G.
Remittance Of Final Income Taxes Withheld On Fringe Benefits Paid
To Employees Other Than Rank And File
Tax
Form
BIR
Form 1603 - Quarterly Remittance Return of Final Income Taxes
Withheld on Fringe Benefits Paid to Employees Other than Rank
and File
Who Are Required To File
Every withholding agent/payor who is either
an individual or non-individual required to deduct and withhold
taxes on fringe benefits furnished to employees other than rank
and file subject to Final Withholding Tax
Documentary Requirements
Return previously filed and proof of tax payments , if
amended return
Procedures
1. Fill-up BIR Form 1603 in triplicate copies.
2. If there is tax required to be remitted:
· Proceed to the nearest Authorized Agents Banks (AAB's)
of the Revenue District Office where you are required to register
and present the duly accomplished BIR Form 1603, together with
the required attachments and your payment.
· In places where there are no AAB's, proceed to the Revenue
Collection Officer or duly Authorized City or Municipal Treasurer
located within the Revenue District Office where you are required
to register and present the duly accomplished BIR Form 1603, together
with the required attachments and your payment.
· Receive your copy of the duly stamped and validated form
from the teller of the AAB's/Revenue Collection Officer/duly Authorized
City or Municipal Treasurer.
3. If there is no tax required to be remitted:
· Proceed to the Revenue District Office where you are
required to register and present the duly accomplished BIR Form
1603, together with the required attachments.
· Receive your copy of the duly stamped and validated form
from the RDO representative
Deadline
Filing Via EFPS
On or before the fifteenth (15th) day of the month following the
end of the calendar quarter in which the fringe benefits were
granted to the recipient.
Manual Filing
On or before the tenth (10th) day of the month following the end
of the calendar quarter in which the fringe benefits were granted
to the recipient.
Tax Rates
top of the
page
Annual Information
On Creditable Income Taxes Withheld (Expanded)/Income Payments
Exempt From Withholding Tax
Tax Form
BIR Form 1604 E - Annual Information
Return of Creditable Income Taxes Withheld (Expanded)/Income Payments
Exempt from Withholding Tax
Who Are Required To File
Every withholding agent/payor who is either
an individual or non-individual required to deduct and withhold
taxes on income payments subject to Expanded/Creditable Withholding
Taxes
Documentary Requirements
1. Alphalist of Payees subjected to Expanded Withholding
Tax
2. Alphalist of Other Payees Whose Income Payments Are Exempt
form Withholding Tax but subject to Income Tax
3. Return previously filed and proof of tax payment for amended
return
¨ Note: Above alpahalist are to be submitted in diskette format
when total number of payees exceed 10 (RR 3- 2002).
Procedures
1. Fill-up BIR Form 1604 E in triplicate
copies.
2. Proceed to the Revenue District Office where you are required
to register and present the duly accomplished BIR Form 1604 E,
together with the required attachments.
3. Receive your copy of the duly stamped and validated form from
the RDO representative
Deadline
On or before March 1 of the year following
the calendar year in which the income payments subjected to expanded
withholding taxes or exempt from withholding tax were paid.
top of the page
Annual Information On Income Taxes Withheld On Compensation And
Final Withholding Taxes
Tax Form
BIR Form 1604 CF - Annual Information Return
of Income Taxes Withheld on Compensation and Final Withholding
Taxes
Who Are Required To File
Every withholding agent/payor who is either
an individual or non-individual required to deduct and withhold
taxes on:
· compensation paid to employees
· income payments subject to Final Withholding Taxes
Documentary Requirements
1. Alphalist of Employees as of December 31 With no Previous
Employer within the year
2. Alphalist of Employees as of December 31 with Previous Employer
within the year
3. Alphalist of Employees Terminated Before December 31
4. Alphalist of Employees Whose Compensation Income Are Exempt
from Withholding Tax But Subject to Income Tax
5. Alphalist of Employees other than Rank and File Who Were Given
Fringe Benefits During the Year
6. Alphalist of Payees Subjected to Final Withholding Tax
7. Return previously filed and proof of tax payment for amended
return
Note: Above alpahalist are to be submitted in Diskette format
when total number of payees exceed 10 (RR 3-2002)
Procedures
1. Fill-up BIR Form 1604 CF in triplicate
copies.
