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Withholding Tax on Compensation is the tax withheld from income payments to individuals arising
from an employer-employee relationship.
Expanded Withholding Tax 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.
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 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
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.
[return to index]
Codal Reference
[return to index]
Tax Form
BIR Form 1601-C : Monthly Remittance Return of Income Taxes Withheld on Compensation
Every registered withholding agent on compensation, which includes, but not limited to the following:
1) Individuals engaged in business or practice of profession with employees subject to income tax
2) All Juridical persons (e.g., Corporations, general partnerships, associations, etc.) whether or not
engaged in business.
3) Government Agencies and Instrumentalities (e.g.,NGAs, GOCCs, etc.), including local government
units (LGUs)
1) For amended return, proof of remittance and the return previously filed.
3) For Private Sector, copy of the list of MWEs who received hazard pay submitted to the DOLE
Regional/Provincial Offices-Operations Division/Unit, for the return period March, June, September
and December, if applicable.
4) For Public Sector, copy of Department of Budget and Management (DBM) circular/s or equivalent
on MWEs allowed to receive hazard pay, for the return period March, June, September and
December, if applicable.
5) Electronic Tax Remittance Advice (eTRA) previously Tax Remittance Advice (TRA) for National
Government Agencies (NGAs) as required under DOF-DBM Joint Circular No. 1-2000A and RR 1-
2013.
- Proceed to the nearest Authorized Agent Bank (AAB) of the Revenue District Office (RDO) where
you are registered or withholding agent is registered and present the duly accomplished BIR Form No.
1601-C, together with the required attachments (if applicable) and your payment.
- In places where there are no AABs, proceed to the Revenue Collection Officer or duly Authorized
City or Municipal Treasurer located within the Revenue District Office where you are registered or
withholding agent is registered and present the duly accomplished BIR Form No. 1601- C, together
with the required attachments (if applicable) 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.
- Proceed to the Revenue District Office where you are registered or where the withholding agent is
registered and present the duly accomplished BIR Form No. 1601-C, together with the required
attachments.
- Receive your copy of the duly stamped and validated BIR Form from the RDO.
Deadline
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.
On or before the fifteenth (15th) day of the month following the month withholding was made, except
for taxes withheld for the month of December which shall be paid on or before January 20 of the
succeeding year.
Provided however that, in the case of NGAs, all returns must be electronically filed (e-filed) and
payment of the tax due must also be made on the same day the return is e-filed which shall be on or
before the 10th day following the month in which withholding was made, except for taxes withheld for
the month of December of each year, which shall be filed on or before January 15 of the succeeding
year.
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 and paid on or before January 15 of
the succeeding year
Tax Rates
DAILY 1 2 3 4 5 6 7 8
Exemption 0.00 0.00 1.65 8.25 28.05 74.26 165.02 412.54
Status (000P) +0% over +5% over +10% over +15% over +20% over +25% over +30% over +32% over
A. Table for employees without qualified dependent
1. Z 0.0 1 0 33 99 231 462 825 1,650
2. S/ME 50.0 1 165 198 264 396 627 990 1,815
B. Table for single/married employee with qualified dependent child(ren)
1. ME1 / S1 75.0 1 248 281 347 479 710 1,073 1,898
2. ME2 / S2 100.0 1 330 363 429 561 792 1,155 1,980
3. ME3 / S3 125.0 1 413 446 512 644 875 1,238 2,063
4. ME4 / S4 150.0 1 495 528 594 726 957 1,320 2,145
WEEKLY 1 2 3 4 5 6 7 8
Exemption 0.00 0.00 9.62 48.08 163.46 432.69 961.54 2,403.85
Status +0% over +5% over +10% over +15% over +20% over +25% over +30% over +32% over
A. Table for employees without qualified dependent
1. Z 0.0 1 0 192 577 1,346 2,692 4,808 9,615
