Escolar Documentos
Profissional Documentos
Cultura Documentos
(A) Final Withholding Tax. — Under the final withholding tax system the
amount of income tax withheld by the withholding agent is constituted as a full
and final payment of the income tax due from the payee on the said income. The
liability for payment of the tax rests primarily on the payor as a withholding agent.
Thus, in case of his failure to withhold the tax or in case of under withholding, the
deficiency tax shall be collected from the payor/withholding agent. The payee is
not required to file an income tax return for the particular income. LLpr
The finality of the withholding tax is limited only to the payee's income tax
liability on the particular income. It does not extend to the payee's other tax
liability on said income, such as when the said income is further subject to a
percentage tax. For example, if a bank receives income subject to final
withholding tax, the same shall be subject to a percentage tax. cdasia
(1) Interest from any peso bank deposit, and yield or any other
monetary benefit from deposit substitutes and from trust funds
and similar arrangements; royalties (except on books as well as
other literary works and musical compositions), prizes (except
prizes amounting to ten thousand pesos (P10,000.00) or less
which shall be subject to tax under Sec. 24 (A) of the
Code) and other winnings (except Philippine Charity
Sweepstakes winnings and lotto winnings) derived from
sources within the Philippines — Twenty percent (20%).
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Less than three (3) years 20%
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taxpayer-seller.
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based on the gross amount thereof and at the rates prescribed therefor:
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Less than three (3) years 20%
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(C) Income Derived from All Sources Within the Philippines by a
Non-resident Alien Individual Not Engaged in Trade or Business Within the
Philippines. — The following forms of income derived from all sources
within the Philippines shall be subject to a final withholding tax in the hands of a
non-resident alien individual not engaged in trade or business within the
Philippines based on the following amounts and at the rates prescribed therefor:
(1) On the gross amount of income derived from all sources within
the Philippines by a non-resident alien individual who is not
engaged in trade or business in the Philippines as interest, cash
and/or property dividends, rents, salaries, wages, premiums,
annuities, compensation, remuneration, emoluments, or other
fixed or determinable annual or periodic or casual gains, profits
and income and capital gains — Twenty five percent (25%). Cdpr
(2) 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 Code (i.e. the authority of the
Commissioner to prescribe the real property values), whichever
is higher — Six percent (6%).
(1) Interest from any currency bank deposit and yield or any other
monetary benefit from deposit substitutes and from trust fund
and similar arrangements derived from sources within the
Philippines — Twenty Percent (20%).
(3) Interest on any currency bank deposit and yield or any other
monetary benefit from deposit substitutes and from trust funds
and similar arrangements and royalties derived from sources
within the Philippines — Twenty percent (20%).
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34% - beginning January 1, 1998
33% - beginning January 1, 1999 and
32% - beginning January 1, 2000 and thereafter
(2) Gross income from all sources within the Philippines derived
by non-resident cinematographic film owners, lessors or
distributors — Twenty five percent (25%).
(J) Fringe Benefits Granted to the Employee (Except Rank and File
Employee). — There shall be imposed a final tax of 34% beginning January
1, 1998; 33% beginning January 1, 1999 and 32% beginning January 1, 2000 and
thereafter, on the grossed-up monetary value of fringe benefits, granted or
furnished by the employer to his employees (except rank and file as defined in the
Code). Fringe benefits however, which are required by the nature of or necessary
to the trade, business or profession of the employer, or where such fringe benefit is
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for the convenience and advantage of the employer shall not be subject to the
fringe benefits tax. prcd
The term fringe benefit 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 limited to, the following:
(1) Housing;
(5) Interest on loan at less than market rate to the extent of the
difference between the market rate and actual rate granted;
Fringe benefits granted to the following employees and taxable under Sec.
25 (B), (C), (D) and (E) shall also be subject to the fringe benefit tax to wit:
The computation and the scheme for withholding the tax on fringe benefits
shall be governed by such revenue orders that the Commissioner shall issue as
guidelines and clarifications for its proper and consistent implementation.
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The amount of reward shall be equivalent to ten percent
of the market value of the smuggled and confiscated goods or
one million pesos (P1,000,000.00) per case whichever is lower.
prLL
(A) Professional fees, talent fees, etc., for services rendered by individuals
— On the gross professional, promotional and talent fees or any other form
of remuneration for the services of the following individuals — Fifteen percent
(15%), if the gross income for the current year exceeds P720,000; and Ten
percent (10%), if otherwise;
(2) Professional entertainers, such as, but not limited to, actors and
actresses, singers, lyricist, composers and emcees;
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(7) Bookkeeping agents and agencies;
(9) 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.
The amounts subject to withholding tax under this paragraph shall include
not only fees, but also per diems, allowances and any other form of income
payments not subject to withholding tax on compensation.
(B) Professional fees, talent fees, etc., for services of taxable juridical
persons. — On the gross professional, promotional and talent fees, or any
other form of remuneration enumerated in the preceding subparagraph for the
services of taxable juridical persons — Fifteen percent (15%), if the gross
income for the current year exceeds P720,000; and Ten percent (10%), if
otherwise;
(C) Rentals
(b) Railroads;
(d) Tunnels;
(j) Excavating;
(k) Trenching;
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agencies, credit and/or collection agencies and other
business agencies;
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(F) Income distribution to the beneficiaries. — On income distributed to
the beneficiaries of estates and trust as determined under Sec. 60 of the
Code, except such income subject to final withholding tax and tax exempt income
— Fifteen percent (15%);
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(b) Exception — The withholding tax herein prescribed shall not
apply whenever there is proof that no professional fee has in
fact been charged by the medical practitioner and paid by his
patient. Provided, however, that this fact is shown in a sworn
declaration jointly executed by the medical practitioner, and the
patient or his duly authorized representative, in case the patient
is a minor or otherwise incapacitated. This sworn declaration,
to be executed in the form presented in Annex "A" of these
Regulations, shall form part of the records of the hospital or
clinic and shall constitute as part of its records and shall be
made readily available to any duly authorized Revenue Officer
for tax audit purpose. Provided, further, that the said
administrator of the hospital or clinic shall inform the Revenue
District Office having jurisdiction over such hospital or clinic
about any medical practitioner who fails or refuses to execute
the sworn statement herein prescribed, within ten (10) days
from the occurrence of such event.
