when
it clearly shows in the documents like
lease
contracts/agreement the amount to be
received within a given period.
3. Poles, satellites and transmission facilities – 5%
4. Billboards – 5%
13
INCOME PAYMENTS
SUBJECT TO EWT
D. Cinematographic
film rental and other
payments
DESCRIPTION
5% on gross payment
E. Income Payments to 2% on gross payments of the ff:
certain contractors
1. General engineering contractors
2. General building contractors
3. Specialty contractors
4. other contractors
a. Filling, demolition, salvage work
contractors and operators of mine drilling
apparatus;
b. Operators of dockyards;
14
INCOME
PAYMENTS
SUBJECT TO
EWT
DESCRIPTION
Other Contractors (con’t.)
c) persons engaged in the installation of water system,
and gas or electric light, heat or power;
d) Operators of stevedoring, warehousing or forwarding
establishments;
e) Transportation contractors, where the gross payments
to the same payee amounts to at least P2,000/mo.
regardless of the number of shipments during the
month
f) Printers, bookbinders, lithographers and publishers
(with certain exceptions)
g) Messengerial, janitorial, private detective and/or
collection agencies and other business agencies
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INCOME
PAYMENTS
SUBJECT TO EWT
DESCRIPTION
Other Contractors (con’t.)
h) advertising agencies, exclusive of gross payments to
media;
i) Independent producers of TV, radio and stage
performances or shows;
j) Independent producers of “jingles”;
k) Labor recruiting agencies and/or “labor-only” contractors
l) Persons engaged in the installation of elevators, central
airconditioning units, computer machines and other
equipment and machineries and the maintenance
services thereon;
16
INCOME
PAYMENTS
SUBJECT TO EWT
DESCRIPTION
Other Contractors (con’t.)
m) Persons engaged in the sale of computer services,
computer programmers, software/program
developer/designer, internet service providers, web
page designing, computer data processing, conversion
or base services and other computer related services;
n) Persons engaged in landscaping services;
o) Persons engaged in collection and disposal of garbage;
p) TV and radio station operators on sale of TV and radio
airtime; and
q) TV and radio blocktimers on sale of TV and radio
commercial spots.
17
INCOME PAYMENTS
SUBJECT TO EWT
F. Income distribution
to the beneficiaries
DESCRIPTION
15% on the income distributed to the
beneficiaries of estates and trusts
G. Gross payments to 10% on gross commissions or service fees
certain brokers and
agents
H. Income payments to On income payments made to partners such as
partners of general drawings, advances, sharings, allowances and
professional
stipends
partnerships
15% if gross income exceeds P720T
10% if otherwise
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INCOME PAYMENTS
SUBJECT TO EWT
I.
Professional fees
paid to medical
practitioners
DESCRIPTION
15% if gross income exceeds P720T
10% if otherwise
1. On PF paid by hospitals or clinics, or paid directly
to the medical practitioners by patients who were
admitted and confined
2.
PF paid by HMOs to medical practitioners
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INCOME PAYMENTS
SUBJECT TO EWT
DESCRIPTION
•It shall be the duty of the
hosp./clinic/HMO to remit taxes withheld
from professional fees
•The W/tax shall not apply if there is
proof that no PF has in fact been
charged in a form of sworn declaration
•The hosp shall inform the BIR about any
medical practitioner who fails or refuses
to execute the sworn declaration within
ten days from occurrence.
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INCOME PAYMENTS
SUBJECT TO EWT
DESCRIPTION
•Hospitals and clinics shall submit the names and
address of medical practitioners every 15th day
after end of each quarter
•The hospitals and clinics shall be responsible
for the accurate computation, timely remittance
and issuance of withholding tax certificates every
20th day following close of the taxable quarter or
upon request of the payee
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INCOME PAYMENTS
SUBJECT TO EWT
DESCRIPTION
J. Gross selling price or
total amount of
consideration or its
equivalent paid to
seller/owner for the sale,
exchange, or transfer of
real property classified ad
ordinary asset
Seller/transferor is exempt from Creditable Withholding
Tax (CWT) in accordance with Sec. 2.57.5 of the
regulation
Seller/transferor is habitually engaged in the real
estate business:
Selling price is P500k of less
- 1.5%
SP <P500K but => P2M
- 3.0%
SP <P2M
- 5.0%
Seller/transferor is not habitually
engaged in the real estate business - 6.0%
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INCOME PAYMENTS
SUBJECT TO EWT
DESCRIPTION
K. Additional income
payments to gov’t.
personnel from
importers, shipping and
airline companies
On gross additional payments to gov’t.
personnel for overtime services as
authorized by law - 15%
L. Certain income
payments made by
credit card companies
1% on ½ of the gross amounts paid
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INCOME PAYMENTS
SUBJECT TO EWT
M. Income payments made
by the top 20K private
corp. to their local/
resident supplier of
goods/services other
than those covered by
other wtax rates
DESCRIPTION
Supplier of goods – 1%
Supplier of services – 2%
Withholding tax on Agricultural Purchases in their
original state shall apply only on excess of the
cumulative amount of P300,000 within the same
taxable year.