2. S/ME 50.0 1 962 1,154 1,538 2,308 3,654 5,769 10,577
B. Table for single/married employee with qualified dependent child(ren)
1. ME1 / S1 75.0 1 1,442 1,635 2,019 2,788 4,135 6,250 11,058
2. ME2 / S2 100.0 1 1,923 2,115 2,500 3,269 4,615 6,731 11,538
3. ME3 / S3 125.0 1 2,404 2,596 2,981 3,750 5,096 7,212 12,019
4. ME4 / S4 150.0 1 2,885 3,077 3,462 4,231 5,577 7,692 12,500
SEMI-MONTHLY 1 2 3 4 5 6 7 8
Exemption 0.00 0.00 20.83 104.17 354.17 937.50 2,083.33 5,208.33
Status +0% over +5% over +10% over +15% over +20% over +25% over +30% over +32% over
A. Table for employees without qualified dependent
1. Z 0.0 1 0 417 1,250 2,917 5,833 10,417 20,833
2. S/ME 50.0 1 2,083 2,500 3,333 5,000 7,917 12,500 22,917
B. Table for single/married employee with qualified dependent child(ren)
1. ME1 / S1 75.0 1 3,125 3,542 4,375 6,042 8,958 13,542 23,958
2. ME2 / S2 100.0 1 4,167 4,583 5,417 7,083 10,000 14,583 25,000
3. ME3 / S3 125.0 1 5,208 5,625 6,458 8,125 11,042 15,625 26,042
4. ME4 / S4 150.0 1 6,250 6,667 7,500 9,167 12,083 16,667 27,083
MONTHLY 1 2 3 4 5 6 7 8
Exemption 0.00 0.00 41.67 208.33 708.33 1,875.00 4,166.67 10,416.67
Status +0% over +5% over +10% over +15% over +20% over +25% over +30% over +32% over
A. Table for employees without qualified dependent
1. Z 0.0 1 0 833 2,500 5,833 11,667 20,833 41,667
2. S/ME 50.0 1 4,167 5,000 6,667 10,000 15,833 25,000 45,833
B. Table for single/married employee with qualified dependent child(ren)
1. ME1 / S1 75.0 1 6,250 7,083 8,750 12,083 17,917 27,083 47,917
2. ME2 / S2 100.0 1 8,333 9,167 10,833 14,167 20,000 29,167 50,000
3. ME3 / S3 125.0 1 10,417 11,250 12,917 16,250 22,083 31,250 52,083
4. ME4 / S4 150.0 1 12,500 13,333 15,000 18,333 24,167 33,333 54,167
S/ME = P50,000 EACH WORKING EMPLOYEE Qualified Dependent Child = P25,000 each but not
exceeding four (4) children
[return to index]
Monthly Remittance Of Income Taxes Withheld (Expanded) [Except for Transactions Involving
Onerous Transfer of Real Property Classified as Ordinary Asset]
Tax Form
BIR Form No. 1601-E : Monthly Remittance Return of Income Taxes Withheld (Expanded) [Except for
Transactions Involving Onerous Transfer of Real Property Classified as Ordinary Asset]
Every registered withholding agent on Expanded Withholding Tax, which may include, but not limited
to the following:
2) An individual, with respect to payments made in connection with his trade or business. However,
insofar as taxable sale, exchange or transfer of real property is concerned, individual buyers who are
not engaged in trade or business are also constituted as withholding agents.
4) All individuals, juridical persons and political parties, with respect to their income payments made
as campaign expenditures and/or purchase of goods and services intended as campaign
contributions.
Documentary Requirements
2. Monthly Alphalist of Payees (MAP), except income payments made by political parties, candidates
and income payments made by individual or juridical person on the purchase of goods and services
as campaign contributions to political parties and candidates
4. Electronic Tax Remittance Advice (eTRA) previously Tax Remittance Advice (TRA) for National
Government Agencies (NGAs) as required under DOF- DBM Joint Circular No. 1-2000A and RR 1-
2013
- In places where there are no AABs, proceed to the Revenue Collection Officer or duly Authorized
City or Municipal Treasurer located within the Revenue District Office where you are registered or
taxpayer concerned is registered 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 AABs/Revenue
Collection Officer/duly Authorized City or Municipal Treasurer.
- 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
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.
On or before the fifteenth (15th) day of the month following the month withholding was made, except
for taxes withheld for the month of December which shall be paid on or before January 20th of the
succeeding year.
Provided however that, in the case of NGAs, all returns must be electronically filed (e-filed) and
payment of the tax due must also be made on the same day the return is e-filed which shall be on or
before the 10th day following the month in which withholding was made, except for taxes withheld for
the month of December of each year, which shall be filed on or before January 15 of the succeeding
year.