(c) Hospitals and clinics shall submit the names and addresses of
medical practitioners in the following classifications, every
15th day after the end of each calendar quarter, to the
Collection Division of the Revenue Region for non-large
taxpayers and at the Large Taxpayers Document Processing and
Quality Assurance Division (LTDP&QAD) in the National
Office or Large Taxpayers District Office (LTDO) in the
Region for large taxpayers, where such hospital or clinic is
registered, using the prescribed format.
(d) For this purpose, the term 'medical practitioners' shall likewise
include medical technologists, allied health workers (e.g.,
occupational therapists, physical therapists, speech therapists,
nurses, etc.) and other medical practitioners who are not under
an employer-employee relationship with the hospital, clinic or
HMO and other similar establishments.
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With a selling price of Five Hundred Thousand Pesos
(P500,000.00) or less 1.5%
With a selling price of more than Five Hundred
Thousand Pesos (P500,000.00) but not more than
Two Million Pesos (P2,000,000.00) 3.0%
With a selling price of more than Two Million Pesos
(P2,000,000.00) 5.0%
Gross selling price shall mean the consideration stated in the sales
document or the fair market value determined in accordance with Section 6 (E) of
the Code, whichever is higher. In an exchange, the fair market value of the
property received in exchange shall be considered as the consideration.
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Absolute Sale but the basis for the imposition thereof shall be the gross selling
price or fair market value of the property, whichever is higher, at the time of
the execution of the Contract to Sell.
For this purpose, the importers, shipping and airline companies or their
agents, shall be the withholding agents of the Government;
(M) Income payments made by the top twenty thousand (20,000) private
corporations to their local/resident supplier of goods and local/resident supplier
of services other than those covered by other rates of withholding tax. —
Income payments made by any of the top 20,000 private corporations, as
determined by the Commissioner, to their local/resident supplier of goods and
local/resident supplier of services, including non-resident aliens engaged in trade
or business in the Philippines. Provided, however, that for purchases involving
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agricultural products in their original state, the tax required to be withheld under,
this sub-section shall only apply to purchases in excess of the cumulative amount
of Three Hundred Thousand Pesos (P300,000) within the same taxable year. For
this purpose, an agricultural product in their original state as used in these
Regulations, shall only include corn, coconut, copra, palay, rice, cassava,
coffee, fruit, vegetable, marine food product, poultry and livestock.
Top 20,000 private corporations shall include a corporate taxpayer who has
been determined and notified by the Bureau of Internal Revenue (BIR) as having
satisfied any of the following criteria:
Number of
Transactions Year Purchase Amount
One 2009 P90,000.00
Two 2010 320,000.00
One 2011 400,000.00
One 2012 90,000.00
Answer:
The term "goods" pertains to tangible personal property. It does not include
intangible personal property, as well as real property.
Any corporation which has been duly classified and notified as large
taxpayer by the Commissioner pursuant to RR 1-98, as amended, shall be
automatically considered one of the top twenty thousand (20,000) private
corporations, provided, however, that its authority as a withholding agent shall be
effective only upon receipt of written notice from the Commissioner that it has
been classified as a large taxpayer, as well as one of the top twenty thousand
(20,000) private corporations, for purposes of these regulations.
The withholding agent shall submit on a semestral basis a list of its regular
suppliers of goods and/or services to the Large Taxpayers Assistance
Division/Large Taxpayers District Office in the case of large taxpayers duly
notified as such pursuant to RR 1-98, as amended, or Revenue District Office
(RDO) having jurisdiction over the withholding agent's principal place of business
on or before July 31 and January 31 of each year.
Meat, fruit, fish, vegetable and other agricultural and marine food
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products, even if they have undergone the simple processes of preparation or
preservation for the market, such as freezing, drying, salting, smoking or stripping,
including those using advanced technological means of packaging, such as shrink
wrapping in plastics, vacuum packing, tetra-pak and other similar packaging
method, shall still be covered by this subsection.
(1) MERALCO Refund arising from Supreme Court Case G.R. No.
14814 of April 9, 2003 to customers under Phase IV as
approved by ERC — On gross amount of refund given by
MERALCO to Customers with active contracts as classified by
MERALCO — Twenty Five Percent (25%); To Customers with
terminated contracts — Thirty Two Percent (32%); and
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(ii) Non-Residential customers — Twenty percent (20%);
(W) Income payments made by the top five thousand (5,000) individual
taxpayers to their local/resident suppliers of goods and local/resident suppliers of
services other than those covered by other rates of withholding tax. —
Income payments made by the Top 5,000 individual taxpayers engaged in trade or
business in the Philippines, as determined by the Commissioner of Internal
Revenue, to their local/resident suppliers of goods and local/resident suppliers of
services other than those covered by other rates of withholding tax, including
non-resident aliens engaged in trade or business in the Philippines. Provided,
however, that for purchases involving agricultural products in their original state,
the tax required to be withheld under this sub-section shall only apply to purchases
in excess of the cumulative amount of Three Hundred Thousand Pesos (P300,000)
within the same year. For this purpose, agricultural products in their original
state as used in these Regulations, shall include only corn, coconut, copra,
palay, rice, cassava, coffee, fruit, vegetable, marine food product, poultry and
livestock.