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On Agricultural Products
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For purchases involving agricultural
products in their original state, the tax
required to be withheld shall only apply
to purchases in excess of the cumulative
amount of P300,000.00 within the same
taxable year.
On Agricultural Products
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 Agricultural Products in their original state
shall only include:
• corn
• copra
• rice
• sugar cane
• coffee
• marine food
• coconut
products
• vegetables
• palay
• cassava
• fruits
• poultry and
livestocks
Illustration:
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Number of
Transactions
Year
Purchase Amount
One
2009
P 90,000
Two
2010
320,000
One
2011
400,000
One
2012
90,000
Amount28of EWT:
 In 2009
 In 2010
 In 2011
 In 2012
-
not subject
P20,000 x 1% = P200.00
P100,000 x 2% = P1,000
not subject
INCOME PAYMENTS
SUBJEC TO EWT
N. Income payments
made by the gov’t. to
its local/resident
supplier of
goods/services other
than those covered by
other wtax rates
DESCRIPTION
Supplier of goods – 1%
Supplier of services – 2%
Income payments, except any single purchase which is
P10,000 and below, which are made by a gov’t. office
on their purchases of goods and purchase of services
from local resident suppliers.
GOCCs shall withhold taxes under Sec. N rather than
Sec. M
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INCOME PAYMENTS
SUBJEC TO EWT
DESCRIPTION
O. Commissions of
independent and/or
exclusive sales
representatives, and
marketing agents and
companies
10% on gross commissions, rebates, discounts, and
other similar considerations
P. Tolling fees paid to
refineries
5% on gross processing/tolling fees
30
INCOME PAYMENTS
SUBJEC TO EWT
DESCRIPTION
Q. Payments made by 1% on gross payments
pre-need
companies to
funeral parlor
R. Payments to
embalmers
1% on gross payment
S. Income payments
to suppliers of
agricultural
products
1% (suspended by RR 3-2004)
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INCOME PAYMENTS
SUBJEC TO EWT
DESCRIPTION
T. Income payments on
10% on income payments
purchases to minerals,
mineral products and
quarry resources as
defined and discussed
in Sec. 151 of the Tax
Code
U. MERALCO payments
10% / 20%
V. Interest income on the 10% / 20%
refund paid either
through direct
payment or application
against customers’
billing by other electric
distribution utilities.
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INCOME PAYMENTS
SUBJECT TO EWT
W. Income payments
made by the top 5K
individual taxpayers
to their local/resident
supplier of
goods/services other
than those covered
by other w/tax rates
DESCRIPTION
Individuals engaged in trade or
business including non resident aliens
engaged in trade or business in the
Philippines.
Withholding tax on Agricultural
Purchases in their original state shall
apply only on excess of the cumulative
amount of P300,000 within the same
taxable year.
Supplier of goods – 1%
Supplier of services – 2%
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Persons Required to Deduct & withhold
34
 Juridical persons, whether or not engaged in
trade or business;
 Individuals in connection with his trade or
business, however, individual buyers of real
properties are also constituted as withholding
agents;
 All government offices.
Persons Required to Deduct & withhold
35
Agents, employees or any person purchasing
goods or services/paying for and in behalf of the
aforesaid withholding agents
 shall likewise withhold in their behalf
 the official receipts/invoices must be issued in the
name of the person whom the former represents
 The withholding tax certificate must be issued
immediately
Persons Required to Deduct & withhold
RR 30-2003
36
All income payments which are required to be
subjected to WT shall be subject to the corresponding
rate to be withheld by the person having control over
the payment and who claims the expenses.

Utilities even if the meter or billing statement is not in the name of the
payor

With valid proof like contract between registered user and payor
Time of Withholding (RR 12-2001)
The obligation to deduct and withhold arises at the time
an income payment is
• paid or payable or
• an income payment in accrued or recorded as an
expense or asset in the payor’s book, whichever
comes first.
The term payable refers to the date the obligation
becomes due, demandable or legally enforceable.
37
Time of Withholding (RR 12-2001)
Provided however, that were income is not yet paid
or payable but the same has been recorded as an
expense or asset, the obligation to withhold shall arise in
the last month of the return period in which the same is
claimed as an expense or amortized for tax purposes.
38
Exemption from Withholding on Income Tax
Shall not apply to income payments made to the ff:
A. National gov’t. and its instrumentalities, including
provincial, city or municipal governments and barangays
except GOCCs (RR 14-2002)
B. Persons enjoying exemption from payment of Income Tax
1. HLURB/HDUCC registered
2. BOI/PEPZ/SBMA/Omnibus Investment Code
39
Exemption from Withholding from Income Tax
3.
