- Codal Reference And Related Issuances
- Importance Of Withholding Tax System
- Persons Required To Withhold Withholding Taxes
- Classification Of Withholding Taxes
- Withholding Tax On Compensation
- Responsibilities Of The Employer
- Exemptions And Exclusions From Gross Income
- Minimum Wage Earners
- De Minimis Benefits Not Subject To Withholding Tax
- Withholding Tax Table
- Annual Tax Table
- Year-End-Adjustment
- Withholding Tax Forms
- Mode Of Filing And Payment
- Substituted Filing
- Expanded Withholding Tax
- Final Withholding Tax
- Fringe Benefits Granted To Employees (Except Rank And File Employees)
- Withholding Tax On Government Money Payments (Gmp) - Percentage Taxes
CODAL REFERENCE AND RELATED ISSUANCES
Republic Act Nos. 8424, 9337, 9442, 9504, 10963
Sections 57 to 58 and 78 to 83 of the National Internal Revenue Code (NIRC)
Revenue Regulation Nos. 2-98, 17-2003, 30-2003, 10-2008, 11-2018
Revenue Memorandum Circular Nos. 72-2004, 91-2010, 50-2018, 51-2018
IMPORTANCE OF WITHHOLDING TAX SYSTEM
It is considered as an effective tool in the collection of taxes for the following reasons:
- It encourages voluntary compliance;
- It reduces cost of collection effort;
- It prevents delinquencies and revenue loss; and
- It prevents dry spell in the fiscal conditions of the government by providing revenues throughout the taxable year.
PERSONS REQUIRED TO WITHHOLD WITHHOLDING TAXES
- Individuals engaged in business or practiced of profession
- Non-individuals (corporations, associations, partnertship, cooperatives) whether engaged in business or not
- Government agencies and its instrumentalities (National Government Agentcies (NGAs), Government-owned or Controlled Corporations (GOCCs), Local Government Units including Baranggays (LGUs
A WITHHOLDING AGENT - is any person or entity who is in control of the payment subject to withholding tax and therefore is required to deduct and remit taxes withheld to the government.
CLASSIFICATION OF WITHHOLDING TAXES
- Creditable withholding tax
- Compensation - is the tax withheld from income payments to individuals arising from an employer-employee relationship.
- Expanded - is a kind of withholding tax which is prescribed on certain income payments and is creditable against the income tax due of the payee for the taxable quarter/year in which the particular income was earned.
- Withholding Tax on GMP - Value Added Taxes (GVAT) - is the tax withheld by National Government Agencies (NGAs) and instrumentalities, including government-owned and controlled corporations (GOCCs) and local government units (LGUs), before making any payments to VAT registered taxpayers/suppliers/payees on account of their purchases of goods and services.
- Withholding Tax on Government Money Payments (GMP) - Percentage Taxes - is the tax withheld by National Government Agencies (NGAs) and instrumentalities, including government-owned and controlled corporations (GOCCs) and local government units (LGUs), before making any payments to non-VAT registered taxpayers/suppliers/payees
- Final Withholding Tax is a kind of withholding tax which is prescribed on certain income payments and is not creditable against the income tax due of the payee on other income subject to regular rates of tax for the taxable year. Income Tax withheld constitutes the full and final payment of the Income Tax due from the payee on the particular income subjected to final withholding tax.
WITHHOLDING TAX ON COMPENSATION
Compensation or Wages - refers to all remuneration for services performed by an employee for his employer under an employee-employer relationships unless exempted by the NIRC and pertinent laws.
KINDS OF COMPENSATION
- Regular
- Basic Salary
- Fixed allowances
- Supplmentary
- Commission
- Overtime pay
- Fees, including directors fees
- Profit sharing
- Monetized vacation leave in excess of ten (10) days
- Sick leave
- Fringe benefits received by rank and file employees
- Hazard pay
- Taxable 13th month pay and other benefits
- Other remuneration received from an employee-employer relationships
RESPONSIBILITIES OF THE EMPLOYER
- Submit the duly accomplished BIR Form Nos. 1902 and/or 1905 to the RDO within thirty (30) days from receipt;
- Withhold the tax due from the employees following the prescribed manner;
- Remit the amount of tax withheld from the employee within the prescribed due dates;
- Do the year-end adjustment;
- Submit Annual Information return (BIR Form 1604-C, 1604-F and 1604-E), including the required alphabetical list of employees/payees on or before January 31 following the close of the calendar year;
- Issue the Certificate of Compensation Payment/Tax Withheld (BIR Form No. 2316) to the employees; and
- Refund excess tax withheld.
EXEMPTIONS AND EXCLUSIONS FROM GROSS INCOME
- Remuneration received as an incident of employment (RA 7641; those with approved reasonable private retirement plan; Social Security Act of 1954, as amended; GSIS Act of 1937, as amended; and etc.
- 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 a resident of the Philippines for a foreign government or international organization;
- Damages (Actual, moral, exemplary and nominal);
- Life insurance;
- Amounts received by the insured as a return of premium;
- Compensation for injuries or sickness;
- Income exempt under treaty
- 13th Month pay and other benefits
- GSIS, SSS, Medicare and other contributions (employee's share only)
- Compensation income of minimum wage earners (MWEs) who work in the private sector and being paid the Statutory Minimum Wage (SMW), as fixed by the Regional Tripartite Wage and Productivity Board (RTWPB)/National Wages Productivity Commission (NWPC), applicable to the place where he/she is assigned;
- Compensation income of employees in the public sector with compensation income of not more the the SMW in the non-agricultural sector as fixed by the RTWPB?NWPC applicable to the place where he/she is assigned.