Number of
Transactions Year Purchase Amount
Two 2009 P330,000.00
One 2010 420,000.00
One 2011 95,000.00
Answer:
Number of
Transactions Year Purchase Amount
Seven 2009 P100,000.00
Ten 2010 310,000.00
Two 2011 130,000.00
Answer:
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since the amount is below the threshold of P300,000.00.
The term "goods" pertains to tangible personal property used in the ordinary
course of business and/or practice of profession. It does not include intangible
personal property as well as real property.
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(Z) Income payments to Real Estate Investment Trust (REIT). —
Income payments made to corporate taxpayers duly registered with the Large
Taxpayers Regular Audit Division 3 (now Regular LT Audit Division 3) of the
Bureau of Internal Revenue, as REITs for purposes of availing the incentive
provisions of Republic Act No. 9856, otherwise known as "The Real Estate
Investment Trust Act of 2009", as implemented by RR No. 13-2011. — One
percent (1%);
1.1 For locally produced raw cane sugar and raw sugar — the
composite price, in metric tons, governing the specified crop
year of raw cane sugar and raw sugar as reflected in one of
the reports (Annex "A") under the weekly Final Sugar
Production Bulletin duly issued by the Sugar Regulatory
Administration (SRA) on the date of sale, or actual selling
price, whichever is higher.
For purposes of this subsection, the following terms shall have the
following meaning:
(ix) Sugar — refers to raw cane sugar, raw sugar and refined
sugar.
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The Regional Director/Revenue District Officer, which has jurisdiction
over the physical location of the sugar mills/refineries, shall issue the Authority to
Release Locally Produced Raw Sugar/Raw Cane Sugar/Molasses (Annexes
"A" or "B", or "C" as applicable) or Authority to Release Locally Refined
Sugar (Annexes "D" or "E" as applicable) to the proprietors or operators, for
purposes of allowing the transfer/withdrawal of their mill share, or to the buyers of
Quedans or Molasses Storage Certificates on the locally produced sugar;
Provided, however, That, copies of proofs of payment of the creditable
withholding tax due thereon (i.e., duly validated Monthly Remittance Return of
Creditable Income Taxes Withheld (Expanded) [BIR Form No. 1601-E] and Bank
Payment/Deposit Slip/Revenue Official Receipt [BIR Form No. 2524]) shall have
been submitted and attached to the written request for said authorization.
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SECTION 2.57.4. Time of Withholding. — The obligation of the
payor to deduct and withhold the tax under Section 2.57 of these Regulations
arises at the time an income payment is paid or payable, or the income payment
is accrued or recorded as an expense or asset, whichever is applicable, in the
payor's books, whichever comes first. The term "payable" refers to the date the
obligation becomes due, demandable or legally enforceable.
Provided, however, that where income is not yet paid or payable but
the same has been recorded as an expense or asset, whichever is applicable, in
the payor's books, the obligation to withhold shall arise in the last month of
the return period in which the same is claimed as an expense or amortized for
tax purposes.
Since the discount is not yet paid or payable but the aliquot portion of
which has already been recorded as expense for tax purposes, the withholding
of the 20% final tax shall be done on the last month of the quarter when the
same has been claimed as an expense in the quarterly income tax returns/final
adjustments returns filed by X Corporation.
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(A) National government agencies and its instrumentalities
including provincial, city, municipal governments and
barangays except government-owned and controlled
corporations.
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(5) Joint ventures or consortium formed for the purpose
of undertaking construction projects or engaging in
petroleum, coal, geothermal & other energy
operations pursuant to an operating or consortium
agreement under a service contract with the
government.
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(c) The return for final withholding taxes on interest from any
currency bank deposit and yield or any other monetary benefit
from deposit substitutes and from trust funds and similar
arrangements shall be filed and the payment made within
twenty five (25) days from the close of each calendar quarter.
For final withholding taxes, the statement should be given to the payee on
or before January 31 of the succeeding year.
Upon request of the payee, however, the payor must furnish such certificate
simultaneously with the income payment.
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The Register of Deeds shall annotate on the Original Certificate of Title,
Transfer Certificate of Title or Condominium Certificate of Title of the said
property such information required under Section 58(E) of the Tax Code. In
case of any violation of the said requirement, he shall be liable to the penalties
provided under Section 269 of the said Tax Code.
(A) The amount of creditable tax withheld shall be allowed as a tax credit
against the income tax liability of the payee in the quarter of the taxable year in
which income was earned or received.
(B) Claims for tax credit or refund of any creditable income tax which was
deducted and withheld on income payments shall be given due course only when it
is shown that the income payment has been declared as part of the gross income
and the fact of withholding is established by a copy of the withholding tax
statement duly issued by the payor to the payee showing the amount paid and the
amount of tax withheld therefrom.
(1) If in lieu of the automatic application of his excess credit, the taxpayer
wants a cash refund or a tax credit certificate for use in payment of his other
national internal revenue tax liabilities, he shall make a written request therefor,
within two years after the payment of the tax (Ref. Secs. 204(c) and 229 of the
Code ), provided however, that if the taxpayer has indicated in his income tax
return his option for either a cash refund or a tax credit certificate, such indication
shall be considered sufficient for the purpose. Upon filing of his request, the
taxpayer's income tax return showing the excess expanded withholding tax credits
shall be examined. The excess expanded withholding tax so determined, shall be
refunded/credited to the taxpayer.
Taxable Period
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1997 1998-QTR1 1998-QTR2 1998-QTR3
Less: Tax
Withheld (1,500) (500) (300) 0
Net Tax
Payable/
Creditable (500) (300) (100) 500
It shall be the duty of tax officials to accept the income tax return or other
documents submitted under oath.