2. Proceed to the Revenue District Office where you are required
to register and present the duly accomplished BIR Form 1604 CF,
together with the required attachments.
3. Receive your copy of the duly stamped and validated form from
the RDO representative.
Deadline
On or before January 31 of the year following
the calendar year in which the compensation payment and other
income payments subjected to final withholding taxes were paid
or accrued.
top of the page
Withholding
Tax Remittance For Onerous Transfer Of Real Property Other Than
Capital Asset (Including Taxable And Exempt)
Tax Form
BIR Form 1606 - Withholding Tax Remittance Return
(For Onerous Transfer of Real Property Other Than Capital Asset
Including Taxable and Exempt)
Who
Are Required To File
Every withholding agent/buyer on the sale,
transfer or exchange of real property classified as ordinary assets.
One return should be filed for every property (including portion
of a property) purchased
Documentary Requirements
1. A copy of Notarized Deed of Sale or Exchange
2. Photocopy of Transfer Certificate of Title (TCT) or Original
Certificate of Title (OCT) or Condominium Certificate of Title (CCT)
3. Certified True Copy of the latest Tax Declaration (lot and/or
improvement)
4. Copy of BIR Ruling for tax exemption confirmed by the BIR, if
applicable
5. Proof of Registration with HULRB or HUDCC, if applicable
6. Previously filed return and proof of payment, for amended return
Procedures
1. Fill-up BIR Form 1606 in triplicate copies.
2. If there is tax required to be remitted:
· Proceed to the nearest Authorized Agents Banks (AAB's)
of the Revenue District Office having jurisdiction over the place
where the property being transferred is located and present the
duly accomplished BIR Form 1606, together with the required attachments
and your payment.
· In places where there are no AAB's, proceed to the Revenue
Collection Officer or duly Authorized City or Municipal Treasurer
located within the Revenue District Office having jurisdiction over
the place where the property being transferred is located and present
the duly accomplished BIR Form 1606, together with the required
attachments and your payment.
· Receive your copy of the duly stamped and validated form
from the teller of the AAB's/Revenue Collection Officer/duly Authorized
City or Municipal Treasurer.
3. If there is no tax required to be remitted:
· Proceed to the Revenue District Office having jurisdiction
over the place where the property being transferred is located and
present the duly accomplished BIR Form 1606, together with the required
attachments.
· Receive your copy of the duly stamped and validated form
from the RDO representative.
Tax
Rates
top of the page
RELATED
REVENUE ISSUANCES
RR No. 2-98, RR No. 8-98, RR No. 12-98, RR
No. 3-99, RR No. 8-2000, RR No. 10-2000, RR No. 9-2001, RR No.
3-2002, RR No. 4-2002, RR No. 14-2002, RR No. 19-2002, RR No.
14-2003, RR No. 16-2003, RR No. 17-2003
top of the page
CODAL
REFERENCE
Sections 78 to 83 of the National
Internal Revenue Code
top of the
page
FREQUENTLY
ASKED QUESTIONS
1) What are the types of Withholding Taxes?
There are four types of withholding taxes, namely:
a. Withholding Tax on Compensation
b. Expanded Withholding Tax
c. Final Withholding Tax
d. Withholding Tax on Government Money Payments
- Withholding Tax on Vat
- Withholding Tax on Percentage Taxes
2) What is compensation?
It means any remuneration received for services
performed by an employee from his employer under an employee-employer
relationship.
3) What are the different kinds of compensation?