- De Minimis benefits
- Fringe benefits given to employees other than rank and file and subjected to Fringe Benefit Tax (FBT);
- Personnel Economic Relief Allowance (PERA) given to government employees; and Representation and transportation allowance (RATA granted to public officers and employees under the General Appropriations Act.
No withholding tax shall be required on the Statutory Minimum Wage (SMW) of the Minimum Wage earner in the private/public sectors as defined in RR 2-98, as amended by RR 11-2018, including:
- Holiday pay
- Overtime pay
- Night shift differential
- Hazard pay
of Minimum Wage earners in the private/public sectors as defined by these Regulations.
DE MINIMIS BENEFITS NOT SUBJECT TO WITHHOLDING TAX
- Monetized unused vacation leave credits to employees not exceeding ten (10) days during the year;
- Monetized value of vacation and sick leave credits paid to government officials and employees;
- Medical cash allowance to dependents of employees, not exceeding ₱ 1,500.00 per employee per semester of ₱ 250.00 per month;
- Rice subsidy of ₱ 2,000.00 or one sack of 50kg rice per month amounting to not more than ₱ 2,000.00;
- Uniform and clothing allowance not exceeding ₱ 6,000.00 per annum;
- Actual medical assistance, e.g. medical allowance to cover medical and healthcare needs, annual medical/executive check-up, maternity assistance, and routine consultations, not exceeding ₱ 10,000.00 per annum;
- Laundry allowance not exceeding ₱ 300.00 per month;
- Employees achievement awards, e.g. for length of service or safety achievement, which in the form of a tangible personal property other than cash or gift certificate, with an annual monetary value not exceeding ₱10,000.00 received by the employee under an established written plan which does not discriminate in favor of highly paid employees;
- Gifts given during Christmas and major anniversary celebrations not exceeding ₱5,000.00 per employee per annum;
- Daily meal allowance for overtime work not exceeding twenty five percent (25%) of the basic minimum wage;
- Benefits received by an employee by virtue of a collective bargaining agreement (CBA) and productivity incentive schemes provided that the total annual monetary value received from both CBA and productivity incentive schemes combined do not exceed ten thousand pesos (Php 10,000.00)per employee per taxable year;
REVISED WITHHOLDING TAX TABLE
|
||||||
Effective January 1, 2018 to December 31, 2022
|
||||||
DAILY |
1
|
2
|
3
|
4
|
5
|
6
|
Compensation Range |
₱685 and below
|
₱685 - ₱1,095
|
₱1,096 - ₱2,191
|
₱2,192 - ₱5,478
|
₱5,479 - ₱21,917
|
₱21,918 and above
|
Prescribed Withholding Tax |
0.00
|
0.00 +20% over ₱685
|
₱82.19 +25% over ₱1,096
|
₱356.16 +30% over ₱2,192
|
₱1,342.47 +32% over ₱5,479
|
₱6,602.74 +35% over ₱21,918
|
WEEKLY |
1
|
2
|
3
|
4
|
5
|
6
|
Compensation Range |
₱4,808 and below
|
₱4,808 - ₱7,691
|
₱7,692 - ₱15,384
|
₱15,385 - ₱38,461
|
₱38,462 - ₱153,845
|
₱153,846 and above
|
Prescribed Withholding Tax |
0.00
|
0.00 +20% over ₱4,808
|
₱576.92 +25% over ₱7,692
|
₱2,500.00 +30% over ₱15,385
|
₱9,423.08 +32% over ₱38,462
|
₱46,346.15 +35% over ₱153,846
|
SEMI-MONTHLY |
1
|
2
|
3
|
4
|
5
|
6
|
Compensation Range |
₱10,417 and below
|
₱10,417 - ₱16,666
|
₱16,667 - ₱33,332
|
₱33,333 - ₱83,332
|
₱83,333 - ₱333,332
|
₱333,333 and above
|
Prescribed Withholding Tax |
0.00
|
0.00 +20% over ₱10,417
|
₱1,250.00 +25% over ₱16,667
|
₱5,416.67 +30% over ₱33,333
|
₱20,416.67 +32% over ₱83,333
|
₱100,416.67 +35% over ₱333,333
|
MONTHLY |
1
|
2
|
3
|
4
|
5
|
6
|
Compensation Range |
₱20,833 and below
|
₱20,833 - ₱33,332
|
₱33,333 - ₱66,666
|
₱66,667 - ₱166,666
|
₱166,667 - ₱666,666
|
₱666,667 and above
|
Prescribed Withholding Tax |
0.00
|
0.00 +20% over ₱20,833
|
₱2,500.00 +25% over ₱33,333
|
₱10,833.33 +30% over ₱66,667
|
₱40,833.33 +32% over ₱166,667
|
₱200,833.33 +35% over ₱666,667
|
REVISED WITHHOLDING TAX TABLE
|
||||||
Effective January 1, 2023 and onwards
|
||||||
DAILY |
1
|
2
|
3
|
4
|
5
|
6
|
Compensation Range |
₱685 and below
|
₱685 -₱1,095
|
₱1,096 - ₱2,191
|
₱2,192 - ₱5,478
|
₱5,479 - ₱21,917
|
₱21,918 and above
|
Prescribed Withholding Tax |
0.00
|
0.00 +15% over ₱685
|
₱61.65 +20% over ₱1,096
|
₱280.85 +25% over ₱2,192
|
₱1,102.60 +30% over ₱5,479
|
₱6,034.30 +35% over ₱21,918
|
WEEKLY |
1
|
2
|
3
|
4
|
5
|
6
|
Compensation Range |
₱4,808 and below
|
₱4,808 - ₱7,691
|
₱7,692 - ₱15,384
|
₱15,385 - ₱38,461
|
₱38,462 - ₱153,845
|
₱153,846 and above
|
Prescribed Withholding Tax |
0.00
|
0.00 +15% over ₱4,808
|
₱432.60 +20% over ₱7,692