(A) The payee reported the income and pays the tax due thereon
and the withholding agent pays the tax including the interest
incident to the failure to withhold the tax, and surcharges, if
applicable, at the time of the audit investigation or
reinvestigation/reconsideration.
(B) The recipient/payee failed to report the income on the due date
thereof, but the withholding agent/taxpayer pays the tax,
including the interest incident to the failure to withhold the tax,
and surcharges, if applicable, at the time of the
audit/investigation or reinvestigation/reconsideration.
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(a) Monetized unused vacation leave credits of private employees
not exceeding ten (10) days during the year;
(d) Rice subsidy of P1,500 or one (1) sack of 50 kg. rice per month
amounting to not more than P1,500;
All other benefits given by employers which are not included in the above
enumeration shall not be considered as "de minimis" benefits, and hence, shall be
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subject to income tax as well as withholding tax on compensation income.
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Philippines is subject to all provisions of law and regulations applicable to an
employer.
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The phrase "for any cause beyond the control of the said
official or employee" connotes involuntariness on the part of
the official or employee. The separation from the service of the
official or employee must not be asked for or initiated by him.
The separation was not of his own making. Whether or not the
separation is beyond the control of the official or employee,
being essentially a question of fact, shall be determined on the
basis of prevailing facts and circumstances. It shall be duly
established by the employer by competent evidence which
should be attached to the monthly return for the period in which
the amount paid due to the involuntary separation was made.
The remuneration paid for the services above enumerated which are
performed in or about rooming or lodging houses, boarding houses, clubs, hotels,
hospitals or commercial offices or establishments is considered as compensation;
Any remuneration paid for casual labor, that is, labor which is occasional,
incidental or irregular, but which is rendered in the course of the employer's trade
or business, is considered as compensation.
(7) Life Insurance. — The proceeds of life insurance policies paid to the
heirs or beneficiaries upon the death of the insured, whether in a single sum or
otherwise, provided however, that interest payments agreed under the policy for
the amounts which are held by the insured under such an agreement shall be
included in the gross income.
(10) Income exempt under treaty. — Income of any kind to the extent
required by any treaty obligation binding upon the Government of the Philippines.
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government, (whether national or local), including
government-owned or controlled corporations, and or private
offices received after the twelfth (12th) month pay; and
The above stated exclusions (a) and (b) shall cover benefits paid or accrued
during the year provided that the total amount shall not exceed thirty thousand
pesos (P30,000.00) which may be increased through rules and regulations issued
by the Secretary of Finance, upon recommendation of the Commissioner, after
considering, among others, the effect on the same of the inflation rate at the end of
the taxable year.
(12) GSIS, SSS, Medicare and other contributions. — GSIS, SSS, Medicare
and Pag-Ibig contributions, and union dues of individual employees.
'Statutory Minimum Wage'' (SMW) shall refer to the rate fixed by the
Regional Tripartite Wage and Productivity Board (RTWPB), as defined by
the Bureau of Labor and Employment Statistics (BLES) of the Department of
Labor and Employment (DOLE). The RTWPB of each region shall determine
the wage rates in the different regions based on established criteria and shall
be the basis of exemption from income tax for this purpose.
Holiday pay, overtime pay, night shift differential pay and hazard pay
earned by the aforementioned MWE shall likewise be covered by the above
exemption. Provided, however, that an employee who receives/earns
additional compensation such as commissions, honoraria, fringe benefits,
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benefits in excess of the allowable statutory amount of P30,000.00, taxable
allowances and other taxable income other than the SMW, holiday pay,
overtime pay, hazard pay and night shift differential pay shall not enjoy the
privilege of being a MWE and, therefore, his/her entire earnings are not
exempt from income tax, and consequently, from withholding tax.
For purposes of these regulations, hazard pay shall mean the amount
paid by the employer to MWEs who were actually assigned to danger or
strife-torn areas, disease-infested places, or in distressed or isolated stations
and camps, which expose them to great danger of contagion or peril to life.
Any hazard pay paid to MWEs which does not satisfy the above criteria is
deemed subject to income tax and consequently, to withholding tax.
The basic salary of MWEs in the public sector shall be equated to the
SMW in the non-agricultural sector applicable to the place where he/she is
assigned. The determination of the SMW in the public sector shall likewise
adopt the same procedures and consideration as those of the private sector.
Holiday pay, overtime pay, night shift differential pay and hazard pay
earned by the aforementioned MWE in the public sector shall likewise be
covered by the above exemption. Provided, however, that a public sector
employee who receives additional compensation such as commissions,
honoraria, fringe benefits, benefits in excess of the allowable statutory
amount of P30,000.00, taxable allowances and other taxable income other
than the SMW, holiday pay, overtime pay, night shift differential pay and
hazard pay shall not enjoy the privilege of being a MWE and, therefore,
his/her entire earnings are not exempt from income tax and, consequently,
from withholding tax.
For purposes of these regulations, hazard pay shall mean the amount
paid by the employer to MWEs who were actually assigned to danger or
strife-torn areas, disease-infested places, or in distressed or isolated stations
and camps, which expose them to great danger of contagion or peril to life.
Any hazard pay paid to MWEs which does not satisfy the above criteria is
deemed subject to income tax and consequently to withholding tax.
For the purpose of determining the tax, an employee can have but one
payroll period with respect to the compensation paid by any one employer. Thus,
if an employee is paid a regular compensation for the weekly payroll and in
addition thereto is paid supplemental compensation (for example taxable bonuses)
determined with respect to a different period, the payroll period is the weekly
payroll period.
