WITHHOLDING TAXES

Resource Speaker:
Ms. Claudine Jade B. Mata, CPA, CMA
Revenue Officer I
Bureau of Internal Revenue
 Objectives

To realize the importance of withholding tax system

To differentiate the various types of withholding taxes
To determine the subjects of withholding taxes
To determine the duties and obligations of a withholding
agents
 Topic Outline

Importance of Withholding Tax System

Withholding Tax on Compensation
Expanded Withholding Taxes
Final Withholding Taxes
Withholding Tax on Government Money Payments
Withholding Tax System

- is 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 provides revenues to the Bureau throughout the taxable year
Types of Withholding Taxes

1. Withholding Tax on Compensation

2. Expanded Withholding Tax
3. Final Withholding Tax
4. Withholding Tax on Government Money Payment

(Ref: NIRC, RR 2-98, RR 12-13, RR 1-06, RR 5-08, RR 6-09, RR 5-11, RR8-12. RR1-15, RR3-15, RR5-17, RMC 23-
07, RMC 27-11, RMC 53-11, etc.)
 Withholding Tax on
Compensation

- is the tax withheld from income payments to

individuals arising from an employer-employee
relationship, unless exempted under NIRC and
pertinent laws.
 Withholding Tax on
Compensation

Compensation or Wage means all remuneration

for services performed by an employee for his
employer under an employer-employee relationship,
unless specifically excluded by the Code.
 Withholding Tax on
Compensation
KINDS OF COMPENSATION

1.) Regular Compensation – includes basic salary, fixed

allowances for representation, transportation and
others paid to an employee.
 Withholding Tax on
Compensation
KINDS OF COMPENSATION

2.) Supplementary Compensation – includes payments in addition to

the regular compensation. This include among others:

- Fringe benefit (to rank & file) - Overtime pay

- Fees, including director’s fees - Hazard pay
- Profit sharing - Commissions
- Taxable 13th Month pay - Sick leave
- Monetization of leave credits - Others
 Withholding Tax on
Compensation
EXEMPTIONS
1.) Remunerations received as an incident of employment
A. Retirement Benefits (RA 7641) and given by private firms
a) reasonable plan;
b) approved by BIR;
c) at least 10 year service to same employer & not
less than 50 at the time of retirement
d) retiring official or employee should not have
previously availed of the privilege
 Withholding Tax on
Compensation
EXEMPTIONS
B. Amounts received due to involuntary separation
- beyond the control of the official or employee
(death/sickness/physical disability)
C. Social security benefits, retirement gratuities, pensions and other
similar benefits
D. Payments of benefits under the United States Veterans Administration
E. Social Security System Act of 1954 as amended
F. GSIS Act of 1937, as amended
 Withholding Tax on
Compensation
EXEMPTIONS
2) Remuneration paid for agricultural labor
3) Remuneration for domestic services to private home
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
6) Damages. — Actual, moral, exemplary and nominal
 Withholding Tax on
Compensation
EXEMPTIONS
7) Life Insurance
8) Amount received by the insured as a return of premium
9) Compensation for injuries or sickness
10) Income exempt under treaty
11) Thirteenth (13th month pay and other benefits (ceiling of
P82,000.00)
12) GSIS, SSS, PHIC and HDMF (employee’s mandatory or compulsory
contributions only).
 Withholding Tax on
Compensation
EXEMPTIONS
13) MWE in private & public sector (including holiday pay, overtime
pay, NSD, Hazard pay; Except those receiving additional
compensation e.g. commissions, honoraria, fringe benefits,
benefits in excess of P82,000 ceiling, taxable allowances and
income other than SMW)
14) Personnel Economic Relief Allowance (PERA)
15) Representation and Transportation Allowance (RATA)
16) Fringe Benefits given to employees other than rank-and-file and
subjected to FBT
 Withholding Tax on
Compensation
EXEMPTIONS
17) De Minimis Benefits
a) Monetized unused vacation leave credits of employees not
exceeding ten (10) days during the year;
b) Monetized value of vacation and sick leave credits paid to
government officials and employees
c) Medical cash allowance to dependents of employees not exceeding
P750 per employee per semester or P125 per month
d) Rice subsidy of P1,500 or 1 sack of 50kg. rice per month
amounting to not more than P1,500
e) Uniform and clothing Allowance not exceeding 5,000 per annum
 Withholding Tax on
Compensation
EXEMPTIONS
17) De Minimis Benefits
f) Actual Medical assistance (e.g. medical allowance too cover medical
and healthcare needs, annual medical/executive check-up,
maternity assistance, and routine consultations, not exceeding
P10,000 per annum
g) Laundry allowance not exceeding P 300 per month
h) Employees achievement awards, e.g. for length of service or safety
achievement, in the form of a tangible personal property other than
cash or gift certificate, with an annual monetary value not
exceeding P10,000 under an established written plan which does
not discriminate in favour of highly paid employees
 Withholding Tax on
Compensation
EXEMPTIONS
17) De Minimis Benefits
i) Gifts given during Christmas and major anniversary celebrations not
exceeding P5,000 per employee per annum
j) Daily meal allowance for overtime work night/graveyard shift
nor exceeding 25% of basic minimum wage on a per region basis
k) Benefits received by virtue of CBA and productivity incentive
schemes not exceeding P10,000 in total per employee per
annum
All other benefits not enumerated above shall not be considered de
minimis benefits.
 Withholding Tax on
Compensation
DEDUCTIONS
1. Personal and Additional Exemption
BASIC P 50,000.00
ADDITIONAL (MAX OF 4) P25,000.00 per dependent