|
₱1,971.20 +25% over ₱15,385
|
₱7,740.45 +30% over ₱38,462
|
₱42,355.65 +35% over ₱153,846
|
SEMI-MONTHLY |
1
|
2
|
3
|
4
|
5
|
6
|
Compensation Range |
₱10,417 and below
|
₱10,417 - ₱16,666
|
₱16,667 - ₱33,332
|
₱33,333 - ₱83,332
|
₱83,333 - ₱333,332
|
₱333,333 and above
|
Prescribed Withholding Tax |
0.00
|
0.00 +15% over ₱10,417
|
₱937.50 +20% over ₱16,667
|
₱4,270.70 +25% over ₱33,333
|
₱16,770.70 +30% over ₱83,333
|
₱91,770.70 +35% over ₱333,333
|
MONTHLY |
1
|
2
|
3
|
4
|
5
|
6
|
Compensation Range |
₱20,833 and below
|
₱20,833 - ₱33,332
|
₱33,333 - ₱66,666
|
₱66,667 - ₱166,666
|
₱166,667 - ₱666,666
|
₱666,667 and above
|
Prescribed Withholding Tax |
0.00
|
0.00 +15% over ₱20,833
|
₱1,875.00 +20% over ₱33,333
|
₱8,541.80 +25% over ₱66,667
|
₱33,541.80 +30% over ₱166,667
|
₱183,541.80 +35% over ₱666,667
|
EFFECTIVE DATE JANUARY 1, 2018 to DECEMBER 31, 2022
|
|
Not over ₱ 250,000.00 | 0% |
Over ₱ 250,000.00 but not over ₱ 400,000.00 | 20% of the excess over ₱ 250,000.00 |
Over ₱ 400,000.00 but not over ₱ 800,000.00 | ₱ 30,000.00 + 25% of the excess over ₱ 400,000.00 |
Over ₱ 800,000.00 but not over ₱ 2,000,000.00 | ₱ 130,000.00 + 30% of the excess over ₱ 800,000.00 |
Over ₱ 2,000,000.00 but not over ₱ 8,000,000.00 | ₱ 490,000.00 + 32% of the excess over ₱ 2,000,000.00 |
Over ₱ 8,000,000.00 | ₱ 2,410,000.00 + 35% of the excess over ₱ 8,000,000.00 |
EFFECTIVE DATE JANUARY 1, 2023
|
|
Not over ₱ 250,000.00 | 0% |
Over ₱ 250,000.00 but not over ₱ 400,000.00 | 15% of the excess over ₱ 250,000.00 |
Over ₱ 400,000.00 but not over ₱ 800,000.00 | ₱ 22,500.00 + 20% of the excess over ₱ 400,000.00 |
Over ₱ 800,000.00 but not over ₱ 2,000,000.00 | ₱ 102,500.00 + 25% of the excess over ₱ 800,000.00 |
Over ₱ 2,000,000.00 but not over ₱ 8,000,000.00 | ₱ 402,500.00 + 30% of the excess over ₱ 2,000,000.00 |
Over ₱ 8,000,000.00 | ₱ 2,202,500.00 + 35% of the excess over ₱ 8,000,000.00 |
On or before the calendar year and prior to the payment of the compensation for last payroll period, the employer shall determine the sum of the taxable regular and supplementary compensation paid to each employee for the whole year and must ensure that the tax due is equal to tax withheld.
ANNUALIZED WITHHOLDING TAX FORMULA
Gross Compensation Income (present + previous employer) ₱ x x x x
Less: Non-Taxable/Exempt Compensation Income
- 13th month pay and other benefits ₱ 90,000.00
- SSS, GSIS, PHIC, HDMF and union dues (employee share) x x x x x x
- Other Non-Taxable salaries (₱ 250,000.00) x x x x x x x x x x
Taxable Compensation Income ₱ x x x x
Tax Due ₱ x x x x
Less: Tax Withheld (January to November/termination date) ₱ x x x x
Tax to be withheld for December/last payroll period ₱ x x x x
Collectible : Tax Due> tax withheld - collect before payment of last salary
Refund: Tax Due< tax withheld - refund on or before January 25th of the year/ last payment of salary
Break even: Tax due = tax withheld - no more withholding for December salary
WITHHOLDING TAX FORMS
|
DESCRIPTION
|
REGISTRATION FORM
|
|
BIR FORM NO. 1901 | Application for Registration for Self-Employed and Mixed Income Individuals, Estates and Trusts |
BIR FORM NO. 1902 | Application for Registration for Individuals Earning Purely Compensation Income and Non-Residnet Citizens/Resident Alien Employee |
BIR FORM NO. 1903 | Application for Registration for Corporations/Partnerships (Taxable/Non-Taxable), including GAIs and LGUs |
BIR FORM NO. 1904 | Application for Registration for One-time Taxpayer and Persons Registering under E.O. 98 (Securing a TIN to be able to transact with any government office) |
BIR FORM NO. 1905 | Application for Information Update |
PAYMENT FORM
|
|
BIR FORM NO. 0605 | Payment form |
BIR FORM NO. 0619-E | Monthly Remittance Form of Creditable Income Taxes Withheld (Expanded) |
BIR FORM NO. 0619-F | Monthly Remittance Form of Final Income Taxes Withheld |
REMITTANCE FORM
|
|
BIR FORM NO. 1600-VT | Monthly Remittance Return of Value-Added Tax |
BIR FORM No. 1600-PT | Monthly Remittance Return of Percentage Tax |
BIR FORM NO. 1600WP | Remittance Return of Percentage Tax on Winnings and Prizes Withheld by Race Track Operators |
BIR FORM NO. 1601-C | Monthly Remittance Return of Income Taxes Withheld on Comnpensation |
BIR FORM NO. 1601-EQ | Quarterly Remittance Return of Creditable Income Taxes withheld (Expanded) |
BIR FORM NO. 1601-FQ
|
Quarterly Remittance Return of Final Income Taxes Withheld
|
BIR FORM NO. 1602-Q | Quarterly Remittance Return of Final Taxes Withheld on Interest Paid on Deposits and Deposits Substitutes/Trusts/Etc. |