In general, the relationship of the employer and employee exists when the
person for whom services were performed has the right to control and direct the
individual who performs the services, not only as to the result to be accomplished
by the work but also as to the details and means by which the result is
accomplished. An employee is subject to the will and control of the employer not
only as to what shall be done, but how it shall be done. In this connection, it is not
necessary that the employer actually directs or controls the manner in which the
services are performed. It is sufficient that he has the right to do so.
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No distinction is made between classes or grades of employees. Thus
superintendents, managers, and others belonging to similar levels are employees.
An officer of a corporation is an employee of the corporation. An individual,
performing services for a corporation, both as an officer and director, is an
employee subject to withholding on compensation, including director's fees.
(A) Person for whom the services are or were performed does not have
control. — The term "employer" also refers to the person having control of the
payment of the compensation in cases where the services are or were performed
for a person who does not exercise such control. For example, where
compensation, such as certain types of pensions or retirement pay, are paid by a
trust and the person for whom the services were performed has no control over the
payment of such compensation, the trust is deemed to be the "employer".
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the employer.
In any such case, each employer shall be liable for the return and payment
of a pro-rata portion of the tax so determined in accordance with the ratio of the
amount contributed by each employer relative to the aggregate of such
compensation.
A fiduciary, agent, or other person acting for two or more employers may
be authorized to withhold the tax under these regulations with respect to the wages
of the employees of such employers. Such fiduciary, agent, or other person may
also be authorized to make and file returns of the tax withheld at source on such
compensation and to furnish the receipts required under these Regulations.
Application for the authorization to perform such act should be addressed to the
Commissioner or his duly authorized representative. If such authority is granted by
the Commissioner, all provisions of the law (including penalties) and regulations
prescribed in pursuance of the law applicable in respect of an employer for whom
such fiduciary, agent or other person acts shall remain subject to all provisions of
law (including penalties) and regulations prescribed in pursuance of the law
applicable in respect of employers.
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SMW, including holiday pay, overtime pay, night shift differential and
hazard pay of MWEs in the private/public sectors as defined in these
Regulations. Provided, further, that an employee who receives additional
compensation such as commissions, honoraria, fringe benefits, benefits in
excess of the allowable statutory amount of P30,000.00, taxable allowances
and other taxable income other than the SMW, holiday pay, overtime pay,
hazard pay and night shift differential pay shall not enjoy the privilege of
being a MWE and, therefore, his/her entire earnings are not exempt from
income tax and, consequently, shall be subject to withholding tax.
For the year 2008, however, being the initial year of implementation of
R.A. 9504, there shall be a transitory withholding tax table for the period
from July 6 to December 31, 2008 (Annex "D") determined by prorating the
annual personal and additional exemptions under R.A. 9504 over a period of
six months. Thus, for individuals, regardless of personal status, the prorated
personal exemption is P25,000, and for each qualified dependent child (QDC),
P12,500.
Z — Zero exemption
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(BIR Form No. 1902);
The numerals (1-4) affixed to the status symbols "ME" and "S" represent
the number of qualified legitimate, illegitimate, or legally adopted children.
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reimbursement for expenses incurred in the performance of government
personnel's official duties shall not be subject to income tax and consequently
to withholding tax.
Step 4. Use the appropriate tables mentioned under Section 2.79 (B) (1)
for the payroll period: monthly, semi-monthly, weekly or daily, as the case may
be.
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–––––––––
Excess P2,000.00
Add: Supplementary compensation 5,000.00
–––––––––
Total P7,000.00
–––––––––
Tax on P10,000.00 P708.33
Tax on excess (P7,000 x 20%) 1,400.00
–––––––––
Withholding tax for January 2009 P2,108.33
========
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 (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 0 833 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
EXAMPLE II: Mr. B, married with three (3) qualified dependent children
receives P12,000.00 (net of SSS/GSIS, PHIC, HDMF employee share only) as
regular semi-monthly compensation. Mrs. B, his wife, is also employed. Mr. B did
not waive his right in favor of the wife to claim for the additional exemptions.
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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 employees with qualified dependent child(ren)
1. ME 1/S1 75.0 1 3,125 3,542 4,375 6,042 8,958 13,542 23,958
2. ME 2/S2 100.0 1 4,167 4,583 5,417 7,083 10,000 14,583 25,000
3. ME 3/S3 125.0 1 5,208 5,625 6,458 8,125 11,042 15,625 26,042
4. ME 4/S4 150.0 1 6,250 6,667 7,500 9,167 12,083 16,667 27,083
EXAMPLE III: For the month of August 2008, Mrs. C, married with three
qualified dependent children, with a basic salary equivalent to the SMW, receives
P9,964.00 (P382/day x 313 days ÷ 12) as statutory monthly minimum wage plus
other compensation such as commission of P10,000, transportation allowance of
P2,000, hazard pay of P1,000, overtime pay of P5,000 and night shift differential
pay of P2,000.00. Compute the withholding tax of Mrs. C for the month of August
2008 using the Revised Transitional Withholding Tax Table for the period July 6
to December 31, 2008.