 Qualified Dependent
a.) Child – legitimate, illegitimate or legally adopted
– chiefly dependent upon and living with taxpayer
– not more than 21 years of age
– unmarried and not gainfully employed
 Withholding Tax on
Compensation
DEDUCTIONS

 Qualified Dependent
b.) PWD
– Filipino citizen
– Within the 4th civil degree of consanguinity or affinity
– not gainfully employed
– chiefly dependent upon and living with the taxpayer
 Withholding Tax on
Compensation
DEDUCTIONS
2. Premium Payments on Health and Hospitalization Insurance
P2,400 per family per year or P200 per month
Provisions:
a.) Family’s gross income shall not be more than
P250,000.00 for the taxable year.
b.) For married individuals, claimant is the spouse claiming
additional exemption
c.) Substantiation (policy contracts and OR paid)
 Withholding Tax on
Compensation
RESPONSIBILITIES OF EMPLOYER
1. Withhold the tax due and remit the tax withheld from the
employees using BIR Form 1601-C with Alphalist on or before
the 10th day of the following month (15th for EFPS filers) and
15th day of January (20th for EFPS filers) for December return.
2. Submit Annual Information Return (BIR Form 1604-CF)
including the Alphalist of Employees (using the prescribed
format) on or before January 31 of the following year.
3. Issue Certificate of Compensation Payment/Tax Withheld (BIR
Form 2316) to employees on or before January 31 of the
following year or upon termination of employment.
 Withholding Tax on
Compensation
RESPONSIBILITIES OF EMPLOYER
Penal Provisions for failure to file/submit BIR Form 2316
―In the case of each failure to file an information return, statement or
list, or keep any record, or supply any information required by this Code or by the
Commissioner on the date prescribed therefor, unless it is shown that such failure
is due to reasonable cause and not to willful neglect, there shall, upon notice and
demand by the Commissioner, be paid by the person failing to file, keep or supply
the same, one thousand pesos (P1,000) for each such failure: Provided, however,
That the aggregate amount to be imposed for all such failures during a calendar
year shall not exceed twenty-five thousand pesos (P25,000).”
 Withholding Tax on
Compensation
RESPONSIBILITIES OF EMPLOYER
 Penal Provisions for failure to file/submit BIR Form 2316 for
two consecutive years
―Any person required under this Code or by rules and regulations
promulgated thereunder to pay any tax, make any return, keep any record, or
supply correct and accurate information, who wilfully fails to pay such tax,
make such return, keep such record, or supply such correct and accurate
information, or withhold or remit taxes withheld, or refund excess taxes
withheld on compensation, at the time or times required by law or rules and
regulations shall, in addition to other penalties provided by law, upon
conviction thereof, be punished by a fine of not less than Ten Thousand Pesos
(P10,000.00) and suffer imprisonment of not less than one (1) year but not
more than ten (10) years.‖
 Withholding Tax on
Compensation
SUBSTITUTED FILING
 Qualified Individuals (ALL requisites must be present)
1. Receives purely compensation income regardless of amount
2. Compensation is from one employer in the Philippines only.
3. Income tax has been withheld correctly by employer
4. The employee’s spouse also complies with the three conditions
above
5. The employer files BIR Form 1604-CF and issues BIR Form