· Regular compensation - includes basic
salary, fixed allowances for representation, transportation and
others paid to an employee
· Supplemental compensation - includes payments to an employee
in addition to the regular compensation such as but not limited
to the following:
- Overtime Pay
- Fees, including director's fees
- Commission
- Profit Sharing
- Monetized Vacation and Sick Leave
- Fringe benefits received by rank & file employees
- Hazard Pay
- Taxable 13th month pay and other benefits
- Other remunerations received from an employee-employer
relationship
4) What are exempted from Withholding Tax on Compensation?
· Remuneration as an incident of employment
· Retirement benefits received under RA 7641
· Any amount received by an official or employee or by
his heirs from the employer due to death, sickness or other physical
disability or for any cause beyond the control of the said official
or employee such as retrenchment, redundancy or cessation of business
· Social security benefits, retirement gratuities, pensions
and other similar benefits
· Payment of benefits due or to become due to any person
residing in the Philippines under the law of the US administered
US Veterans Administration
· Payment of benefits made under the SSS Act of 1954, as
amended
· Benefits received from the GSIS Act of 1937, as amended,
and the retirement gratuity received by the government employee
· Remuneration paid for agricultural labor
· Remuneration for domestic services
· Remuneration for casual labor not in the course of an
employer's trade or business
· Compensation for services by a citizen or resident of
the Philippines for a foreign government or an international organization
· Payment for damages
· Proceeds of Life Insurance
· Amount received by the insured as a return of premium
· Compensation for injuries or sickness
· Income exempt under Treaty
· Thirteenth (13th) month pay and other benefits (not to
exceed P 30,000)
· GSIS, SSS, Medicare and other contributions
5) Who are not subject to Withholding Tax on Compensation?
Any employee whose total compensation income does
not exceed the statutory minimum wage of Five Thousand (P 5,000.00)
Pesos a month or Sixty Thousand (P 60,000.00) Pesos a year is
not subject to Withholding Tax on Compensation.
NOTE: Employee whose total annual compensation
does not exceed P 60,000 shall be given two options with which
to pay his income tax due as follows:
· His compensation income shall be subjected
to withholding tax, but he shall not be required to file the income
return prescribed in Section 51 of the Code (filing of an individual
return) except when covered by any of the situations enumerated
in Sec. 2.83.4 of Revenue Regulations No. 2-98, or
· His compensation income shall not be subject
to withholding tax but he shall file his annual income tax return
and pay the tax due thereon, annually.
When the employee has opted to have his compensation
income subjected to Withholding tax so as to be relieved of the
obligation of filing an annual Income Tax return and paying his
tax due on a lump sum basis, he shall execute a waiver in a prescribed
BIR Form of his exemption(s) from withholding, which shall constitute
the authority for the employers to apply the withholding tax table
provided under Revenue Regulations No. 2-98.
6) What income payments are subject to Expanded
Withholding Tax?
a) Professional fees / talent fees for services
rendered by the following:
· Those individually engaged in the practice of profession
or callings
· Professional entertainers such as but not limited to
actors and actresses, singers and emcees
· Professional athletes including basketball players, pelotaris
and jockeys
· Directors involved in movies, stage, radio, television
and musical directors
· Insurance agents and insurance adjusters
· Management and technical consultants
· Bookkeeping agents and agencies
· Other recipient of talent fees
· Fees of directors who are not employees of the company
paying such fees whose duties are confined to attendance art and
participation in the meetings of the Board of Directors
b) Professional fees, talent fees, etc for services of taxable
judicial persons
c) Rental of real property (in excess of P 10,000) used in business
d) Rental of personal properties in excess of P 10,000 annually
e) Rental of poles, satellites and transmission facilities
f) Rental of billboards
g) Cinematographic film rentals and other payments
h) Income payments to certain contractors
· General engineering contractors
· General building contractors
· Specialty contractors
· Other contractors like:
- Transportation contractors
- Filling, demolition and salvage work contractors and operators
of mine drilling apparatus
- Operators of dockyards
- Persons engaged in the installation of water system, and gas
or electric light, hear or power
- Operators of stevedoring, warehousing or forwarding establishments
- Printers, bookbinders, lithographers and publishers, except
those principally engaged in the publication or printing of any
newspaper, magazine, review or bulletin which appears at regular
intervals, with fixed prices for subscription and sale
- Advertising agencies, exclusive of payments to media
- Independent producers of television, radio and stage performances
or shows
- Independent producers of "jingles"
- Labor recruiting agencies
- Persons engaged in the installation of elevators, central air
conditioning units, computer machines and other equipment and
machineries and the maintenance services thereon
- Messengerial, janitorial, security, private detective and other
business agencies
- Persons engaged in landscaping services
- Persons engaged in the collection and disposal of garbage
- TV and radio station operators on sale of TV and radio airtime,
and
- TV and radio blocktimers on sale of TV and radio commercial
spots
- Persons engaged in the sale of computer services, computer programmers,
software developer/designer, etc.