*
*
*
*
*
Corporation which are exempt from Income Tax
GSIS
SSS
PHIC
Local Water District (RMC 28-2010)
PCSO
4. Gen. Professional Partnerships
5. Joint ventures or consortium (RR 14-2002)
40
FINAL
WITHHOLDING
TAX
41
Income Payments Subject to Final
Withholding Tax:
Interest from any peso bank deposit, and yield or any
other monetary benefit from deposit substitutes and
from trust funds and similar arrangements – 20%
Royalties (except on books as well as other literary works
and musical compositions – 20%
Prizes (except prizes amounting to P10,000.00 or
less )– 20%
Winnings (except Philippines Charity Sweepstakes
Winnings and lotto winnings ) - 20%
42
Income Payments Subject to Final
Withholding Tax:
Royalties on books, as well as other literary works and musical
compositions – 10%
Interest income received by a resident individual taxpayer
from a depository bank under the Foreign Currency Deposit
System – 7.5%
43
Income Payments Subject to Final
Withholding Tax:
Cash and/or property dividends (received by
individuals) - 10%
Net capital gains from sale, barter, exchange of shares of
stocks in a domestic (except through stock exchange ):
Not over P100,000.00 - 5%
On any amount in excess of P100,000.00 – 10%
44
Income Payments Subject to Final
Withholding Tax:
Interest income from long-term deposit or
investment :
Four years to less than five years – 5%
Three years to less than four years – 12%
Less than three years – 20%
On capital gains from sale, exchange, or
other disposition of real property classified
as capital assets - 6%
45
WITHHOLDING TAX ON
VALUE ADDED TAX
AND
PERCENTAGE TAX
46
Withholding Tax of VAT
General Rule: VAT due on sales of goods and services are not subject to
withholding since the tax is not determinable at the time of sale. Except:
1. Gross payments to non-residents by both gov’t. and private entities for
services rendered in the Phils.
a. For lease or use of property or property rights to
non-resident owners(final)
- 10%
b. Services rendered to local insurance companies
with respect to reinsurance premiums payable
to non-resident insurance or reinsurance
companies (final)
- 10%
c. Other services rendered in the Phils.
by non-residents (final)
- 10%
2. Sale of goods and services to government
47
Final Withholding VAT on Government
Purchases
OLD NIRC
Contractors by the
government or any of
its political
subdivisions,
instrumentalities or
agencies, including
government-owned
and controlled
corporations
(GOCCs)
3%
on gross payment for
the purchase of goods
6%
on gross receipts for
services by contractors
8.5%
on government public
works contractors
48
RA 9337
5%
Final
VAT
Withholding on Percentage Tax
1. Persons exempt from VAT
-
3%
2. Domestic carriers and keepers of garages
• Cars for rent or hire
• Transportation contractors
• Domestic carriers by land, air or water
-
3%
3. International carriers doing business in the Phils.
-
3%
4. Franchises
-
3%
5. Banks and non-bank financial intermediaries
- 0%, 1%, 3%, 5%
6. Finance Companies
- 0%, 1%, 3%, 5%
7. Life insurance premiums (w/ certain exclusions)
-
49
5%
Withholding on Percentage Tax
8 . Agents of foreign insurance companies
-
10% /5%
9. Amusements
- 18%,10%, 15%, 30%
10. Sale, barter or exchange of shares or stocks listed
or traded through local stock exchange
-
½ of 1%
11. Shares of stock sold or exchanges through initial
public offering
1%, 2%, 4%
-
12. On gross payments to stock, real estate,
commercial, customs, insurance and immigration
brokers based on gross receipts
-
50
7%
ON GOVERNMENT
MONEY PAYMENTS
RMC 56-2009
51
CREDITABLE
NATURE OF INCOME PAYMENT
52
INCOME %
TAX
TAX
FINAL
VAT
2%
3%
5%
2%
3%
5%
2%
3%
5%
domestic – air, sea & land (Phils to foreign
country)
2%
none
none
Int’l. – air & sea (Phils. To Foreign)
2%
3%
none
Communication Services (Smart, PLDT, etc)
Repairs and Maintenance of Gov’t. Facilities
and Vehicles
Transport of Goods, Merchandise, Cargo
domestic –air, sea & land (w/in the Phils)
CREDITABLE
NATURE OF INCOME PAYMENT
53
INCOME %
TAX
TAX
FINAL
VAT
Transport of Passengers:
domestic –air, & sea (w/in the Phils)
domestic – land (w/in the Phils)
Int’l. – air & sea (Phils. To Foreign)
Purchase of Supplies & Materials, including
equipments
2%
none
5%
2%
3%
none
2%
3%
none
1%
3%
5%
Illustration
The BIR, a national gov’t. agency, buys a domestic ticket at a PAL
authorized travel agency with the following details:
Ticket No.
Route
All-in Fare (including YQ – insurance/fuel charges) ASF (Travel Tax)
12% VAT
Agency Fee (inclusive of VAT)
448.00
079-2301123456
MNL-DVO-MNL
P 6,353.00
15.00
762.36
-
Compute for the Withholding Tax due to the airline company and travel
agent:
a. Expanded Withholding Tax
b. Wtax on Government Money Payments
54
Answer:
I.