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 and paid on or before January 15 of
the succeeding year
Tax Rates
[return to index]
Tax Form
BIR Form No. 1600 - Monthly Remittance Return of Value-Added Taxes and Other Percentage Taxes
Withheld
1. All government offices, bureaus, agencies or instrumentalities, local government units, government
owned and controlled corporation on money payments made to private individuals, corporations,
partnerships, associations and other judicial/artificial entities as required under RA Nos. 1051, 7649,
8241, 8424 and 9337.
3. Payors of income to persons, natural or juridical, who opted to remit his/its VAT or percentage tax
through the withholding and remittance of the same by the withholding agent/payor which option is
manifested by filing the Notice of Availment of the option to Pay the Tax through the Withholding
Process, copy furnished the withholding agent-payor and the revenue district offices of both the payor
and payee.
Documentary Requirements
5. Electronic Tax Remittance Advice (eTRA) previously Tax Remittance Advice (TRA) for National
Government Agencies (NGAs) as required under DOF- DBM Joint Circular No. 1-2000A and RR 1-
2013
- Proceed to the nearest Authorized Agents Banks (AABs) of the Revenue District Office where you
are registered or taxpayer concerned is registered and present the duly accomplished BIR Form
No.1600, together with the required attachments and your payment.
- In places where there are no AABs, proceed to the Revenue Collection Officer or duly Authorized
City or Municipal Treasurer located within the Revenue District Office where you are registered or
taxpayer concerned is registered and present the duly accomplished BIR Form No. 1600, together
with the required attachments and your payment.
- Receive your copy of the duly stamped and validated form from the teller of the AABs /Revenue
Collection Officer/duly authorized City or Municipal Treasurer.
- Proceed to the Revenue District Office where you are registered and present the duly accomplished
BIR Form No. 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,
whether EFPS or manual filing and payment.
Tax Rates
[return to index]
Tax Form
BIR Form 1601-F : Monthly Remittance 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
Documentary Requirements
4. Electronic Tax Remittance Advice (eTRA) previously Tax Remittance Advice (TRA) for National
Government Agencies (NGAs) as required under DOF-DBM Joint Circular No. 1-2000A and RR 1-
2003
- Proceed to the nearest Authorized Agent Bank (AAB) of the Revenue District Office where you are
registered or taxpayer concerned is registered and present the duly accomplished BIR Form No.
1601F, together with the required attachments and your payment.
- In places where there are no AAB, the return shall be filed and the tax paid with the Revenue
Collection Officer or duly Authorized City or Municipal Treasurer within the Revenue District Office
where the withholding agents place of business/office is located who will issue a Revenue Official
Receipt (BIR Form No. 2524) therefor;
- Proceed to the Revenue District Office where you are registered 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
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.
On or before the fifteenth (15th) day of the month following the month withholding was made, except
for taxes withheld for the month of December which shall be paid on or before January 20 of the
succeeding year.
Provided however that, in the case of NGAs, all returns must be electronically filed (e-filed) and
payment of the tax due must also be made on the same day the return is e-filed which shall be on or
before the 10th day following the month in which withholding was made, except for taxes withheld for
the month of December of each year, which shall be filed on or before January 15 of the succeeding
year.
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 and paid on or before January 15 of
the succeeding year
Tax Rates
[return to index]
Remittance Return of Percentage Tax On Winnings And Prizes Withheld By Race Track
Operators
Tax Form
BIR Form No. 1600-WP : Remittance Return of Percentage Tax on Winnings and Prizes Withheld by
Race Track Operators
Documentary Requirements
- Proceed to the nearest Authorized Agent Bank (AAB) of the Revenue District Office where you are
registered or taxpayer concerned is registered and present the duly accomplished BIR Form No.
1600-WP, together with the required attachments and your payment.
- In places where there are no AAB, proceed to the Revenue Collection Officer or duly Authorized City
or Municipal Treasurer located within the Revenue District Office where you are registered or taxpayer
concerned is registered and present the duly accomplished BIR Form No. 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 AABs/Revenue
Collection Officer/duly Authorized City or Municipal Treasurer.