2316 to employee
 Withholding Tax on
Compensation
SUBSTITUTED FILING
 Not Qualified Individuals
1. Individuals with two or more employers concurrently and/or
successively at anytime during the taxable year.
2. Employees whose income tax has been incorrectly withheld.
3. Individuals deriving other non-business, non-profession related
income in addition to compensation income not otherwise subject to
final tax.
4. Employee’s spouse does not qualify for substituted filing.
5. Non- resident aliens engaged in trade and business in the Philippines
deriving purely compensation income and/or other non-business,
non-profession related income.
 Withholding Tax on
Compensation
REQUIREMENT FOR DEDUCTIBILITY
Any income payment which is otherwise deductible under the
Code shall be allowed as a deduction from the payor's gross income
ONLY if it is shown that the income tax required to be withheld has been
paid to the Bureau.
Provided, that where no income taxes were withheld the
compensation income shall be allowed as deduction when:
a.) BIR Form 2316 have been issued to subject employees; and
b.) BIR Form 1604-CF with Alphalist of employees, including
MWEs have been submitted.
Expanded Withholding Taxes

- 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.
Expanded Withholding Taxes

Income Subject to EWT Rate

A. Professional fees, talent fees, etc. for services 15% if Gross
rendered by individuals income for the
1. Lawyers, CPAs, Engineers, Real Estate service current year
practitioners and all other professionals who have exceeds
passed licensure examinations regulated by PRC, P720,000.00
Supreme Court, etc.
2. Professional entertainers (actors/actresses,
singers, lyricist, composers and emcees). 10% if
3. Professional athletes P720,000.00 or
less
Expanded Withholding Taxes

Income Subject to EWT Rate

4. All directors and producers involved in movies, 15% if Gross
stage, radio, television and musical productions income for the
5. Insurance agents and adjusters current year
6. Management and technical consultants exceeds
7. Bookkeeping agents and agencies P720,000.00
8. Other recipients of talent fees
9. Fees of directors who are not employees of the
company paying such fee, duties of which are 10% if
confined to attendance at and participation in P720,000.00 or
meetings of the board of directors less
Expanded Withholding Taxes

Income Subject to EWT Rate

B. Professional fees, talent fees, etc. for 15% if Gross income for the current
services rendered by juridical year exceeds P720,000.00; 10% if
persons. P720,000.00 or less
C. Rentals
1. Real properties
2. Personal properties used in
business in excess of P10,000
5%
annually except RA 8556 (Financial
Company Act of 1998)
3. Poles, satellites and transmission
facilities
4. Billboards
Expanded Withholding Taxes

Income Subject to EWT Rate

D. Cinematographic film rentals & other payments 5%
E. Income Payments to certain contractors:
1) General Engineering contractors
2) General building contractors 2%
3) Specialty contractors
4) Other contractors
F. Income distribution to the beneficiaries of estate and trusts 15%
G. Gross commission of customs, insurance, stock, immigration and
commercial brokers and fees of agents of professional entertainers and 10%
real estate service practitioner who failed or did not take licensure
examination given by and not registered with the Real Estate Service
under PRC
Expanded Withholding Taxes