AIRLINE COMPANY
a. Expanded Withholding Tax
P6,353.00 x 2% = P 127.06
b. GMP
P6,353.00 x 5% = P 317.65
II. TRAVEL AGENCY
a. EWT (P448.00/112%) x 2% = P 8.00
b. GMP
i. If VAT Taxpayer (P448.00/112%) x 5% = P20.00
ii. If Non-VAT
(P448.00 x 3%)
= P13.44
55
CREDITABLE
NATURE OF INCOME PAYMENT
FINAL
INCOME
TAX
%
TAX
VAT
1. Real Property
5%
3%
5%
2. Cinematographic films
5%
3%
5%
3. Personal Property (in excess of P10,000
except financial leasing)
5%
3%
5%
None
None
12%
None
None
12%
None
None
12%
Payment for Rental of Properties
56
Payment for:
a. Use or Lease of property or property
rights to non-resident owner
b. Services rendered by local insurance
companies with respect to
reinsurance premiums payable to
non-residents
c. Other services rendered in the Phils. by
non-residents
CREDITABLE
57
NATURE OF INCOME PAYMENT
FINAL
INCOME
TAX
%
TAX
VAT
Manila Water Company, Inc.
2%
None
5%
Maynilad Water Services, Inc. (MWSI)*
2%
None
5%
none
none
5%
2%
2%
5%
Payment to Water Distribution Utilities
*Income Tax Holiday up to Dec. 31,
2009 (BIR Ruling No. DA-278-2009)
Other Water Utilities
CREDITABLE
NATURE OF INCOME PAYMENT
Payment to Power Distribution Utilities58
FINAL
INCOME
TAX
%
TAX
VAT
2%
None
5%
Meralco, VECO, etc.
Electric Coops
1. Registered with NEA
none
none
5%
none
none
5%
none
none
5%
none
none
5%
none
none
5%
2. Registered with CDA
a. Do not transact with non-members
b. Transacting w/ members & non-mem
b.1 With members
b.2 With members and have an
accumulated reserves and
undivided net savings of not
more than P10M
b.3 With members and have an
accumulated reserves and
undivided net savings of
more than P10M
Wtax on power consumption
59
 DLPC
2% EWT
 5% VAT
 Wtax certificates on VAT are issued to different companies
 DURECO
 5% VAT
 No EWT (with certificate of tax exemption)
 DANECO
 2% EWT
 5% VAT
 DASURECO
 2% EWT
 5% VAT

Sample Bill of Davao Light & Power Co.
60
AMOUNT
DUE
Generation and Transmission
Distribution Charges
P 78,316.95
20,107.86
Other Charges
933.29
Franchise Tax-Local
814.74
VAT
5,495.40
Universal Charges
1,729.73
TOTAL BILL
P107,397.97
Sample Bill of Davao Light & Power Co.
61
AMOUNT DUE
PSALM
FINAL TAX
11,077.80
553.89
837.20
41.86
5,229.40
261.47
837.20
41.86
DLPC – 5%
27,813.40
1,390.67
DLPC – 2%
100,172.84
HEDCOR SIBULAN, INC.
NGCP
TMI
TOTAL TAXES WITHHELD
Total VAT per DLPC Bill
divided by
Total Bill subject to VAT
EWT
2,003.46
2,289.75
= P 5,495.40
12%
P45,795.00 x 5% = P 2,289.75
2,003.46
CREDITABLE
NATURE OF INCOME PAYMENT
62
INCOME
TAX
FINAL
%
TAX
VAT
none
none
none
2%
none
5%
none
none
none
1%
none
5%
Payment for Trainings and Seminars
2%
3%
5%
Purchase of Gasoline/Petroleum Products
1%
3%
5%
For Services Rendered by Gasoline Stations
2%
3%
5%
Payment to Cooperatives (other than Electric
Cooperatives duly registered with CDA)
SERVICES
A. 1. With BIR issued exemption certificate 2. W/o BIR issued exemption certificate
GOODS
B. 1. With BIR exemption certificate
2. Without BIR exemption certificate
CREDITABLE
NATURE OF INCOME PAYMENT
63
Payment of Insurance Premiums
Non-Life
INCOME
TAX
%
TAX
FINAL
VAT
2%
3%
5%
2%
5%
none
Payment for Purchase of Library Books
1%
none
None
Payment for Purchase of Other Library
Materials
1%
3%
5%
2%
3%
5%
Payment of Professional Services rendered by
GPP
none
3%
5%
Payment of Professional Fee paid to Juridical
Person
10% or
15%
3%
5%
3%
5%
Life
Payment for Services of the contractors:
Security, Janitorial, Maintenance of aircon,
computers, elevators, etc.