- Proceed to the Revenue District Office where you are registered or taxpayer concerned is registered
and present the duly accomplished BIR Form No. 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
[return to index]
Quarterly Remittance Of Final Income Taxes Withheld On Fringe Benefits Paid To Employees
Other Than Rank And File
Tax Form
BIR Form No. 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 employees subject to
Final Withholding Tax
Documentary Requirements
2. Electronic Tax Remittance Advice (eTRA) previously Tax Remittance Advice (TRA) for National
Government Agencies (NGAs) as required under DOF- DBM Joint Circular No. 1-2000A and RR 1-
2013
- Proceed to the nearest Authorized Agent Bank (AAB) of the Revenue District Office where you are
registered or taxpayer concerned is registered and present the duly accomplished BIR Form No.
1603, together with the required attachments and your payment.
- In places where there are no AAB, proceed to the Revenue Collection Officer or duly Authorized City
or Municipal Treasurer located within the Revenue District Office where you are registered or taxpayer
concerned is registered and present the duly accomplished BIR Form No. 1603, together with the
required attachments and your payment.
- Receive your copy of the duly stamped and validated form from the teller of the AABs/Revenue
Collection Officer/duly Authorized City or Municipal Treasurer.
- Proceed to the Revenue District Office where you are registered or taxpayer concerned is registered
and present the duly accomplished BIR Form No. 1603, together with the required attachments.
- Receive your copy of the duly stamped and validated form from the RDO representative
Deadline
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.Provided however that, in the case of NGAs, it shall
be e-filed and paid on or before the 10th day of the month following the quarter.
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
[return to index]
Monthly Remittance Of Final Income Taxes Withheld On Interest Paid And Yield On Deposit
Substitutes, Trust, Etc.
Tax Form
BIR Form No. 1602 - Monthly Remittance Return of Final Income Taxes Withheld on Interest Paid and
Yield on Deposit Substitutes/Trust/Etc.
Banks, non-bank financial intermediaries, finance corporations, investment and trust companies and
other institutions required to withhold final income tax on interest paid/accrued on deposit and yield or
any other monetary benefit from deposits substitutes and from trust fund and similar arrangements.
Documentary Requirements
- Proceed to the nearest Authorized Agent Bank (AAB) of the Revenue District Office where you are
registered or taxpayer concerned is registered and present the duly accomplished BIR FormNo. 1602,
together with the required attachments and your payment.
- In places where there are no AAB, proceed to the Revenue Collection Officer or duly Authorized City
or Municipal Treasurer within the Revenue District Office where the withholding agents place of
business/office is located and present the duly accomplished BIR Form No. 1602, together with the
required attachments and your payment who will issue a Revenue Official Receipt (BIR Form No.
2524) therefor.
- 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.
- Proceed to the Revenue District Office where you are registered or taxpayer concerned is registered
and present the duly accomplished BIR Form No. 1602, together with the required attachments.
Deadline
On or before the fifteenth (15th) day of the month following the month withholding was made
On or before the fifteenth (15th) day of the month following the month withholding was made, except
for taxes withheld for the month of December which shall be paid on or before January 20th of the
succeeding year
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 and paid on or before January 15 of
the succeeding year.
Tax Rates
[return to index]
Tax Form
BIR Form No. 1604-E : 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
Documentary Requirements
2. Alphalist of Other Payees Whose Income Payments Are Exempt from Withholding Tax but subject
to Income Tax
3. Return previously filed and proof of tax payment for amended return
2. Proceed to the Revenue District Office where you are registered and present the duly
accomplished BIR Form No. 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.
[return to index]
Annual Information On Income Taxes Withheld On Compensation And Final Withholding Taxes
Tax Form
BIR Form No. 1604-CF : Annual Information Return of Income Taxes Withheld on Compensation and
Final Withholding taxes.
Every withholding agent/payor who is either an individual or non-individual required to deduct and
withhold taxes on:
Documentary Requirements
4. Alphalist of Employees Whose Compensation Income Are Exempt from Withholding Tax But
Subject to Income Tax
6. Alphalist of Employees other than Rank and File Who Were Given Fringe Benefits During the Year
8. Return previously filed and proof of tax payment for amended return
Procedures
1. Accomplish BIR Form No. 1604-CF in triplicate copies and attach the necessary schedules in
prescribed form (hard and soft copy)
2. Proceed to the Revenue District Office where you are registered and present the duly
accomplished BIR Form No. 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 following the calendar year in which the compensation payment and other
income payments subjected to final withholding taxes were paid or accrued.