i) Income distribution to the beneficiaries of estates and trusts
j) Gross commission or service fees of customs, insurance, stock,
real estate, immigration and commercial brokers and fees of agents
of professional entertainers
k) Commission, rebates, discounts and other similar considerations
paid/granted to independent and exclusive distributors, medical/technical
and sales representatives and marketing agents and sub-agents
of multi level marketing companies
l) Income payments to partners of general professional partnerships
m) Payments made to medical practitioners through a duly registered
professional partnership
n) Payments for medical/dental/veterinary services thru hospitals/clinics/health
maintenance organizations, including direct payments to service
providers
o) Gross selling price or total amount of consideration or its
equivalent paid to the seller/owner for the sale, exchange or
transfer of real property
p) Additional income payments to government personnel from importers,
shipping and airline companies or their agents
q) Certain income payments made by credit card companies
r) Income payments made by the top 10,000 private corporations
to their purchase of goods and services from their local/resident
suppliers other than those covered by other rates of withholding
s) Income payments by government offices on their purchase of
goods and services, from local/resident suppliers
t) Tolling fees paid to refineries
u) Payments made by pre-need companies to funeral parlors
v) Payments made to embalmers by funeral parlors
w) Income payments made to suppliers of agricultural products
x) Income payments on purchases of mineral, mineral products and
quarry resources
7) What income payments are subject to Final Withholding
Tax?
a) Income Payments to a Citizen or to a Resident
Alien Individual:
· Interest on any peso bank deposit
· Royalties
· Prizes (except prizes amounting to P10,000 or less which
is subject to tax under Sec. 25(A)(1) of the Tax Code
· Winnings (except from Philippine Charity Sweepstake Office
and Lotto)
· Interest income on foreign currency deposit
· Interest income from long term deposit
· Cash and/or property dividends
· Capital Gains presumed to have been realized from the
sale, exchange or other disposition of real property
b) Income Payments to a Non-Resident Alien Engaged in Trade or
Business in the Philippines
· On Certain Passive Income
- cash and/or property dividend
- Share in the distributable net income of a partnership
- Interest on any bank deposits
- Royalties
- Prizes (except prizes amounting to P10,000 or less which is
subject to tax under Sec. 25(A)(1) of the Tax Code.