Payment of Professional Fee paid to Individuals 10% or
15%
CREDITABLE
FINAL
NATURE OF INCOME PAYMENT
64
INCOME
TAX
Payment for Purchase of Other Goods
1%
3%
5%
1%
none
none
Payment of Commissions or Service Fees Paid
to Customs, Insurance, Real Estate, Stock,
Immigration and Commercial Brokers
10%
3%
5%
Payment for Purchase of Services other than
those covered by other rates of withholding
tax (RR 17-2003)
2%
3%
5%
1.5%,
3%, 5%
or 6%
3%
5%
%
TAX
VAT
(for casual or single purchase of P10k & above)
Payment for Purchase of Agricultural Products
(except corn, coconut etc. per RR 6-2009)
(for single or casual purchase or P10k & above)
For Purchase of Land Classified as Ordinary
Asset
CREDITABLE
FINAL
NATURE OF INCOME PAYMENT
65
INCOME
TAX
For Land Improvements - goods
-services
1%
2%
3%
3%
5%
5%
For Buildings and Improvements
Straight Contract (Labor & Materials)-Service
2%
3%
5%
Separate Invoice/Billing for Materials-goods 1%
3%
5%
Separate Invoice/Billing for Labor
2%
3%
5%
For Furniture, Fixtures, and Equipment
1%
3%
5%
For Information Technology (IT) Equipment
- Services
- Goods
2%
1%
3%
3%
5%
5%
Payment to Radio & TV Broadcasting
Companies Whose Annual Gross Receipts do
2%
not exceed P10M and who are Non-VAT reg. TP
3%
none
10%
none
Payment to Agents of Foreign Insurance
Companies –Insurance Agents
2%
%
TAX
VAT
CREDITABLE
66
NATURE OF INCOME PAYMENT
Payment to Agents of Foreign Insurance
Companies – Owner of the Property
INCOME
TAX
2%
Payment for Sale, barter or exchange of stocks
Listed and traded through Local Stock
2%
Exchange
Payment for shares of stock sold or exchanged
through initial and secondary public offering
-not over 2%
-over 25% but not exceeding 33 1/3%
- Over 33 1/3%
2%
2%
2%
%
TAX
FINAL
VAT
5%
none
½ of
1%
none
4%
2%
1%
None
None
none
CREDITABLE
67
NATURE OF INCOME PAYMENT
INCOME
TAX
%
TAX
FINAL
VAT
Payment to Banks and Non-Bank Financial
Intermediaries performing quasi-banking
functions (Sec. 121 of RA 8424 as amended by RA
9337)
1.On interests, commissions and discounts from
lending activities as well as income from financial
leasing, on the basis of remaining maturities of
instruments from which such receipts are derived:
- Maturity period is 5 years or less
- Maturity period is more than 5 years
2. On dividends and equity shares and net income
of subsidiaries
2%
5%
None
2%
2%
5%
1%
none
None
2%
0%
none
CREDITABLE
68
NATURE OF INCOME PAYMENT
INCOME
TAX
%
TAX
FINAL
VAT
3. On the following payments treated as gross
income under Sec. 32 of the Tax Code:
-Royalties
-Rental of Property
-Profits for exchange and all other items
treated as gross income
4. On the net trading gains within the taxable
year on foreign currency, debt securities,
derivatives, and other similar financial
instruments
None
5%
none
7%
7%
7%
None
None
None
None
7%
None
Illustration
69
 The Office of the Provincial Capitol of Davao del Sur
purchased the following goods and services for the
month of Feb. 2012.
Invoice Price
Rice
P50,000.00
 Construction Materials
44,800.00
 Repair of Aircon Units
22,400.00
 Rental of equipments
33,600.00
Compute for the withholding tax on government money
payments assuming the seller is:
a) Non-VAT registered
b) VAT taxpayer

Answer – Non VAT Supplier
70
Invoice
Price
Tax Base
Tax Rate
EWT
Rice
50,000.00
50,000.00
EWT 1%
500.00
Const.
Materials
44,800.00
44,800.00
EWT – 1%
GMP – 3%
448.00
Repair of
Aircon
Untis
22,400.00
EWT – 2%
GMP – 3%
448.00
EWT – 5%
GMP – 3%
1,680.00
Rental of
33,600.00
Equipments
22,400.00
33,600.00
GMP
% Tax
None
1,344.00
672.00
1,008.00
Answer – VAT Supplier
71
Invoice
Price
Rice
Const.
Materials
Repair of
Aircon
Untis
50,000.00
Tax Base
Tax Rate
EWT
50,000.00
EWT 1%
500.00
400.00
44,800.00
40,000.00
EWT – 1%
GMP – 5%
22,400.00
20,000.00
EWT – 2%
GMP – 5%
400.00
Rental of
Equipments 33,600.00
30,000.00
EWT – 5%
GMP – 5%
GMP
VAT
None
2,000.00
1,000.00
1,500.00
1,500.00
ON MANDATORY
ATTACHMENTS
RR No. 2-2006
72
REVENUE REGULATIONS NO. 2-2006
M A N D ATO RY AT TA C H M E N T S :
1 . M O N T H LY A L P H A L I S T 73O F PAY E E S ( M A P )
W H O S E I N C O M E R E C E I V E D H AV E B E E N
S U B J E C T E D TO W I T H H O L D I N G TA X I N T H E
W I T H H O L D I N G TA X R E M I T TA N C E R E T U R N
F I L E D B Y T H E W I T H H O L D I N G A G E N T / PAY O R
O F I N C O M E PAY M E N T S
Monthly Alphalist of Payees(MAP)
74
 is a consolidated alphalist of
income earners
from whom taxes have been withheld by the
payor of income for a given return period and in
whose behalf, the taxes were remitted.