[return to index]
RR No. 2-98, RR No. 3-98, RR No. 8-98, RR No. 10-98, RR No. 12-98, RR No. 3-99, RR No. 8-2000,
RR No. 10-2000, RR No. 6-2001, RR No. 12-2001, 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 1-2004, RR 3-2004, RR No. 5-2004, RR No. 8-2005, RR 1-2006, RR 2-
2006, RR 4-2006, RR 4-2007, RR 4-2008, RR 5-2008, RR 6-2008, RR 7-2008, RR 14-2008, RR No.
10-2008, RR 1-2009, RR 2-2009, RR 3-2009, RR 5-2009, RR 6-2009, RR 8-2009, RR 10-2009, RR
No. 11-2010, RR No. 5-2011, RR No. 7-2011, RR No. 13-2011, RR No. 3-2012, RR No. 6-2012, RR
No. 8-2012, RR No. 14-2012, RR No. 16-2012, RR No. 1-2013, RR No. 10-2013, RR No. 11-2013
[return to index]
There are two main classifications or types of withholding tax. These are:
2) What is compensation?
It means any remuneration received for services performed by an employee from his employer under
an employee-employer relationship.
a) Regular compensation - includes basic salary, fixed allowances for representation, transportation
and others paid to an employee
b) 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
b. 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
c. Social security benefits, retirement gratuities, pensions and other similar benefits
d. Payment of benefits due or to become due to any person residing in the Philippines under the law
of the US administered by the US Veterans Administration
f. Benefits received from the GSIS Act of 1937, as amended, and the retirement gratuity received by
the government official and employees
2. Remuneration paid for agricultural labor and paid entirely in products of the farm where the labor is
performed
4. Remuneration for casual labor not in the course of an employer's trade or business
5. Compensation for services by a citizen or resident of the Philippines for a foreign government or an
international organization
13. Compensation Income of Minimum Wage Earners (MWEs) with respect to their Statutory
Minimum Wage (SMW) as fixed by Regional Tripartite Wage and Productivity Board
(RTWPB)/National Wage and Productivity Commission (NWPC), including overtime pay, holiday pay,
night shift differential and hazard pay, applicable to the place where he/she is assigned.
14. Compensation Income of employees in the public sector if the same is equivalent to or not more
than the SMW in the non-agricultural sector, as fixed by RTWPB/NWPC, including overtime pay,
holiday pay, night shift differential and hazard pay, applicable to the place where he/she is assigned.
- These are facilities and privileges of relatively small value and are offered or furnished by the
employer to his employees merely as means of promoting their health, goodwill, contentment or
efficiency. The following shall be considered "De Minimis" benefits not subject to income tax, hence
not subject to withholding tax on compensation income of both managerial and rank and file
employees:
Monetized unused vacation leave credits of private 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 P750.00 per employee per
semester or P125.00 per month;
Rice subsidy of P1,500 or one (1) sack of 50 kg. rice per month amounting to not more than P1,500;
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 P10,000
per annum;
Employees achievement awards, e.g., for length of service or safety achievement, which must be in
the form of a tangible personal property other than cash or gift certificate, with an annual monetary
value not exceeding P10,000 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 celebration not exceeding P5,000.00 per
employee perannum;
Daily meal allowance for overtime work and night/graveyard shift not exceeding twenty-five percent
(25%) of the basic minimum wage on a per region basis;
b. Working for only one employer in the Philippines for the calendar year;
c. Tax has been withheld correctly by the employer (tax due equals tax withheld);
d. The employees spouse also complies with all three (3) conditions stated above.
e. The employer files the annual information return (BIR Form No. 1604-CF)
Note: For those employees qualified under the substituted filing, the employer
- Those individually engaged in the practice of professions or callings such as lawyers; certified public
accountants; doctors of medicine; architects; civil, electrical, chemical, mechanical, structural,
industrial, mining, sanitary, metallurgical and geodetic engineers; marine surveyors; doctors of
veterinary science; dentist; professional appraisers; connoisseurs of tobacco; actuaries; interior
decorators, designers, real estate service practitioners (RESPs), (i. e. real estate consultants, real
estate appraisers and real estate brokers) requiring government licensure examination given by the
Real Estate Service pursuant to Republic Act No. 9646 and all other profession requiring government
licensure examinations and/or regulated by the Professional Regulations Commission, Supreme
Court, etc.