Income Subject to EWT Rate

H. Payment by the general professional 15% if Gross income for the
partnership (GPP) to its partners current year exceeds
I. Payments to medical/dental/veterinary P720,000.00
services thru hospitals/clinics/health
maintenance organizations, including direct 10% if P720,000.00 or less
payments to service providers
J. Additional income payments to
government personnel from importers, 15%
shipping and airline companies or their
agents for overtime services
Expanded Withholding Taxes

Income Subject to EWT Rate

K. Gross selling price or total amount of consideration or its
equivalent paid to seller/owner for the sale, exchange or
transfer of real property classified as ordinary asset:
1. Seller/transferor is exempt from CWT in accordance Exempt
with Sec 2.57.5 of RR 2-98
• With selling price of P500,000 or less 1.5%
• With a selling price of more than P500,000 but 3.0%
not more than P2,000,000
• With a selling price of more than P2,000,000 5%

2. Seller/transferor is not habitually engaged in the real 6%

estate business
Expanded Withholding Taxes

Income Subject to EWT Rate

L. Certain income payments made by credit card 1% on one-half of the
companies gross amount paid
M. Commissions, rebate, discounts and other similar
considerations paid/granted to independent and
exclusive distributors, medical/technical and sale 10%
representative and marketing agents and sub-
agents of multi-level marketing companies
N. Tolling Fees paid to refineries 5%
O. Payments made by pre-need companies to funeral
parlors 1%
Expanded Withholding Taxes

Income Subject to EWT Rate

P. Gross payments to embalmers by funeral 1%
companies
Q. Income payments on purchases of minerals,
mineral products and quarry resources as defined
in NIRC Sec. 151 (Income payments on
purchases of gold by BSP from gold 5%
miners/suppliers under PD 1899, as amended by
RA 7076)
R. Income payments received by Real Estate 1%
Investment Trust (REIT)
Expanded Withholding Taxes

Income Subject to EWT Rate

S. Interest Income derived from any other debt instrument
not within the coverage of deposit substitute and RR 14- 20%
2012 unless otherwise provided by law or regulations
T. Political Parties
Income payments made by political parties and candidates
of local and national elections on all their purchase of 5%
goods and services as juridical persons intended to be
given as campaign contribution to political parties and
candidate.
U. Income payments made to suppliers of agricultural 1%
products
Expanded Withholding Taxes
Income Subject to EWT Rate
V. MERALCO Refund arising from Supreme Court case G.R. No.
14814 of April 9,2003 to customers under phase 4 as approved
by the ERC
• Customers with active contracts 25%
• Customers with terminated contracts 32%
W. Withholding on gross amount of interest on the refund of
meter deposit whether paid directly to the customers or
applied against customer’s billings
• Residential and General Service customers as classified by
MERALCO and electric Distribution Utilities (DU)
• Non – residential customers classified by MERALCO 10%
• Non – residential customers classified by electric 10%
Distribution Utilities (DU) 20%
Expanded Withholding Taxes

Income Subject to EWT Rate

X. Income payments made by the government to its local/resident
suppliers of goods & services other than those covered by other
rates of withholding tax
• Supplier of goods 1%
• Supplier of services 2%
Y. Income payments made by TOP 5,000 Individual taxpayers and
TOP 20,000 private corporations to their local/resident suppliers
of goods and services other than those covered by other rates of
withholding tax
• Supplier of goods 1%
• Supplier of services 2%
Expanded Withholding Taxes

Income Subject to EWT Rate

Y. For Purchases involving agricultural products in their original state
(this shall only include corn, coconut, copra, palay, rice, cassava,
coffee, fruits, vegetables, marine food products, poultry and
livestocks), 1% EWT shall only apply in excess of the cumulative
amount of P300,000 within the same taxable year.
Expanded Withholding Taxes