 It contains a summary of information on taxes
withheld and remitted through the monthly
remittance returns
(BIR Form Nos. 1601E, 1601-F, 1600) showing , among others,
total amounts of income/gross sales/gross receipts and
 taxes withheld and remitted.

FORMAT
Annex “B”
BIR REGISTERED NAME
TRADE NAME
ADDRESS
TIN
MONTHLY ALPHALIST OF PAYEES (MAP)
RETURN PERIOD (mm/yyyy)
TIN
Seq
no.
1
Including
branch
code
Registered Name
(Alphalist)
3
Return
period
mm/yy
4
ATC
5
Nature of income
payment
6
AMOUNT
Tax base
7
Tax rate
8
Tax Withheld
9
2
1
2
3
4
5
TOTAL
AMOUNT
P
I declare under the penalties of perjury, that this has been made in good faith, verified by me, and to the best of my knowledge and
belief, is true and correct pursuant to the provisions of the NIRC, and the regulations issued under the authority thereof; that the information
contained herein completely reflects all income payments with the corresponding taxes withheld from payees are duly remitted to the BIR and
proper Certificates of Creditable Withholding Tax at Source (BIR Form Nos. 2304/2307/2306/2316) have been issued to payees; that, the
information appearing herein shall be consistent with the total amount remitted and that, inconsistent information shall result to denial of the
claims for expenses.
__________________________
Signature over printed name
Taxpayer/Authorized representative
75
Attachments to BIR Form Nos. 1601-E,
1601-F, 1600
Monthly Alphalist of Payees
76
Below 10 payees
- hard copy
10 or more payees
- 3.5 diskette
EFPS regardless of the
number of income payees/
income recipient
- e-attach
1601-E
MAP
(To be filled up by the B IR)
DLN:
PSIC:
Monthly Remittance Return
of Creditable Income Taxes
Withheld (Expanded)
(Except for transactions involving onerous transfer
BIR Form No.
Republika ng Pilipinas
Kagaw aran ng Pananalapi
Kaw anihan ng Rentas Internas
April 2003 (ENCS)
of real property classified as ordinary
Fill in all applicable spaces. Mark all appropriate boxes w ith an “X”.
1 For the Month
2 Amended Return?
3 No. of Sheets Attached
4 Any Taxes Withheld?
(MM / YYYY)
Yes
Yes
No
Part I
Ba c k g r o u n d I n f o r m a t i o n
5 TIN
6 RDO Code
7 Line of Business
8
Withholding Agent's Name
FORMAT
1601-E
(Last Name, First Name, M iddle Name fo r Individuals)/(Registered Name fo r No n-Individuals)
Annex “B”
No
Telephone Number
9
10 Registered Address
BIR REGISTERED NAME
TRADE NAME
ADDRESS
TIN
11 Zip Code
12 Category of Withholding Agent
Private
Government
13 Are there payees availing of tax relief under special law or international tax treaty?
No
If yes, specify
Yes
Part II
Com putation of Tax
NATURE OF INCOME PAYMENT
ATC
TAX
RATE
TAX BASE
TAX REQUIRED
TO BE WITHHELD
MONTHLY ALPHALIST OF WITHHOLDING TAXES (MAWT)
RETURN PERIOD
Seq TIN
no.
1
2
Registered Name
(Alphalist)
3
Return Nature of income ATC Tax rate Tax base Tax
period
payment
Withheld
mm/yy
5
4
6
7
8
9
1
2
14 Total Tax Required to be Withheld and Remitted
15
Less: Tax Remitted in Return Previously Filed, if this is an amended return
16 Tax Still Due/(Overremittance)
17
Add: Penalties
Surcharge
Interest
17A
17B
17C
18 Total Amount Still Due/(Overremittance) (Sum of Items 16 & 17D)
14
15
16
3
4
5
Compromise
17D
18
I declare, under the penalties of perjury, that this return has been made in good faith, verified by me, and to the best of my know ledge, and belief,
is true and correct, pursuant to the provisions of the National Internal Revenue Code, as amended, and the regulations issued under authority thereof.
19
President/Vice President/Authorized Representative/Tax Agent
(Signature Over Printed Name)
Treasurer/Asst. Treasurer/Authorized Representative
(Signature Over Printed Name)
Title/Position of Signatory
WITHHOLDING
Draw ee Bank/
Agency
Tax A gent A ccreditatio n No ./Date o f A ccreditatio n (if applicable)
Details of Paym ent
Date
MM
DD
YYYY
Stamp of Receiving
Office and
Date of Receipt
Am ount
21
1601-F
MAP
FORMAT
(To be filled up by the B IR)
DLN:
PSIC:
Republika ng Pilipinas
Kagaw aran ng Pananalapi
Kaw anihan ng Rentas Internas
AGENTS
(PAYORS)
Num ber
Monthly Remittance Return
of Creditable Income Taxes
Withheld (Expanded)
BIR Form No.