- Professional entertainers such as but not limited to actors and actresses, singers, lyricist,
composers and emcees
- Directors and producers involved in movies, stage, radio, television and musical productions
- Fees of directors who are not employees of the company paying such fees whose duties are
confined to attendance at and participation in the meetings of the Board of Directors
b) Professional fees, talent fees, etc for services of taxable juridical persons
c) Rentals:
- Rental of billboards
- Specialty contractors
1. Filling, demolition and salvage work contractors and operators of mine drilling apparatus
2. Operators of dockyards
3. Persons engaged in the installation of water system, and gas or electric light, heat or power
5. Transportation Contractors
6. 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
8. Messengerial, janitorial, security, private detective, credit and/or collection agenciesand other
business agencies
13. Persons engaged in the sale of computer services, computer programmers, software
developer/designer, etc.
16. TV and radio station operators on sale of TV and radio airtime, and
g) Gross commissions 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) who failed or did not take up the licensure
examination given by and not registered with the Real Estate Service under the Professional
Regulations Commission
j) 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 classified as ordinary asset
k) Additional income payments to government personnel from importers, shipping and airline
companies or their agents
m) Income payments made by the top 20,000 private corporations to their purchase of goods and
services from local/resident suppliers other than those covered by other rates of withholding
n) Income payments by government offices on their purchase of goods and services, from
local/resident suppliers other than those covered by other rates of withholding
o) 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.
v) Interest income on the refund paid through direct payment or application against customers' billing
by other electric Distribution Utilities in accordance with the rules embodied in ERC Resolution No. 8
series of 2008 dated June 4, 2008 governing the refund of meter deposits which was approved and
adopted by ERC in compliance with the mandate of Article 8 of the Magna Carta for Residential
Electricity Consumers and Article 3.4.2 of DSOAR exempting all electricity consumers, whether
residential or non-residential from the payment of meter deposit.
w) Income payments made by the top 5,000 individual taxpayers to their purchase of goods and
services from their local/resident suppliers other than those covered by other rates of withholding
x) Income payments made by political parties and candidates of local and national elections of all
their campaign expenditures, and income payments made by individuals or juridical persons for their
purchases of goods and services intended to be given as campaign contribution to political parties
and candidates
y) Interest Income derived from any other debt instruments not within the coverage of deposit
substitutes and RR No. 14-2012
z) Income payments subject to Withholding Tax received by Real Estate Investment Trust (REIT)
(Sec.12 of RR No. 13-2011)
- 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, Income Derived by Alien Individual Employed by
Offshore Banking Units and Income of Aliens Employed by Foreign Petroleum Service Contractors
and Subcontractors
- 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
- 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
- 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
- Income derived by a depository bank under the expanded foreign currency deposits system from
foreign currency transactions with local commercial banks
g) 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
- 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
i) Informers Reward
j) Cash or property dividends paid by a Real Estate Investment Trust (REIT) pursuant to Section 13 of
RR 13-2011
10) Aside from the required withholding of income tax by government agencies and instrumentalities
on their payments to their suppliers of goods and services, what other tax types must be withheld by
them.
b) Percentage Tax on all payments subject to percentage tax such as payments to the following:
- Any person engaged in business whose gross sales or receipts do not exceed P1,919,500 (RR 3-
2012) and who are not VAT-registered persons. (Persons exempt from VAT under Sec. 109V of the
Tax Code)
- Domestic carriers and keepers of garages, except owners of bancas and owners of animal drawn
two wheeled vehicle
- Communication providers with regards to overseas dispatch, messages or conversation from the
Philippines
- Proprietor, lessee, or operator of cockpits, cabarets, night or day clubs, videoke/karaoke bars,
karaoke television, karaoke boxes, music lounges and other similar establishments, 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 or 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
A withholding agent is any person or entity who is required to deduct and remit the taxes withheld to
the government.