CRITERIA TO BE USED IN THE IDENTIFICATION AS TOP

20,000 PRIVATE CORPORATIONS (any of the following)
 Classified and duly notified by the Commissioner as a large taxpayer under
Revenue Regulations 1-98, as amended (automatic inclusion)
 Annual income tax due of at least P200,000 for the preceding year
 VAT payment or payable, whichever is higher, of at least P100,000 for the
preceding year
 Total percentage tax paid of at least P100,000 for the preceding year
 Gross sales of P10M and above for the preceding year
 Gross purchases of P5M and above for the preceding year
 Total excise tax payment of at least P100,000 for the preceding year
Expanded Withholding Taxes

CRITERIA TO BE USED IN THE IDENTIFICATION AS TOP

5,000 INDIVIDUALS (any of the following)

 Annual income tax due of at least P200,000 for the preceding year
 VAT payment or payable, whichever is higher, of at least P100,000 for the
preceding year
 Total percentage tax paid of at least P100,000 for the preceding year
 Gross sales of P10M and above for the preceding year
 Gross purchases of P5M and above for the preceding year
 Total excise tax payment of at least P100,000 for the preceding year
Expanded Withholding Taxes

“No deduction shall be allowed notwithstanding payments of

withholding tax at the time of the audit investigation or
reinvestigation/ reconsideration in cases where no withholding of tax
was made in accordance with Sections 57 and 58 of the Code.”
Expanded Withholding Taxes

RESPONSIBILITIES OF WITHHOLDING AGENTS

1. Withhold the tax due and remit the tax withheld from the payees using
BIR Form 1601-E with MAP on or before the 10th day of the following
month (15th for EFPS filers) and 15th day of January (20th for EFPS
filers) for December return.
2. Submit Annual Information Return (BIR Form 1604-E) including the
Alphalist of Employees (using the prescribed format) on or before
March 1 of the following year.
3. Issue Certificate of Creditable Tax Withheld at Source (BIR Form 2307)
to payees on or before 20th following close of quarter employed by the
payee in filing his income tax return or upon request of the payee
 Final Withholding Taxes

- 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.
 Final Withholding Taxes

Income Subject to FWT Rate

A. Income Payments to a Citizen or to a Resident Alien Individual
1. Interest from any peso bank deposit, and yield or any other
monetary benefit from deposit substitutes and from trust funds 20%
and similar arrangements
2. Royalties 20%
3. Royalties on books as well as other literary works and musical 10%
compositions
4. prizes (except prizes amounting to P10,000.00 or less which 20%
shall be subject to tax under Sec. 24 (A) of NIRC
5. winnings (except Philippine Charity Sweepstakes winnings and 20%
lotto winnings)
6. Interest income received by a resident individual taxpayer from a 7.5%
depository bank under the Foreign Currency Deposit System
 Final Withholding Taxes

Income Subject to FWT Rate

A. Income Payments to a Citizen or to a Resident Alien Individual
7. Interest income from long-term deposit or investment in the form of savings, common or
individual trust funds, deposit substitutes, investment management accounts and other
investments evidenced by certificates by the Bangko Sentral ng Pilipinas pre-terminated
by the holder before the fifth (5th) year
Holding Period:
4 to less than 5 years 5%
3 to less than 4 years 12%
Less than 3 years 20%
8. Cash and/or property dividends actually or constructively received from a domestic
corporation, joint stock company, insurance or mutual fund companies or on the share of an
individual partner in the distributable net income after tax of a partnership (except general
professional partnership) or on the share of an individual in the net income after tax of an
association, a joint account or a joint venture or consortium of which he is a member or a 10%
co-venturer.
 Final Withholding Taxes