- Winnings (except from Philippine Charity Sweepstake Office and
Lotto)
· Interest on Long Term Deposits
· Capital Gains presumed to have been realized from the
sale, exchange or other disposition of real property
c) Income Derived from All Sources Within the Philippines by a
Non-Resident Alien Individual Not Engaged in Trade or Business
· On gross amount of income derived from all sources within
the Philippines
· On Capital Gains presumed to have been realized from
the sale, exchange or disposition of real property located in
the Philippines
d) Income Derived by Alien Individual Employed by a Regional or
Area Headquarters and Regional Operating Headquarters of Multinational
Companies
e) Income Derived by Alien Individual Employed by Offshore Banking
Units
f) Income of Aliens Employed by Foreign Petroleum Service Contractors
and Subcontractors
g) Income Payment to a Domestic Corporation
· Interest from any currency bank deposits and yield or
any other monetary benefit from deposit substitutes and from trust
fund and similar arrangements derived from sources within the
Philippines
· Royalties derived from sources within the Philippines
· Interest income derived from a depository bank under
the Expanded Foreign Currency Deposit (FCDU) System
· Income derived by a depository bank under the FCDU from
foreign transactions with local commercial banks
· On capital gains presumed to have been realized from
the sale, exchange or other disposition of real property located
in the Philippines classified as capital assets, including pacto
de retro sales and other forms of conditional sales based on the
gross selling price or fair market value as determined in accordance
with Sec. 6(E) of the NIRC, whichever is higher
h) Income Payments to a Resident Foreign Corporation
· Offshore Banking Units
· Tax on branch Profit Remittances
· Interest on any currency bank deposits and yield or any
other monetary benefit from deposit substitute and from trust
funds and similar arrangements and royalties derived from sources
within the Philippines
· Interest income on FCDU
· Income derived by a depository bank under the expanded
foreign currency deposits system from foreign currency transactions
with local commercial banks
i) Income Derived from all Sources Within the Philippines by a
Non-Resident Foreign Corporation
· Gross income from all sources within the Philippines
such as interest, dividends, rents, royalties, salaries, premiums
(except re-insurance premiums), annuities, emoluments or other
fixed determinable annual, periodic or casual gains, profits and
income or capital gains;
· Gross income from all sources within the Philippines
derived by a non-resident cinematographic film owner, lessor and
distributor
· On the gross rentals, lease and charter fees derived
by a non-resident owner or lessor of vessels from leases or charters
to Filipino citizens or corporations as approved by the Maritime
Industry Authority
· On the gross rentals, charter and other fees derived
by a non-resident lessor of aircraft, machineries and other equipment
· Interest on foreign loans contracted on or after August
1, 1986
j) Fringe Benefits Granted to the Employee (except Rank and File)
· Goods, services or other benefits furnished or granted
in cash or in kind by an employer to an individual employee (except
rank and file) such as but not limited to the following:
- Housing
- Vehicle of any kind
- Interest on loans
- Expenses for foreign travel
- Holiday and vacation expenses
- Educational assistance to employees or his dependents
- Membership fees, dues and other expense in social and athletic
clubs or other
- similar organizations
- Health insurance
- Informers Reward
8) What are the types of withholding tax on government
money payments?
a) Withholding of Creditable Value Added Tax
· On gross payments for the purchase of goods
· On gross payments for the purchase of services
· Payments made to government public works contractors
· Payments for lease or use of property or property rights
to non-resident owners
b) Withholding of Percentage Tax
Ø Payments to the following:
· Any person engaged in business whose gross sales or receipts
do not exceed P 550,000 and who are not VAT-registered persons.
(Persons exempt from VAT under Sec. 109z of the Tax Code)
· Domestic carriers and keepers of garages, except owners
of bancas and owners of animal drawn two wheeled vehicle
· Operators of international carriers doing business in
the Philippines.
· Franchise grantees of electric, gas or water utilities
· Franchise grantees of radio and/or television broadcasting
companies whose gross annual receipts of the preceding year do
not exceed Ten Million (P10,000,000.00) Pesos and did not opt
to register as VAT Taxpayers
· Banks and non-bank financial intermediaries and finance
companies
· Life insurance companies
· Agents of foreign insurance companies
· Proprietor, lessee, or operator of cockpits, cabarets,
night or day clubs, boxing exhibitions, professional basketball
games, jai-alai and race tracks
· Every stock broker who effected a sale, barter, exchange
or other disposition of shares of stock listed and traded through
the Local Stock Exchange (LSE) other than the sale by a dealer
in securities
· A corporate issuer/stock broker, whether domestic of
foreign, engaged in the sale, barter, exchange or other disposition
through Initial Public Offering (IPO) /secondary public offering
of shares of stock in closely held corporations
9) Who is a withholding agent?
