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:. Withholding Tax

Contents

 

Description

-Withholding Tax on Compensation is the tax withheld from income payments to individuals receiving purely compensation income arising from an employer-employee relationship.

- Expanded Withholding Tax is a kind of withholding tax which is prescribed only for certain payors and is creditable against the income tax due of the payee for the taxable quarter/year.

- Final Withholding Tax is a kind of withholding tax which is prescribed only for certain payors and is not creditable against the income tax due of the payee for the taxable year. Income Tax withheld constitutes the full and final payment of the Income Tax due from the payee on the said income.

- Withholding Tax on Government Money Payments (GMP) is a tax withheld by government bureaus, offices and instrumentalities, including government-owned or-controlled corporations and local government units, before making any payments to private individuals, corporations, partnerships and/or associations.


-Withholding Tax on GMP Percentage Taxes - is the tax withheld by government bureaus, offices and instrumentalities, including government-owned or -controlled corporations and local government units, before making any payments to private individuals, corporations, partnerships and/or associations from non-VAT taxpayers


-Withholding Tax on GMP VAT Taxes - is the tax withheld by government bureaus, offices and instrumentalities, including government-owned or -controlled corporations and local government units, before making any payments to private individuals, corporations, partnerships and/or associations who are VAT registered.

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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. 26-2002, RR No. 14-2003, RR No. 16-2003, RR No. 17-2003, RR No. 30-2003, RR No. 5-2004

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Codal Reference

Sections 78 to 83 of the National Internal Revenue Code (NIRC)

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Monthly Remittance of Taxes Withheld on Compensation

Tax Form
BIR Form 1601 C - Monthly Remittance Return of Income Taxes Withheld on Compensation

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

Documentary Requirements
Return previously filed and proof of tax payments, if amended return

Procedures
1. Fill-up BIR Form 1601 C 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 1601 C, 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 1601 C, 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 1601 C, together with the required attachments.
- Receive your copy of the duly stamped and validated form from the RDO representative

Deadline
Filing Via EFPS

Group A - Fifteen (15) days following end of the month
Group B - Fourteen (14) days following end of the month
Group C - Thirteen (13) days following end of the month
Group D - Twelve (12) days following end of the month
Group E - Eleven (11) days following end of the month

except for taxes withheld for the month of December which shall be filed on or before January 20th of the succeeding year

Manual Filing

On or before the tenth (10th) day of the month following the month the withholding was made, except for taxes withheld for the month of December which shall be filed on or before January 15 of the succeeding year

Tax Rates

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Monthly Remittance Of Income Taxes Withheld (Expanded) [Except for Transactions Involving Onerous Transfer of Real Property Classified as Ordinary Asset]

Tax Form
BIR Form 1601 E - Monthly Remittance Return of Income Taxes Withheld (Expanded) [Except for Transactions Involving Onerous Transfer of Real Property Classified as Ordinary Asset]

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
Return previously filed and proof of tax, if amended return

Procedures
1. Fill-up BIR Form 1601E 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 1601 E, 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 1601 E, 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 registered and present the duly accomplished BIR Form 1601 E, together with the required attachments.
- Receive your copy of the duly stamped and validated form from the RDO representative.

Deadline
Filing Via EFPS

Group A - Fifteen (15) days following end of the month
Group B - Fourteen (14) days following end of the month
Group C - Thirteen (13) days following end of the month
Group D - Twelve (12) days following end of the month
Group E - Eleven (11) days following end of the month

except for taxes withheld for the month of December which shall be filed on or before January 20th of the succeeding year

Manual Filing

On or before the tenth (10th) day of the month following the month the withholding was made, except for taxes withheld for the month of December which shall be filed on or before January 15 of the succeeding year

Tax Rates

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Monthly Remittance Of Final Income Taxes Withheld

Tax Form
BIR Form 1601 F - Monthly Remittance Return of Final Income Taxes Withheld

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 Final Withholding Taxes

Documentary Requirements
Return previously filed and proof of tax, if amended return

Procedures
1. Fill-up BIR Form 1601 F 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 1601 F, 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 1601 F, 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 1601 F, together with the required attachments.
- Receive your copy of the duly stamped and validated form from the RDO representative.

Deadlines
On or before the tenth (10th) day of the month following the month the withholding was made, except for taxes withheld for the month of December which shall be filed on or before January 15 of the succeeding year

Tax Rates

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Monthly Remittance Of Final Income Taxes Withheld On Interest Paid And Yield On Deposit Substitutes, Trust, Etc.

Tax Form
BIR Form 1602 - Monthly Remittance Return of Final Income Taxes Withheld on Interest Paid and Yield on Deposit Substitutes/Trust/Etc.

Who Are Required To File
Banks, non-bank financial intermediaries, finance corporations, investment and trust companies and similar institutions

Documentary Requirements
Return previously filed and proof of tax payments, if amended return

Procedures
1. Fill-up BIR Form 1602 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 1602, 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 1602, 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 1602, together with the required attachments.
- Receive your copy of the duly stamped and validated form from the RDO representative.

Deadline
Filing Via EFPS

Group A - Fifteen (15) days following end of the month
Group B - Fourteen (14) days following end of the month
Group C - Thirteen (13) days following end of the month
Group D - Twelve (12) days following end of the month
Group E - Eleven (11) days following end of the month

except for taxes withheld for the month of December which shall be filed on or before January 15 of the succeeding year

Manual Filing

On or before the tenth (10th) day of the month following the month the withholding was made, except for taxes withheld for the month of December which shall be filed on or before January 15 of the succeeding year


Tax Rates

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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

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Remittance Of Percentage Tax On Winnings And Prizes Withheld By Race Track Operators

Tax Form
BIR Form 1600 WP - Remittance Return of Percentage Tax on Winnings and Prizes Withheld by Race Track Operators

Who Are Required To File
-Operators of race tracks

Documentary Requirements
1. Alphalist of Payees indicating the following:
- Month
- TIN of withholding agent
- Name of Withholding Agent
- TIN of Payee
- Name of Payee
- ATC
- Nature of Payment
- Amount of Payment
- Tax Rate
- Tax Required to be Withheld

2. Return previously filed and proof of tax payments, if amended return

Procedures
1. Fill-up BIR Form 1600 WP 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 1600 WP, 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 1600 WP, 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 1600 WP, together with the required attachments.
- Receive your copy of the duly stamped and validated form from the RDO representative

Deadline
Within twenty (20) days from the date the tax was deducted and withheld

Tax Rates

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Monthly Remittance Of Value-Added Taxes And Other Percentage Taxes Withheld

Tax Form
BIR Form1600 - Monthly Remittance Return of Value-Added Taxes and Other Percentage Taxes Withheld

Who Are Required To File
- 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 under RA Nos. 1051, 7649, 8241 and 8424

-Payors to non-residents receiving income subject to Value-Added Tax

Documentary Requirements
1. Alphabetical list of payees indicating the following:
- Month
- TIN of withholding agent
- Name of Withholding Agent
- TIN of Payee
- ATC
- Nature of Payment
- Name of Payee
- Amount of Payment
- Tax Rate
- Tax Required to be Withheld

2. Return previously filed and proof of tax payments, if amended return

Procedures
1. Fill-up BIR Form 1600 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 1600, 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 1600, 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 registered and present the duly accomplished BIR Form 1600, together with the required attachments.
- Receive your copy of the duly stamped and validated form from the RDO representative.


Deadline
On or before the tenth (10th) day of the month following the month the withholding was made


Tax Rates (Click tax rates for the PDF file)

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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.

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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.

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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
    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.

 

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