Income Subject to FWT Rate

A. Income Payments to a Citizen or to a Resident Alien Individual
9. 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 6%
and other forms of conditional sales
10. Gross income derived from contracts by sub-contractors from service
contractors engaged in ―petroleum operation‖ as defined under PD 87 8%
(Oil Exploration and Development Act)
B. Income Payments Non-resident Aliens engaged in Trade or Business in the
Philippines
1. Cash and/or property dividend from a domestic corporation or from a
joint stock company, or from an insurance or mutual fund company or 20%
from a regional operating headquarter of a multinational company
 Final Withholding Taxes

Income Subject to FWT Rate

B. Income Payments Non-resident Aliens engaged in Trade or Business in the
Philippines
2. Share in the distributable net income after tax of a partnership (except general
professional partnership) of which he is a partner, or share in the net income after tax 20%
of an association, a joint account, or a joint venture of which he is a member or a co-
venturer.
3. Interests from any currency bank deposit and yield or any other monetary benefit
from deposit substitutes and from trust funds and similar arrangements. 20%
4. Royalties (except royalties on books, as well as other literary works and musical
compositions which shall be subject to 10% ) 20%
5. Prizes (except prizes amounting to ten thousand pesos (P10,000.00) or less subject to
tax under Sec. 25 (A) (1) of NIRC and other winnings (except Philippine Charity
Sweepstakes winnings and lotto winnings). 20%
 Final Withholding Taxes

Income Subject to FWT Rate

B. Income Payments Non-resident Aliens engaged in Trade or Business in the
Philippines
6. Interest income from long-term deposit or investment in the form of savings,
common or individual trust funds, deposit substitutes, investment management
accounts and other investments evidenced by certificates by the Bangko Sentral ng
Pilipinas pre-terminated by the holder before the fifth (5th) year
Holding Period:
4 to less than 5 years 5%
3 to less than 4 years 12%
Less than 3 years 20%
7. 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 6%
8. Gross Income from all sources within the Philippines derived by non-resident
cinematographic film owners, lessors or distributors 25%
 Final Withholding Taxes

Income Subject to FWT Rate

B. Income Payments Non-resident Aliens engaged in Trade or Business in the
Philippines
9. Gross income derived from contracts by sub-contractors from service contractors
engaged in ―petroleum operation‖ as defined under PD 87 (Oil Exploration and 8%
Development Act)
C. Income Derived by Non-resident Aliens Not engaged in Trade or
Business in the Philippines
1. Gross amount of income derived as interest, cash and/or property dividends, rents,
salaries, wages, premiums, annuities, compensation, remuneration, emoluments, or 25%
other fixed or determinable annual or periodic or casual gains, profits, and income and
capital gains.
2. On capital gains presumed to have been realized from the sale, exchange or other
6%
disposition of real property located in the Philippines, classified as capital assets
 Final Withholding Taxes

Income Subject to FWT Rate

D. Income Derived by Alien Individuals Employed by Regional or Area
Headquarters and Regional Operating Headquarters of Multinational
Companies
Gross income received by every alien individual occupying managerial and technical
positions as salaries, wages, annuities, compensation, remuneration, and other
emoluments, such as honoraria and allowances, except income which is subject to the 15%
fringe benefits tax
E. Income Derived by Alien Individuals Employed by Offshore Banking
Units
Gross income as salaries, wages, annuities, compensations, remuneration and other
emoluments 15%
F. Income of Aliens Employed by Foreign Petroleum Service Contractors
and Subcontractors 15%
 Final Withholding Taxes

Income Subject to FWT Rate

G. Income Payments to a Domestic Corporation
1. Interest from any currency bank deposit, and yield or any other monetary benefit 20%
from deposit substitutes and from trust funds and similar arrangements derived
within the Philippines 20%
2. Royalties derived within the Philippine
3. Interest derived by a from a depository bank under the Expanded Foreign Currency 7.5%
Deposit System
4. Income derived by a depository bank under the FCDU from foreign transactions 10%
with local commercial banks
5. On capital gains presumed to have been realized from the sale, exchange or other 6%
disposition of real property located in the Philippines, classified as capital assets
6. Gross income derived from contracts by sub-contractors from service contractors
engaged in ―petroleum operation‖ as defined under PD 87 (Oil Exploration and 8%
Development Act)
 Final Withholding Taxes