BIR FORM NO. 1603-Q | Quarterly Remittance Return of Final Income Taxes Withheld on Fringe benefits Paid to Employees Other Than Rank and File |
CERTIFICATES
|
|
BIR FORM NO. 2304 | Certificate of Income Payment Not Subject to Withholding Tax (Excluding Compensation Income) |
BIR FORM NO. 2306 | Certificate of Final Tax Withheld at Source |
BIR FORM NO. 2307 | Certificate of Creditable Tax Withheld at Source |
BIR FORM NO. 2316 | Certificate of Compensation Payment/Tax Withheld |
WITHHOLDING TAX FORMS
|
DUE DATE
|
|
eFPS
|
Manual/EBIRForms
|
|
PAYMENT FORM | ||
BIR FORM NO. 0605 | ||
BIR FORM NO. 0619-E
|
Filing - see Schedule in RR 26-2002
Payment - on or before the fiftenth (15th) day of the following month |
on or before the tenth (10th) day following the close of the month
|
BIR FORM NO. 0619-F
|
||
REMITTANCE FORM | ||
BIR FORM NO. 1600-VT |
on or before the tenth (10th) day following the close of the month
|
on or before the tenth (10th) day following the close of the month
|
BIR FORM NO. 1600-PT | ||
BIR FORM NO. 1600WP | ||
BIR FORM NO. 1601-C
|
Filing - see Schedule in RR 26-2002
Payment - on or before the fiftenth (15th) day of the following month
|
|
BIR FORM NO. 1601-EQ | last day of the month following the close of the quarter | last day of the month following the close of the quarter |
BIR FORM NO. 1601-FQ | ||
BIR FORM NO. 1602-Q | ||
BIR FORM NO. 1603-Q |
SCHEDULE OF STAGGERED FILING
Filing via eFPS |
Group A - Fifteen (15) days following the end of the month |
Group B - Fourteen (14) days following the end of the month |
Group C - Thirteen (13) days following the end of the month |
Group D - Twelve (12) days following the end of the month |
Group E - Eleven (11) days following the end of the month |
Note: The staggered manner of filing is only allowed to taxpayers using the Electronic Filing and Payment System (EFPS) based on the industry classification groupings per RR No. 26-2002.
However, the staggered filing of returns allowed for withholding agents/taxpayers enrolled in the EFPS facility of the Bureau shall not apply in the case of the NGAs per RR 1-2013.
An individual taxpayer will no longer have to personally file his own Income Tax Return (BIR Form 1700) but instead the employer's Annual Information Return on Income Taxes Withheld (BIR Form No. 1604-C) filed will be considered as the "substitute" ITR of the employee.
REQUISITES FOR INDIVIDUALS QUALIFIED FOR SUBSTITUTED FILING OF BIR FORM NO. 1700
- Receives purely compensation income regardless of amount;
- Compensation from only one employer in the Philippines for the calendar year;
- Income tax has been withheld correctly by the employer (tax due equals tax withheld);
- the employee's spouse also complies with all the three conditions stated above;
- Employer files the BIR Form No. 1604-C; and
- The employer issues each employee BIR Form No. 2316 (latest version)
NOTE:
All the above requisites must be present. The annual Information Return of Income Taxes Withheld on Compensation (BIR Form No. 1604-C) filed by their respective employers filed their respective employers duly submitted to the eSubmission facility of the BIR.
REQUISITES FOR INDIVIDUALS NOT QUALIFIED FOR SUBSTITUTED FILING OF BIR FORM NO. 1700
- Individuals with two or more employers concurrently and/or successively at anytime during the taxable year.
- Employees whose income tax have not been withheld correctly resulting to collectible or refundable return.
- Individuals deriving other non-business, non-profession-related income in addition to compensation income not otherwise subject to final tax.
- Individuals receiving purely compensation income from a single employer whose income tax has been correctly withheld but whose spouse does not qualify tor substituted filing.
- Non-resident aliens engaged in trade or business in the Philippines deriving purely compensation income or compensation income and other non-related business, non-profession-related income.
SUBMISSION OF BIR FORM NO. 2316
The employer are required to submit the duplicate original copy of BIR Form No. 2316 to the Revenue District Office where they are registered on or before February 28
For Large Taxpayer or other Non-LT Taxpayers who opted to submit thru the Digital Versatile Disk (DVD) prescribed under RR2-2015 shall use Universal Storage BUS (USB) memory stick or other similar storage devices may be used in the absence or unavailability of the DVD's provided that the scanned copies of the said forms shall be made uneditable format.