1601-E
(Except for transactions involving onerous transfer
April 2003 (ENCS)
of real property classified as ordinary
Fill in all applicable spaces. Mark all appropriate boxes w ith an “X”.
1 For the Month
2 Amended Return?
3 No. of Sheets Attached
4 Any Taxes Withheld?
(MM / YYYY)
Yes
Yes
No
Part I
Ba c k g r o u n d I n f o r m a t i o n
5 TIN
6 RDO Code
7 Line of Business
8
Withholding Agent's Name
P
Title/Position of Signatory
TIN of Tax Agent (if applicable)
Part III
Particulars
21 Cash/Bank
TOTAL P
AMOUNT
20
(Last Name, First Name, M iddle Name fo r Individuals)/(Registered Name fo r No n-Individuals)
9
10 Registered Address
Annex “B”
No
BIR REGISTERED NAME
TRADE NAME
ADDRESS
TIN
Telephone Number
11 Zip Code
12 Category of Withholding Agent
Private
Government
13 Are there payees availing of tax relief under special law or international tax treaty?
No
If yes, specify
Yes
Part II
Com putation of Tax
NATURE OF INCOME PAYMENT
ATC
TAX BASE
TAX
RATE
TAX REQUIRED
TO BE WITHHELD
MONTHLY ALPHALIST OF WITHHOLDING TAXES (MAWT)
RETURN PERIOD
Seq TIN Registered Name Return Nature of income ATC Tax rate Tax base Tax
no.
(Alphalist)
period payment
Withheld
3
mm/yy
5
1 2
4
6
7
8
9
1
2
14 Total Tax Required to be Withheld and Remitted
15
Less: Tax Remitted in Return Previously Filed, if this is an amended return
16 Tax Still Due/(Overremittance)
17
Add: Penalties
Surcharge
Interest
17A
17B
17C
18 Total Amount Still Due/(Overremittance) (Sum of Items 16 & 17D)
3
4
5
14
15
16
Compromise
17D
18
I declare, under the penalties of perjury, that this return has been made in good faith, verified by me, and to the best of my know ledge, and belief,
is true and correct, pursuant to the provisions of the National Internal Revenue Code, as amended, and the regulations issued under authority thereof.
19
President/Vice President/Authorized Representative/Tax Agent
(Signature Over Printed Name)
Treasurer/Asst. Treasurer/Authorized Representative
(Signature Over Printed Name)
Title/Position of Signatory
Particulars
21 Cash/Bank
Draw ee Bank/
Agency
Tax A gent A ccreditatio n No ./Date o f A ccreditatio n (if applicable)
Details of Paym ent
Date
MM
DD
YYYY
Num ber
Stamp of Receiving
Office and
Date of Receipt
Am ount
21
1600
MAP
FORMAT
(To be filled up by the B IR)
DLN:
PSIC:
Republika ng Pilipinas
Kagaw aran ng Pananalapi
Kaw anihan ng Rentas Internas
Monthly Remittance Return
of Creditable Income Taxes
Withheld (Expanded)
BIR Form No.
1601-E
(Except for transactions involving onerous transfer
April 2003 (ENCS)
of real property classified as ordinary
Fill in all applicable spaces. Mark all appropriate boxes w ith an “X”.
1 For the Month
2 Amended Return?
3 No. of Sheets Attached
4 Any Taxes Withheld?
(MM / YYYY)
Yes
Yes
No
Part I
Ba c k g r o u n d I n f o r m a t i o n
5 TIN
6 RDO Code
7 Line of Business
8
P
Title/Position of Signatory
TIN of Tax Agent (if applicable)
Part III
TOTAL P
AMOUNT
20
Withholding Agent's Name
(Last Name, First Name, M iddle Name fo r Individuals)/(Registered Name fo r No n-Individuals)
10 Registered Address
9
Annex “B”
No
BIR REGISTERED NAME
TRADE NAME
ADDRESS
TIN
Telephone Number
11 Zip Code
12 Category of Withholding Agent
Private
Government
13 Are there payees availing of tax relief under special law or international tax treaty?
No
If yes, specify
Yes
Part II
Com putation of Tax
NATURE OF INCOME PAYMENT
ATC
TAX BASE
TAX
RATE
TAX REQUIRED
TO BE WITHHELD
MONTHLY ALPHALIST OF WITHHOLDING TAXES (MAWT)
RETURN PERIOD
14 Total Tax Required to be Withheld and Remitted
15
Less: Tax Remitted in Return Previously Filed, if this is an amended return
16 Tax Still Due/(Overremittance)
17
Add: Penalties
Surcharge
Interest
17A
17B
17C
18 Total Amount Still Due/(Overremittance) (Sum of Items 16 & 17D)
Seq TIN Registered Name Return Nature of income ATC Tax rate Tax base Tax
no.