A withholding agent is any person or entity who
is required to deduct and remit the taxes withheld to the government.
10) What are the duties and obligations of the
withholding agent?
The following are the duties and obligations of
the withholding agent:
a) To Register - withholding agent is required to register within
ten (10) days after acquiring such status with the Revenue District
office having jurisdiction where the business is located
b) To Deduct and Withhold - withholding agent is required to deduct
tax from all money payments subject to withholding tax
c) To Remit the Tax Withheld - withholding agent is required to
remit tax withheld at the time prescribed by law and regulations
d) To File Annual Return - withholding agent is required to file
the corresponding Annual Information Return at the time prescribed
by law and regulations
e) To Issue Withholding Tax Certificates - withholding agent shall
furnish Withholding Tax Certificates to recipient of income payments
subject to withholding
11) Who are required to file Withholding Tax returns?
a) For BIR Form 1600 - Monthly Remittance of Value-Added
Tax and Other Percentage Tax
- All government offices, bureaus, agencies or instrumentalities,
local government units, government owned and controlled corporation
on money payments made to private individual, corporations, partnerships,
association and other judicial/artificial entities required under
RA Nos. 1051, 7649, 8241 and 8424
- Payors to non-residents receiving income subject to Value-Added
Tax
b) For BIR Form 1600WP - Remittance Return of Percentage Tax on
Winnings and Prizes Withheld by Racetrack Operators
- Operators of race tracks
c) For BIR Form 1601C- Monthly Remittance Return of Income Tax
Withheld on Compensation
- Every withholding agent/payor who is either an individual or
non-individual required to deduct and withhold taxes on compensation
paid to employees
d) For BIR Form 1601E - Monthly Remittance Return of Creditable
Income Taxes Withheld (Expanded)
- Every withholding agent/payor who is either an individual or
non-individual required to deduct and withhold taxes on income
payments subject to Expanded/Creditable Withholding Taxes
e) For BIR Form 1601 F - Monthly Return of Final Income Taxes
Withheld
- Every withholding agent/payor who is either an individual or
non-individual required to deduct and withhold taxes on income
payments subject to Final Withholding Taxes
f) For BIR Form 1602 -Monthly Remittance Return of Final Income
Taxes Withheld (On Interest Paid on Deposits and Yield on Deposit
Substitutes/Trusts/Etc.)
- Banks, non-bank financial intermediaries, finance corporations,
investment and trust companies and similar institutions
g) For BIR Form 1603 - Quarterly Remittance Return of Final Income
Taxes Withheld (On Fringe Benefits Paid to Employees Other than
Rank and File)
- Every withholding agent/payor who is either an individual or
non-individual required to deduct and withhold taxes on fringe
benefits furnished to employees other than rank and file subject
to Final Withholding Tax
h) For BIR Form 1604CF - Annual Information Return of Income Taxes
Withheld on Compensation and Final Withholding Tax
- Every withholding agent/payor who is either an individual or
non-individual required to deduct and withhold taxes on compensation
paid to employees
- Every withholding agent/payor who is either an individual or
non-individual required to deduct and withhold taxes on income
payments subject to Final Withholding Taxes
i) For BIR Form 1604E - Annual Information Return of Creditable
Income Taxes Withheld (Expanded) Income Payments Exempt from Withholding
Tax
- Every withholding agent/payor who is either an individual or
non-individual required to deduct and withhold taxes on income
payments subject to Expanded/Creditable Withholding Taxes
j) For BIR Form 1606 - Withholding Tax Remittance Return (For
Onerous Transfer of Real Property Other than Capital Assets (Including
Taxable and Exempt)
- Every withholding agent/buyer on the sale, transfer or exchange
of real property classified as ordinary assets. One return should
be filed for every property (including portion of a property)
purchased.
top of the page