12) 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 over the place 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
a) Classified and duly notified by the Commissioner as a large taxpayer under Revenue Regulation
No. 1-98, as amended, or belonging to the top five thousand (5,000) private corporations under RR
12-94, or to the top ten thousand (10,000) private corporations under RR 17-2003, unless previously
de-classified as such or had already ceased business operations (automatic inclusion);
b) VAT payment or payable whichever is higher, of at least P100,000 for the preceding year;
c) Annual income tax due of at least P200,000 for the preceding year;
d) Total percentage tax paid of at least P100,000 for the preceding year;
g) Total excise tax payment of at least P100,000 for the preceding year.
a) In addition to the above responsibilities of a withholding agent, Top 20,000 private corporations
shall withhold the one percent (1%) creditable expanded withholding tax on the purchase of goods
and two percent (2%) on the purchase of services (other than those covered by other withholding tax
rates) from local suppliers where it regularly makes purchases. However, casual purchase of goods
shall not be subject to withholding tax unless the amount of purchase at any one time involves
P10,000 or more, in which case, it shall then be required to withhold the tax. The same rule apply to
local/resident supplier of services other than those covered by separate rates of withholding tax.
Provided, however, that for purchases involving agricultural products in their original state, the tax
required to be withheld shall only apply to purchases in excess of the cumulative amount of P300,000
within the same taxable year. For this purpose, agricultural products in their original state shall only
include corn, coconut, copra, palay, rice cassava, sugar cane, coffee, fruits, vegetables, marine food
products, poultry and livestocks.
b) Taxes withheld shall be remitted using BIR Form 1601-E on a monthly basis thru the use of the
Electronic Filing and Payment System (EFPS) on the dates prescribed for e-filers. Filing shall be done
on a staggered basis provided under RR 26-2002 and payment shall be made every 15 th day following
the end of the month for Jan-Nov and Jan. 20 of the following year for the month of December.
c) Certificate of Creditable Tax Withheld at Source (BIR Form No. 2307) shall be issued to the payees
within twenty (20) days following the close of such payees taxable quarter or upon demand of the
payees;
d) A list of regular supplier of goods and/or services shall be submitted on a semestral basis through
e-submission facility or as an attachment under Electronic Filing and Payment System (EFPS).
Deadline for submission of the list is not later than July 31 and January 31 of each year. However,
initial list of regular suppliers should be submitted within fifteen (15) days from actual receipt hereof.
a) VAT payment or payable whichever is higher, of at least P100,000 for the preceding year;
b) Annual income tax due of at least P200,000 for the preceding year;
c) Total percentage tax paid of at least P100,000 for the preceding year;
f) Total excise tax payment of at least P100,000 for the preceding year.
a) In addition to the obligations of a withholding agent, Top 5,000 Individual Taxpayers shall withhold
the one percent (1%) creditable expanded withholding on the purchase of goods and two percent
(2%) on the purchase of services (other than those covered by other withholding tax rates) from local
suppliers where it regularly makes purchases. However, casual purchase of goods shall not be
subject to withholding tax unless the amount of purchase at any one time involves P10,000 or more,
in which case, it shall then be required to withhold the tax. The same rule apply to local/resident
supplier of services other than those covered by separate rates of withholding tax. Provided, however,
that for purchases involving agricultural products in their original state, the tax required to be withheld
shall only apply to purchases in excess of the cumulative amount of P300,000 within the same
taxable year. For this purpose, agricultural products in their original state shall only include corn,
coconut, copra, palay, rice cassava, sugar cane, coffee, fruits, vegetables, marine food products,
poultry and livestocks.
b) Taxes withheld shall be remitted under BIR Form 1601-E on a monthly basis thru the Electronic
Filing and Payment System (EFPS) facility within the prescribed period.
c) Certificate of Creditable Tax Withheld at Source (BIR Form No. 2307) shall be issued to the payees
within twenty (20) days following the close of such payees taxable quarter or upon demand of the
payees;
d) A list of regular supplier of goods and/or services shall be submitted on a semestral basis through
e-submission facility or as an attachment under Electronic Filing and Payment System (EFPS).
Deadline for submission of the list is not later than July 31 and January 31 of each year. However,
initial list of regular suppliers should be submitted within fifteen (15) days from actual receipt hereof.
17) Who are the responsible officials in the government offices charged with the duty to deduct,
withhold and remit withholding taxes?
The following officials are duty bound to deduct, withhold and remit taxes:
a) For Office of the Provincial Government-province- the Chief Accountant, Provincial Treasurer and
the Governor;
b) For Office of the City Government-cities- the Chief Accountant, City Treasurer and the City Mayor;
c) For Office of the Municipal Government-municipalities- the Chief Accountant, Municipal Treasurer
and the Mayor;
e) For NGAs, GOCCs and other Government Offices, the Chief Accountant and the Head of Office or
the Official holding the highest position.
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