(Alphalist) period payment
Withheld
3
mm/yy
5
1 2
4
6
7
8
9
1
14
15
16
2
Compromise
17D
18
I declare, under the penalties of perjury, that this return has been made in good faith, verified by me, and to the best of my know ledge, and belief,
is true and correct, pursuant to the provisions of the National Internal Revenue Code, as amended, and the regulations issued under authority thereof.
19
President/Vice President/Authorized Representative/Tax Agent
(Signature Over Printed Name)
Treasurer/Asst. Treasurer/Authorized Representative
(Signature Over Printed Name)
Title/Position of Signatory
Title/Position of Signatory
TIN of Tax Agent (if applicable)
Part III
Particulars
21 Cash/Bank
Draw ee Bank/
Agency
Num ber
3
4
5
20
Tax A gent A ccreditatio n No ./Date o f A ccreditatio n (if applicable)
Details of Paym ent
Date
MM
DD
YYYY
Am ount
TOTAL P
AMOUNT
Stamp of Receiving
Office and
Date of Receipt
21
77
P
BIR
Statements and Returns
78
 Requirement for List of Payees

Less than ten (10) payees
Manually

prepared alphalist
With ten(10) or more payees
Manually
prepared alphalist + softcopy
In diskette/cd/or email:
[email protected]
II. WITHHOLD TAXES
TIME
TAX BASE
COMPENSATION
WHEN PAID /
CONTRUCTIVELY
PAID
TAXABLE
COMPENSATION
INCOME
EXPANDED
GMP
WHEN PAID /
PAYABLE
GROSS PAYMENT
(NET OF VAT)
WHEN PAID /
PAYABLE
GROSS PAYMENT
WHEN PAID /
PAYABLE
GROSS PAYMENT
WHEN PAID
GROSS –UP
MONETARY VALUE
(VAT PAYEE)
GMP
(NON VAT PAYEE)
FINAL
OTHER FINAL
FRINGE
BENEFITS
79
III. WITHHOLING TAX REMITTANCE
TYPES
COMPENSATION
FORM
1601-C
EXPANDED
1601-E
BANKS
1602
Real Property
(Ordinary Asset)
1606
MANUAL FILING/
PAYMENT
10th day of the ff
month except for the
month of December
which is due on the
Jan. 15
10th day of the ff
month
EFPS FILING
Staggered Filing
(RR 26-2002)
Not applicable
80
EFPS
PAYMENT
15th day of the ff
month except for
the month of
December which is
due on the Jan. 20
Not applicable
III. WITHHOLING TAX REMITTANCE
TYPES
FORM
MANUAL FILING/
PAYMENT
EFPS FILING
EFPS
PAYMENT
FINAL
OTHER FINAL
1601-F
10th day of the ff
month
Staggered Filing
(RR 26-2002)
15th day of the ff
month
W/TAX ON
VAT &
PERCENTAGE
1600
(ALPH
ALIST)
10th day of the ff
month
10th day of the ff
month
10th day of the ff
month
FRINGE
BENEFITS
1603
10th day of the month
following the end of
the qtr.
15th day of the
month ff the end
of the quarter
15th day of the
month ff the end of
the quarter
81
IV. WITHHOLDING TAX CERTIFICATES
TYPES
FORM
COMPENSATION
2316
EXPANDED
2304
(Exempt)
2307
(Taxable)
TIME
Jan 31 of the ff year
For terminated employees - last payment
of salary
20 days ff. close of the quarter
or upon demand
GOV’T. MONEY
PAYMENTS
2307
For Non-VAT : 10th day of the ff month
2306
For VAT
month
FINAL TAX
2306
Jan. 31 of the following year
FRINGE
BENEFITS
2306
Jan. 31 of the following year
82
: 10th day on the month ff
Answer:
I.
AIRLINE COMPANY
a. Expanded Withholding Tax
- form 2307
P6,353.00 x 2% = P 127.06
b. GMP
- form 2306
P6,353.00 x 5% = P 317.65
II. TRAVEL AGENCY
a. EWT (P448.00/112%) x 2% = P 8.00 – form 2307
b. GMP
i. If VAT Taxpayer (P448.00/112%) x 5% = P20.00 – form 2306
ii. If Non-VAT
(P448.00c 3%)
= P13.44 - form 2307
83
V. ANNUAL RETURNS
TYPE
COMPENSATION
FORM
1604 CF
DESCRIPTION
Alphalist of employees
TIME
Jan. 31 of
the ff year
Less than 10 employees – manual filing
10 employees or more - softcopy
eFPS Filer
- e-attach
EXPANDED
1604E
Alphalist of payees
Less than 10 payees
10 payees or more
eFPS Filer
84
– manual filing
- softcopy
- e-attach
March 1
of the ff
year
The End
85