For Large Taxpayer or Non-LT taxpayers shall use the prescribed format (Annex F) in RR 11-2018 for the preparation of the Certified List of Employees Qualified for Substituted Filing of ITR.
EXPANDED WITHHOLDING TAX
The Withholding of Creditable Tax at Source or simply called Expanded Withholding Tax is a tax imposed and prescribed on the items of income payable to natural or juridical persons, residing in the Philippines, by a payor-corporation/person which shall be credited against the income tax liability of the taxpayer for the taxable year.
Tax Rates
TAX TYPE
|
DESCRIPTION
|
TAX RATE
|
ATC
|
|
IND
|
CORP
|
|||
WE
|
Professional fees (Lawyers, CPA's, Engineers, etc.) |
|
|
|
|
- if the gross income for the current year did not exceed ₱ 3M |
5%
|
WI010
|
|
|
- if gross income is more than ₱ 3M or VAT registered regardlessof amount |
10%
|
WI011
|
|
WE
|
Professional fees (Lawyers, CPA's, Engineers, etc.) |
|
|
|
|
- if gross income for the current year did not exceed ₱ 720,000.00 |
10%
|
|
WC010
|
|
- if gross income exceeds ₱ 720,000.00 |
15%
|
|
WC011
|
WE
|
Professional entertainer such as, but not limited to actors and actresses, singers, lyricist, composers, emcees |
|
|
|
|
- if the gross income for the current year did not exceed ₱ 3M |
5%
|
WI020
|
|
|
- if gross income is more than ₱ 3M or VAT registered regardless of amount |
10%
|
WI021
|
|
WE
|
Professional entertainer such as, but not limited to actors and actresses, singers, lyricist, composers, emcees |
|
|
|
|
- if gross income for the current year did not exceed ₱ 720,000.00 |
10%
|
|
WC020
|
|
- if gross income exceeds ₱ 720,000.00 |
15%
|
|
WC021
|
WE
|
Professional athletes including basketball players, pelotaris and jockeys |
|
|
|
|
- if the gross income for the current year did not exceed ₱ 3M |
5%
|
WI030
|
|
|
- if gross income is more than ₱ 3M or VAT registered regardless of amount |
10%
|
WI031
|
|
WE
|
Professional athletes including basketball players, pelotaris and jockeys |
|
|
|
|
- if gross income for the current year did not exceed ₱ 720,000.00 |
10%
|
|
WC030
|
|
- if gross income exceeds ₱ 720,000.00 |
15%
|
|
WC031
|
WE
|
All directors and producers involved in movies, stage, television and musical productions |
|
|
|
|
- if the gross income for the current year did not exceed ₱ 3M |
5%
|
WI040
|
|
|
- if gross income is more than ₱ 3M or VAT registered regardless of amount |
10%
|
WI041
|
|
WE
|
All directors and producers involved in movies, stage, television and musical productions |
|
|
|
|
- if gross income for the current year did not exceed ₱ 720,000.00 |
10%
|
|
WC040
|
|
- if gross income exceeds ₱ 720,000.00 |
15%
|
|
WC041
|
WE
|
Management and technical consultants |
|
|
|
|
- if the gross income for the current year did not exceed ₱ 3M |
5%
|
WI050
|
|
|
- if gross income is more than ₱ 3M or VAT registered regardless of amount |
10%
|
WI051
|
|
WE
|
Management and technical consultants |
|
|
|
|
- if gross income for the current year did not exceed ₱ 720,000.00 |
10%
|
|
WC050
|
|
- if gross income exceeds ₱ 720,000.00 |
15%
|
|
WC051
|
WE
|
Business and Bookkeeping agents and agencies |
|
|
|
|
- if the gross income for the current year did not exceed ₱ 3M |
5%
|
WI060
|
|
|
- if gross income is more than ₱ 3M or VAT registered regardless of amount |
10%
|
WI061
|
|
WE
|
Business and Bookkeeping agents and agencies |
|
|
|
|
- if gross income for the current year did not exceed ₱ 720,000.00 |
10%
|
|
WC060
|
|
- if gross income exceeds ₱ 720,000.00 |
15%
|
|
WC061
|
WE
|
Insurance agents and insurance adjusters |
|
|
|
|
- if the gross income for the current year did not exceed ₱ 3M |
5%
|
WI070
|
|
|
- if gross income is more than ₱ 3M or VAT registered regardless of amount |
10%
|
WI071
|
|
WE
|
Insurance agents and insurance adjusters |
|
|
|
|
- if gross income for the current year did not exceed ₱ 720,000.00 |
10%
|
|
WC070
|
|
- if gross income exceeds ₱ 720,000.00 |
15%
|
|
WC071
|
WE
|
Other Recipients of Talent Fees |
|
|
|
|
- if the gross income for the current year did not exceed ₱ 3M |
5%
|
WI080
|
|
|
- if gross income is more than ₱ 3M or VAT registered regardless of amount |
10%
|
WI081
|
|
WE
|
Other Recipients of Talent Fees |
|
|
|
|
- if gross income for the current year did not exceed ₱ 720,000.00 |
10%
|
|
WC080
|
|
- if gross income exceeds ₱ 720,000.00 |
15%
|
|
WC081
|
WE
|
Fees of Director who are not employees of the company |
|
|
|
|
- if the gross income for the current year did not exceed ₱ 3M |
5%
|
WI090
|
|
|
- if gross income is more than ₱ 3M or VAT registered regardless of amount |
10%
|
WI091
|
|
WE
|
Rentals Oon gross rental or lease for the continued use or possession of personal property in excess of ₱ 10,000.00 annually and real property used in business which the payor or obligor has not taken title or is not taking title, or in which has no equity; poles, satellites, transmission facilities and billboards |
5%
|
WI100
|
WC100
|
WE
|
Cinemathographic film rentals and other payments to resident indivduals and corporate cinematographic film owners, lessors and distributors |
5%
|
WI110
|
WC110
|
WE
|
Income payments to certain contractors |
2%
|
WI120
|
WC120
|
WE
|
Income distribution to the beneficiaries of estate and trusts |
15%
|
WI130
|
|
WE
|
Gross Commission of service fees of customs, insurance, stock, immigration and commercial brokers, fees of agents of professional entertainers and real estate service practitioners (RESPs)(i.e. real estate consultants, real estate appraisers and real estate brokers |
|
|
|
|
- if the gross income for the current year did not exceed ₱ 3M |
5%
|
WI139
|
|
|
- if gross income is more than ₱ 3M or VAT registered regardless of amount |
10%
|
WI140
|
|
WE
|