Income Subject to FWT Rate

H. Income Payments to a Resident Foreign Corporation
1. Offshore Banking Units 10%
2. Tax on Branch Profit Remittances 15%
3. Interest on any currency bank deposit, and yield or any other monetary benefit
from deposit substitutes and from trust funds and similar arrangements derived 20%
within the Philippines
4. Interest income derived by a from a Depository Bank under the Expanded Foreign 7.5%
Currency Deposit System
5. Income derived by a depository bank under the ExFCDU from foreign currency
transactions with local commercial banks including branches of foreign banks that
may be authorized by the BSP 10%
6. Gross income derived from contracts by sub-contractors from service contractors
engaged in ―petroleum operation‖ as defined under PD 87 (Oil Exploration and 8%
Development Act)
 Final Withholding Taxes

Income Subject to FWT Rate

I. Income Derived from All Sources within the Philippines by a Non-
Resident Foreign Corporation
1. Interests, dividends, rents, royalties, salaries, premiums (except reinsurance
premiums), annuities, emoluments, or other fixed or determinable annual, periodic 30%
or casual gains, profits and income and capital gains (except capital gains realized
from sale, exchange, disposition of shares of stock in any domestic corporation
2. Gross income from all sources within the Philippines derived by non-resident
cinematographic film owners, lessors or distributors 25%
3. On the gross rentals, lease and charter fees, derived by non-resident owner or
lessor of vessels from leases or charters to Filipino citizens or corporations as 4.5%
approved by the Maritime Industry Authority
4. On the gross rentals, charter and other fees derived by non-resident lessor of
aircraft, machineries and other equipment 7.5%
5. Interest on foreign loans contracted on or after August 1, 1986 20%
6. Dividends received from a domestic corporation subject to conditions 15%
 Final Withholding Taxes

Income Subject to FWT Rate

J. Fringe Benefits Granted to Employees (Except Rank and File Employee)
means any good, service or other benefit furnished or granted in cash or in kind by an
employer to an individual employee (except rank and file employees) such as but not 32% of the
limited to, the following: Grossed-up
a. Housing; Monetary
b. Expense account; Value of the
c. Vehicle of any kind; FB
d. Household personnel, such as maid, driver and others;
e. Interest on loan at less than market rate to the extent of the difference between
the market rate and actual rate granted;
f. Membership fees, dues and other expenses borne by the employer for the
employee in social and athletic clubs or other similar organizations;
g. Expenses for foreign travel;
h. Holiday and vacation expenses;
i. Educational assistance to the employee or his dependents; and
j. Life or health insurance and other non-life insurance premiums or similar
amounts in excess of what the law allows
 Final Withholding Taxes

Income Subject to FWT Rate

K. Informer’s rewards to persons instrumental in the discovery of violators 10%
of the NIRC and seizure of smuggled goods

RESPONSIBILITIES OF WITHHOLDING AGENTS

1. Withhold the tax due and remit the tax withheld from the
payees using BIR Form 1601-F/1603 with MAP on or before
the 10th day of the following month (15th for EFPS filers) and
15th day of January (20th for EFPS filers) for December return.
2. Issue Certificate of Final Income Tax Withheld at Source (BIR
Form 2306)
 Withholding Tax on
Government Money Payment
TYPES:
1) Percentage tax on sales of goods or services (3%)
2) VAT on sales of goods or services (5%)

RESPONSIBILITIES OF WITHHOLDING AGENTS

1. Withhold the tax due and remit the tax withheld from the
payees using BIR Form 1600 / 1600WP on or before the 10th
day of the following month the withholding was made.
2. Issue Certificate of Final Income Tax Withheld at Source (BIR
Form 2306)