COMPUTATION:
Statutory Minimum Wage P9,964.00
Gross Benefits
Hazard pay 1,000.00
Overtime Pay 5,000.00
Night Shift Differential 2,000.00 8,000.00
––––––––– –––––––––
Sub-total P17,964.00
========
Taxable compensation
Commission * 10,000.00
Transportation allowance * 2,000.00 12,000.00
–––––––– –––––––––
Total Taxable Compensation Income P29,964.00
========
Regular compensation P9,964.00
Less: Compensation level (line B-3 column 4) 7,708.00
–––––––––
Excess P2,256.00
Add: Supplementary compensation (8,000 + 12,000) 20,000.00
–––––––––
Total P22,256.00
–––––––––
Tax on P9,964.00 (Line B3, col. 4) P208.33
Tax on excess (P22,256.00 x 15%) 3,338.40
–––––––––
Withholding tax for the month of August 2008 P3,546.73
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========
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 (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 0 833 2,500 5,833 11,667 20,833 41,667
2. S/ME 25.0 1 2,083 2,917 4,583 7,917 13,750 22,917 43,750
B. Table for employees with qualified dependent child(ren)
1. ME1/S1 37.5 1 3,125 3,958 5,625 8,958 14,792 23,958 44,792
2. ME2/S2 50.0 1 4,167 5,000 6,667 10,000 15,833 25,000 45,833
3. ME3/S3 62.5 1 5,208 6,042 7,708 11,042 16,875 26,042 46,875
4. ME4/S4 75.0 1 6,250 7,083 8,750 12,083 17,917 27,083 47,917
* An employee who receives compensation other than the SMW, holiday, overtime,
night shift differential and hazard pay shall not enjoy the privilege of being a minimum wage
earner, and his entire earnings are no longer considered exempt.
Step 4. Multiply the tax computed in Step No. (3) by the number of
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payroll period to which it relates;
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Tax on P22,083.00 (Line B.3, Col. 6) = P1,875.00
Tax on excess (P1,550.33 x 25%) = 387.58
––––––––
Tax on P23,633.33 = P2,262.58
=======
4. For Jan. P2,229.25 x 1 = P2,229.25
For Feb. P2,229.25 x 2 = P4,458.50
For Mar. P2,262.58 x 3 = P6,787.74
5. For Jan. P2,229.25 – 0 = P2,229.25
For Feb. P4,458.50 – 2,229.25 = P2,229.25
For Mar. P6,787.74 – 4,458.50 = P2,329.24
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Tax on P22,083.00 (Line B.3, Col. 6) = P1,875.00
Tax on excess (P417 x 25%) = P104.25
––––––––
Tax on P22,500.00 = P1,979.25
=======
4. For Jan. P1,858.33 x 1 = P1,858.33
For Feb. P1,916.75 x 2 = P3,833.50
For Mar. P1,979.25 x 3 = P5,937.75
5. For Jan. P1,858.33 – 0 = P1,858.33
For Feb. P3,833.50 – 1,858.33 = P1,975.17
For Mar. P5,937.75 – 3,833.50 = P2,104.25
EXAMPLE VI: A newly hired employee with previous employer within the
calendar year 2009.
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STEP 2 —
For July 6 P93,000.00/7 = P13,285.71
For Aug. P108,000.00/8 = P13,500.00
For Sep. P123,000.00/9 = P13,666.67
For Oct. P138,000.00/10 = P13,800.00
For Nov. P153,000.00/11 = P13,909.09
STEP 3 —
For July 6 P13,285.71
Tax On P10,000.00 = P708.33
Tax On Excess (P3,285.71 x 20%) 657.14
––––––––
Tax On P13,285.71 = P1,365.47
========
For August P13,500.00
Tax On P10,000.00 = P708.33
Tax On Excess (P3,500.00 x 20%) 700.00
––––––––
Tax On P13,500.00 = P1,408.33
========
For Sept. P13,666.67
Tax On P10,000.00 = P708.33
Tax On Excess (P3,666.67 x 20%) 733.33
––––––––
Tax On P13,666.67 = P1,441.66
========
For October P13,800.00
Tax On P10,000.00 = P708.33
Tax On Excess (P3,800.00 x 20%) = 760.00
––––––––
Tax On P13,800.00 = P1,468.33
========
For November P13,909.09
Tax On P10,000.00 = P708.33
Tax On Excess (P3,909.09 x 20%) = 781.82
––––––––
Tax On P13,818.18 = P1,490.15
========
STEP 4 —
For July 6 P1,365.47 x 7 = P9,558.29
For August 1,408.33 x 8 = P11,266.64
For September 1,441.66 x 9 = P12,974.94
For October 1,468.33 x 10 = P14,683.30
For November 1,490.15 x 11 = P16,391.65
Step 5 —
For July 6 P9,558.29 - P7,849.98 = P1,708.31
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For August 11,266.64 - P9,558.29 = P1,708.35
For September 12,974.94 - P11,266.64 = P1,708.30
For October 14,683.30 - P12,974.94 = P1,708.36
For November 16,391.65 - P14,683.30 = P1,708.35
Step 2. If the employee has previous employment/s within the year, add
the amount of taxable regular and supplementary compensation paid to the
employee by the present employer doing the annualized computation to the taxable
compensation income received from previous employer/s during the calendar year:
Total family income includes primary income and other income from
sources received by all members of the nuclear family, i.e., father, mother,
unmarried children living together as one household, or a single parent with
children. A single person living alone is considered as a nuclear family.
The spouse claiming the additional exemptions for the QDC shall be the
same spouse to claim the deductions for premium payments.
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The excess tax (when the amount of cumulative tax already deducted and
withheld is greater than the tax computed in Step 5) shall be credited or refunded
to the employee not later than January 25 of the following year. However, in case
of termination of employment before December, the refund shall be given to the
employee at the payment of the last compensation during the year. In return, the
employer is entitled to deduct the amount refunded from the remittable amount of
taxes withheld from compensation income in the current month in which the
refund was made, and in the succeeding months thereafter until the amount
refunded by the employer is fully repaid.