Gross Commission of service fees of customs, insurance, stock, immigration and commercial brokers, fees of agents of professional entertainers and real estate service practitioners (RESPs)(i.e. real estate consultants, real estate appraisers and real estate brokers |
|
|
|
|
- if gross income for the current year did not exceed ₱ 720,000.00 |
10%
|
|
WC139
|
|
- if gross income exceeds ₱ 720,000.00 |
15%
|
|
WC140
|
WE
|
Professional fees paid to medical practitioners (includes doctors of medicine, doctors of veterinary science & dentist) by hospitals & clinics or paid directly by HMO and/or other semilar establishments |
|
|
|
|
- if the gross income for the current year did not exceed ₱ 3M |
5%
|
WI151
|
|
|
- if gross income is more than ₱ 3M or VAT registered regardless of amount |
10%
|
WI150
|
|
WE
|
Professional fees paid to medical practitioners (includes doctors of medicine, doctors of veterinary science & dentist) by hospitals & clinics or paid directly by HMO and/or other semilar establishments |
|
|
|
|
- if gross income for the current year did not exceed ₱ 720,000.00 |
10%
|
|
WC151
|
|
- if gross income exceeds ₱ 720,000.00 |
15%
|
|
WC150
|
WE
|
Payment by the General Professional Partnership (GPPs) to its partners |
|
|
|
|
- if gross income for the current year did not exceed ₱ 720,000.00 |
10%
|
WI152
|
|
|
- if gross income exceeds ₱ 720,000.00 |
15%
|
WI153
|
|
WE
|
Income payments made by credit card companies |
1% OF 1/2 of gross amount
|
WI158
|
WC158
|
WE
|
Additional Income Payments to govt personnel from importers, shipping and airline companies or their agents for overtime services |
15%
|
WI159
|
|
WE
|
Income Payment made by NGAs, LGU, & etc to its local/resident suppliers of goods other than those covered by other rates of withholding tax |
1%
|
WI640
|
WC640
|
WE
|
Income Payment made by NGAs, LGU, & etc to its local/resident suppliers of services other than those covered by other rates of withholding tax |
2%
|
WI157
|
WC157
|
WE
|
Income Payment made by top withholding agents to their local/resident suppliers of goods other than those covered by other rates of withholding tax |
1%
|
WI158
|
WC158
|
WE
|
Income Payment made by top withholding agents to their local/resident suppliers of services other than those covered by other rates of withholding tax |
2%
|
WI160
|
WC160
|
WE
|
Commissions, rebates, discounts and other similar considerations paid/granted to independent and/or exclusive sales representatives and marketing agents and sub-agents of companies, including multi-level marketing companies |
|
|
|
|
- if the gross income for the current year did not exceed ₱ 3M |
5%
|
WI515
|
WC515
|
|
- if the gross income is more than ₱ 3M or VAT registered regardless of amount |
10%
|
WI516
|
WC516
|
WE
|
Gross payments to embalmers by funeral parlors |
1%
|
WI530
|
|
WE
|
Payments made by pre-need companies to funeral parlors |
1%
|
WI535
|
WC535
|
WE
|
Tolling fees paid to refineries |
5%
|
WI540
|
WC540
|
WE
|
Income payments made to suppliers of agricultural supplier products in excess of cumulative amount of ₱ 300,000 within the same taxable year |
1%
|
WI610
|
WC610
|
WE
|
Income payments on purchases of minerals, mineral products and quarry resources, such as but not limited to silver, gold, granite, gravel, sand, boulders and other mineral products except purchases by Bangko Sentral ng Pilipinas |
5%
|
WI630
|
WC630
|
WE
|
Income payments on purchases of minerals, mineral products and quarry resources by Bangko Sentral ng Pilipinas ((BSP) from gold miners/suppliers under PD 1899, as amended by RA No. 7076 |
1%
|
WI632
|
WC632
|
WE
|
On gross amount of refund given by MERALCO to customers with active contracts as classified by MERALCO |
15%
|
WI650
|
WC650
|
WE
|
On gross amount of refund given by MERALCO to customers with terminated contracts as classified by MERALCO |
15%
|
WI651
|
WC651
|
WE
|
On gross amount of interest on the refund of meter deposits whether paid directly to the customers or applied against customer's billings of Residential and General Service customers whose monthly electricity consumption exceeds 200 kwh as classified by MERALCO |
10%
|
WI660
|
WC660
|
WE
|
On gross amount of interest on the refund of meter deposits whether paid directly to the customers or applied against customer's billings of Non-Residential customers whose monthly electricity consumption exceeds 200 kwh as classified by MERALCO |
10%
|
WI661
|
WC661
|
WE
|
On gross amount of interest on the refund of meter deposits whether paid directly to the customers or applied against customer's billings of Residential and General Service customers whose monthly electricity consumption exceeds 200 kwh as classified by other by other electric Distribution Utilities (DU) |
10%
|
WI662
|
WC662
|
WE
|
On gross amount of interest on the refund of meter deposits whether paid directly to the customers or applied against customer's billings of Non-Residential customers whose monthly electricity consumption exceeds 200 kwh as classified by other electric Distribution Utilities (DU) |
10%
|
WI663
|
WC663
|
WE
|
Income payments made by political parties and candidates of local and national elections on all their purchases of goods and services relkated to campaign expenditures, and income payments made by individuals or juridical persons for their purchases of goods and services intented to be given as campaign contribution to political parties and candidates |
5%
|
WI680
|
WC680
|
WE
|
Income payments received by Real Estate Investment Trust (REIT) |
1%
|
|
WC690
|
WE
|
Interest income denied from any other debt instruments not within the coverage of deposit substitutes and Revenue Regulations 14-2012 |
15%
|
WI710
|
WC710
|
WE
|
Income payments on locally produced raw sugar |
1%
|
WI720
|
WC720
|
The amount of income tax withheld by the withholding agent is constituted as a full and final payment of income tax due from the payee of the said income.