COMPUTATION:
Total compensation received from
January 1 to May 31, 2008 P90,000.00
Add: Compensation to be received on June 18,000.00
––––––––––
Gross compensation Jan-June 108,000.00
COMPUTATION:
Total compensation received from
Previous employer P108,000.00
Add: Compensation from new employer 115,000.00
–––––––––––
Gross compensation 223,000.00
Less: Personal Exemption (HF) 37,500.00
–––––––––––
Net Taxable Compensation P185,500.00
Tax Due P33,875.00*
Less: Tax Withheld (11,100 + 15,000) 26,100.00
–––––––––––
To be deducted from Mr. Z P7,775.00
––––––––––
* Tax on P140,000.00 P22,500.00
Tax on excess (P45,500 x 25%) 11,375.00
–––––––––––
Tax on P185,500.00 P33,875.00
==========
c) Mr. Y, single with a qualified dependent brother, had his first job on
July 2008. He receives P18,000 as monthly regular compensation. The tax
withheld was P12,083.75.
COMPUTATION:
Total compensation received from
July to November 2008 P90,000.00
Add: Compensation to be received in December 18,000.00
––––––––––
Gross compensation 108,000.00
Less: Personal Exemption (pro-rated) 37,500.00
––––––––––
Net Taxable Compensation P70,500.00
Tax Due P8,600.00 *
Less: Tax Withheld 12,083.75
–––––––––––
To be refunded to Mr. Y (P3,483.75)
*Tax on P70,000.00 P8,500.00
Tax on excess (P500 x 20%) 100.00
––––––––––
Tax on P83,000.00 P8,600.00
=========
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EXAMPLE VIII: (Year-end adjustments computation) — For taxable year
2009, WTD Corporation (Full exemption per R.A. 9504 shall be used for calendar
year 2009) has the following employees:
3. Mr. G, single, who was hired on July 6, 2009 received the following:
1. Mr. E
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Compensation Received
For the Year Non-Taxable Taxable
Basic Salary (45,000 x 12mos.) P540,000 P540,000
Overtime (Nov.) 5,000 5,000
13th month pay 45,000 P30,000 15,000
Other benefits 12,000 12,000
––––––––– –––––––– ––––––––
Totals P602,000 P30,000 P572,000
–––––––– –––––––– =========
Total Gross Compensation P572,000.00
Less: Personal exemption P50,000.00
Additional exemption (2 x P25,000) 50,000.00 100,000.00
––––––––– –––––––––––
Net Taxable compensation P472,000.00
–––––––––––
Tax Due *
250,000 P50,000.00
222,000 x 30% 66,600.00
––––––––––
116,600.00
Less: Tax withheld from previous months (Jan.-Nov.) 98,082.27
––––––––––
Tax to be collected in December 2009 P18,517.73
=========
* Tax Due is computed by using the rates prescribed in Sec. 24 (A), NIRC.
2. Mr. F
Compensation Received
For the Year Non-Taxable Taxable
Basic Salary P198,000 P198,000
13th month pay 16,500 P16,500
Other benefits 16,500 13,500 3,000 *
–––––––– –––––––– ––––––––
Totals P231,000 P30,000* P201,000
======= ======= =======
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Tax Due P14,700.00
Less: Tax withheld from previous months (Jan.-Nov.) 12,924.23
––––––––––
Amount to be withheld in December 2009 P1,775.77
=========
* Exempt from taxation per Sec. 32 (B) (7) (e) of the Tax
Code, as amended re: 13th month pay and other benefits not exceeding
P30,000.
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The annualized computation done for each employee shall be reflected by
the employer at the alphabetical list attached to BIR Form No. 1604-CF.
(3) Segregate the taxable fringe benefit and subject the same to
withholding pursuant to Subsection D of these section of the Regulations;
(1) Final withholding tax on Fringe Benefits paid to employees other than
rank and file. — There shall be imposed a final tax of 34% beginning January 1,
1998, 33% beginning January 1, 1999 and 32% beginning January 1, 2000 and
thereafter, on the grossed-up monetary value of fringe benefits pursuant to Sec. 33
of the Code and its implementing regulations, granted or furnished by the
employer to his employees (except rank and file employees) unless the fringe
benefit is required by the nature of or necessary to the trade, business or profession
of the employer, and when the fringe benefit is for the convenience and advantage
of the employer.
The fringe benefit tax shall be paid by the employer in the same manner as
provided in Sec. 2.58 of these Regulations. It shall not form part of the gross
income of the employee. The imposition of the fringe benefits tax should be the
subject of a separate set of rules and regulations which shall be issued for
the purpose.
The term "de minimis benefits" which is exempt from the fringe benefit tax
shall, in general, be limited to facilities or privileges (such as entertainment,
Christmas party and other cases similar thereto; medical and dental services; or the
so-called courtesy discount on purchases), furnished or offered by an employer to
his employees, provided such facilities or privileges are of relatively small value
and are offered or furnished by the employer merely as a means of promoting the
health, goodwill, contentment, or efficiency of his employees. LLpr
(H) Non-deductibility of Tax and Credit for Tax Withheld. — The tax
deducted and withheld at source on compensation income shall neither be allowed
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as a deduction from the employer's gross income nor from the recipient's gross
compensation income. The entire amount of the compensation from which the tax
is withheld shall be included in gross income to be reported in the return required
to be made by the recipient of the income without deduction for such tax. The
creditable tax withheld at source, however, is allowable as a credit against the tax
imposed by the NIRC to the recipient of the income. Any excess of the tax
withheld at source, over the tax ascertained to be due on the income tax return
shall be refunded or automatically credited, at the taxpayer's option, to the
recipient of the income. Such refund or credit shall be without prejudice to
whatever adjustments may be proper after field investigation or upon information
relative to the taxpayer's income tax liability under the main provisions of the
Code, as amended. If the tax has actually been withheld at source, a credit or a
refund shall be made to the recipient of the income even though such withheld tax
has not been paid to the government by the employer. For the purpose of the
credit, the recipient of the income is the person subject to tax, on whose
compensation the tax was withheld. cdtai
Any excess of the tax which was withheld on compensation over the tax
due from the taxpayer shall be returned not later than July 15 of the following
year. Refunds made after such time shall earn interest at the rate of six percent
(6%) per annum, starting after the lapse of the three month period up to the date
when the refund is made.