The liability for payment of tax rests primari;y on the payor as a withholding agent. Failure to withhold the tax or in case of under withholding, the deficiency tax shall be collected from payor/withholding agent.
The payee is not required to file an income tax return for the particular income.
TAX TYPE
|
DESCRIPTION
|
TAX RATE
|
ATC
|
|
IND
|
CORP
|
|||
WF
|
Interest on Foreign loans payable to Non-Resident Foreign Corporation (NRFCs) |
20%
|
|
WC180
|
WF
|
Interest and other income payments on foreign currency transactions/loans payable of Offshore Banking Units (OBUs) |
10%
|
|
WC190
|
WF
|
Interest and other income payments on foreign currency transactions/loans payable of Foreign Currency Deposits Units (FCDUs) |
10%
|
|
WC191
|
WF
|
Cash dividend payment by domestic corporation to citizens ans residents aliens/NRFCs |
10%
|
W1202
|
|
25%
|
|
WC212
|
||
WF
|
Property dividend payment by domestic corporation to citizens and resident aliens/NRFCs |
10%
|
WI203
|
|
25%
|
|
WC213
|
||
WF
|
Cash dividend payment by domestic corporation to NFRCs whose countries allowed tax deemed paid credit (subject to tax sparing rule) |
15%
|
|
WC222
|
|
Property dividend payment by domestic corporation to NFRCs whose countries allowed tax deemed paid credit (subject to tax sparing rule) |
15%
|
|
WC223
|
WF
|
Cash dividend payment by domestic corporation to non-resident alien engaged in Trade or Business within the Philippines (NRAETB) |
20%
|
WI224
|
|
WF
|
Property dividend payment by domestic corporation to NRAETB |
20%
|
WI225
|
|
WF
|
Share of NRAETB in the distributable net income after tax of a partnership (except GPPs) of which he is a partner, or share in the net income after tax of an association, joint account or a joint venture taxable as a corporation of which he is a member or a co-venturer |
20%
|
WI226
|
|
WF
|
On other payments to NRFCs |
25%
|
|
WC230
|
WF
|
Distributive share of individual partners in a taxable partnership, association, joint account or joint venture or consortium |
10%
|
WI240
|
|
WF
|
All kinds of royalty payments to citizens, resident aliens and NRAETB (other than WI380 and WI341), domestic and resident foreign corporations |
20%
|
WI250
|
WC250
|
WF
|
On prizes exceeding ₱ 10,000.00 and other winnings paid to individuals |
20%
|
WI260
|
|
WF
|
Branch profit remittance by all corporations except PEZA/SBMA/CDA registered |
15%
|
|
WC280
|
WF
|
On the gross rentals, lease and charter fees derived by non-resident owner or lessor of foreign vessels |
4.5%
|
|
WC290
|
WF
|
On gross rentals, charter and other fees derived by non-resident lessor or aircraft, machineries and equipment |
7.5%
|
|
WC300
|
WF
|
On payments to oil exploration service contractors/sub-contractors |
8%
|
WI310
|
WC310
|
WF
|
Payments to non-resident alien not engage in trade or business within the Philippines (NRANETB) except on sale of shares in domestic corporation and real property |
25%
|
WI330
|
|
WF
|
On payments to non-residnet individual/foreign corporate cinematographic film owners, lessors or distributors |
25%
|
WI340
|
WC340
|
WF
|
Royalties paid to NRAETB on cinematographic films and similar works |
25%
|
WI341
|
|
WF
|
Final tax on interest or other payments upon tax-free covenant bonds, mortgages, deeds of trust or other obligations under Sec. 57C of the NIRC of 1997, as amended |
30%
|
WI350
|
|
WF
|
Royalties paid to citizens, resident aliens and nraetb on books, other literary works and musical compositions |
10%
|
WI380
|
|
WF
|
Informers cash reward to individuals/juridical persons |
10%
|
WI410
|
WC410
|
WF
|
Cash on property dividend paid by a Real Estate Investment Trust |
10%
|
W700
|
WC700
|
FRINGE BENEFITS GRANTED TO EMPLOYEES (EXCEPT RANK AND FILE EMPLOYEES)
Fringe Benefit means any good, service 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
- Expense account
- Vehicle of any kind
- Household personnel (maid, driver and others)
- Interest on loan at less than market rate to the extent of the difference between the market rate and actual rate granted
- membership fees, dues and other expenses borne by the employer for the employee in social and athletic clubs or other similar organizations
- Expenses for foreign travel
- Holiday and vacation expenses
- Educational assistance to employee or his dependents; and
- Life or health insurance and other non-life insurance premiums or similar amounts in excess of what the law allows.
WITHHOLDING TAX ON GOVERNMENT MONEY PAYMENTS (GMP) - PERCENTAGE TAXES
Withholding Tax on Government Money Payments (GMP) - Percentage Taxes - is the tax withheld by National Government Agencies (NGAs) and instrumentalities, including government-owned and controlled corporations (GOCCs) and local government units (LGUs), before making any payments to non-VAT registered taxpayers/suppliers/payees.
TAX TYPE
|
DESCRIPTION
|
RATE
|
ATC
|
Applicable to Government Withholding Agent Only
|
|||
WV
|
VAT withholding on Purchase of Goods
|
5%
|
WV010
|
WV
|
VAT Withholding on Purchase of Services
|
5%
|
WV020
|
Applicable to Both Government and Private Withholding Agents
|
|||
WV
|
VAT Withholding from non-residents (Government Withholding Agents)
|
12%
|
WV040
|
WV
|
VAT Withholding from non-residents (Private Withholding Agents)
|
12%
|
WV050
|
WV
|
VAT Withholding on Purchases of Goods (with waiver of privilege to claim tax credit) creditable
|
12%
|
WV012
|
WV
|
VAT Withholding on Purchases of Goods (with waiver of privilege to claim input tax credit) final
|
12%
|
WV014
|
WV
|
VAT Withholding on Purchases of Services (with waiver of privilege to claim input tax credit) creditable
|
12%
|
WV022
|
WV
|
VAT Withholding on Purchases of Services (with waiver of privilege to claim input tax credit) final
|
12%
|
WV024
|
Applicable to Government Withholding Agent Only
|
|||
WB
|
Tax on Carriers and Keepers of Garages
|
3%
|
WB030
|
WB
|
Franchise Tax on Gas and Utilities
|
2%
|
WB040
|
WB
|
Franchise tax on radio & TV broadcasting companies whose annual gross receipts do not exceed ₱10M & who are not-VAT registered taxpayer
|
3%
|
WB050
|
WB
|
Tax on Life insurance premiums
|
2%
|
WB070
|
WB
|
Tax on Overseas Dispatch, Message or Conversation from the Philippines
|
10%
|
WB090
|
WB
|
Business tax on Agents of Foreign Insurance companies - Insurance Agents
|
4%
|
WB120
|
WB
|
Business tax on Agents of Foreign Insurance companies - owner of the property
|
5%
|
WB121
|
WB
|
Tax on international carriers
|
3%
|
WB130
|
WB
|
Tax on Cockpits
|
18%
|
WB140
|
WB
|
Tax on amusement places, such as cabarets, night and day clubs, videoke bars, karaoke bars, karaoke televion, karaoke boxes, music lounges and other similar establishments
|
18%
|
WB150
|
WB
|
Taxes on Boxing exhibitions
|
10%
|
WB160
|
WB
|
Taxes on professional basketball games
|
15%
|
WB170
|
WB
|
Tax on jai-alai and race tracks
|
30%
|
WB180
|
WB
|
Tax on sale barter or exchange of stocks listed and traded through Local Stock Exchange
|
6/10 of 1%
|
WB200
|
WB
|
Tax on shares of stocks sold or exchanged through initial and secondary public offering
- Not over 25%
- Over 25% but not exceeding 33 1/3%
- Over 33 1/3%
|
4%
2%
1%
|
WB201
WB202
WB203
|
WB
|
Tax on Banks and Non-banks Financial Intermediaries Performing Quasi Banking Dunctions
|
||
|
A. On interest, commissions and discounts from lending activities as well as income from financial leasing on the basis of the remaining maturities of instruments from which receipts are derived
- Maturity period is five years or less
- Maturity period is more than five years
|
5%
1%
|
WB301
WB302
|
|
B. On dividends and equity shares and net income of subsidiaries
|
0%
|
WB102
|
|
C. On royalties, rentals of property, real or personal, profits from exchange and all other items treated as gross income under the Code
|
7%
|
WB103
|
|
D. On net trading gains within the taxable year on foreign currency, debt securities, derivatives and other similar financial instruments
|
7%
|
WB104
|
WB
|
Tax on Other Non-Banks Financial Intermediaries nor performing Quasi-Banking Functions
|
||
|
A. On interest, commissions and discounts from lending activities as well as income from financial leasing on the basis of the remaining maturities of instruments from which such receipts are derived
- Maturity period is five years or less
- Maturity period is more than five years
|
5%
1%
|
WB108
WB109
|
|
B. On all other items treated as gross income under the Code
|
5%
|
WB110
|
APPLICABLE TO BOTH GOVERNMENT AND PRIVATE WITHHOLDING AGENTS
|
|||
|
Persons exempt from VAT under Sec. 108BB (creditable) Government Withholding Agent
|
3%
|
WB080
|
|
Persons exempt from VAT under Sec. 108BB (creditable) Private Withholding Agent
|
3%
|
WB082
|
|
Persons exempt from VAT under Section 109BB (Section 116 applies)
|
3%
|
WB084
|