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regardless of status are entitled to P50,000 personal
exemption.
The husband shall be the proper claimant of the additional exemption for
qualified dependent children unless he explicitly waives his right in favor of his
wife in the Application for Registration (BIR Form No. 1902) or in the Certificate
of Update of Exemption and of Employer's and Employee's Information (BIR
Form No. 2305), whichever is applicable: Provided, however, that where the
spouse of the employee is unemployed or is a non-resident citizen deriving income
from foreign sources, the employed spouse within the Philippines shall be
automatically entitled to claim the additional exemptions for children.
If the taxpayer dies during the taxable year, his estate may still claim
the personal and additional exemptions for himself and his dependent(s) as if
he died at the close of such year. If the spouse or any of the dependents dies or
if any of such dependents marries, becomes twenty-one (21) years old or
becomes gainfully employed during the taxable year, the taxpayer may still
claim the same exemptions as if the spouse or any of the dependents died, or
as if such dependents married, became twenty-one (21) years old or became
gainfully employed at the close of such year. Provided, that in 2008, the
pro-rated personal and additional exemptions shall apply as stated in the
regulations.
EXAMPLE X: Mr. M got married on July 20, 2008, when his girlfriend
was four (4) months pregnant. On December 26, 2008, the wife gave birth to
twins. Earnings from January 1 to July 5, 2008 is P150,000.00 and for the rest of
2008, he earned P200,000.00 more. The tax due for 2008 is computed as follows:
(A) Employee. —
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wife shall claim full additional exemption for children in the following cases:
(6) Required forms and attachments. — Upon filing the Application for
Registration (BIR Form No. 1902) or Certificate of Update of Exemption and of
Employer's and Employee's Information (BIR Form No. 2305), whichever is
applicable, the taxpayer is required to attach any of the following documents to
establish the status of the taxpayer, if applicable, to the application:
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are not available.
(C) Procedures for the filing of the Application for Registration (BIR
Form No. 1902) —
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(1) All employers shall require their employees to accomplish in triplicate
the Application for Registration BIR Form 1902 (Original copy - RDO;
Duplicate - employer; Triplicate - employee) described above as follows:
(2) The employer shall transmit all copies of the Application for
Registration (BIR Form No. 1902) or Certificate of Update of Exemption and
of Employer's and Employee's Information (BIR Form No. 2305), whichever is
applicable, (after accomplishing the portion of Employer's information of either
forms) to the RDO where the employer is registered within thirty (30) days
following its receipt from the employee. The RDO or his duly authorized
representative, where the employer is registered, shall receive and stamp the
three copies. The triplicate copy duly stamped received by the BIR shall be given
to the employee.
(3) The employer shall review the exemptions of the employees and shall,
in the computation of taxes required to be withheld on the compensation of
employees, apply the correct and applicable exemptions as provided in these
regulations.
(4) In case the husband waives his right to claim the additional
exemptions of children in favor of his wife, he shall accomplish a Sworn
Declaration and Waiver of Right to Claim Exemptions of Qualified
Dependent Child(ren) by the Husband (Annex "F") in accordance with the
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following procedures:
(b) Submit the waiver form together with the BIR Form No.
1902 to his employer within ten (10) days from employment,
for acknowledgment in the space provided for that purpose.
The employer of the wife shall, upon receipt of copy of the waiver form
duly acknowledged by the employer of the husband, start deducting additional
exemptions for children from the wife's income on the month when the employer
of the husband stopped deducting the exemptions of children from the husband's
income.
(c) The employed husband and wife shall apply the waiver in the
computation of their respective taxable income in the income
tax return required to be filed by them following the procedure
for filing the waiver under Section 2.79.1 (C)(4) of these
regulations, that is, the husband shall not deduct exemptions of
children from his compensation income because he has waived
the same (exemptions of children) in favor of his wife who will
now deduct said exemptions from her income in computing her
tax due.
Waiver exercised during the calendar year shall be made only once in a
calendar year and shall take effect for the present calendar year and succeeding
year/s until revoked by the husband. Any waiver/revocation of such waiver shall
take effect only starting the succeeding calendar year. In no case should an
employer of the wife deduct exemptions of children from the wife's income unless
the waiver by the husband has been duly acknowledged by the employer of the
husband.
(B) In general, taxes shall be withheld from the wages of the wife in
accordance with the schedule for a married person without any
qualified dependent.
(A) Employer. —
(1) In general, the employer shall be responsible for the withholding and
remittance of the correct amount of tax required by deducting and withholding
from the compensation income of his employees. If the employer fails to withhold
and remit the correct amount of tax, such tax shall be collected from the employer
together with the penalties or additions to the tax otherwise applicable.
(2) The employer who is required to collect, account for and remit any tax
imposed by the NIRC, as amended, who willfully fails to collect such tax, or
account for and remit such tax or willfully assist in any manner to evade any
payment thereof, shall in addition to other penalties, provided for in the Code, as
amended, be liable, upon conviction, to a penalty equal to the amount of the tax
not collected nor accounted for or remitted. Cdpr
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(C) Additions to Tax. —
(a) Failure to file any return and pay the tax due thereon as
required under the provisions of the Code or these regulations
on the date prescribed; or
(c) Failure to pay the deficiency tax within the time prescribed for
its payment in the notice of assessment; or
(d) Failure to pay the full or part of the amount of tax shown on
any return required to be filed under the provisions of the Code
or these regulations, or the full amount of tax due for which no
return is required to be filed, or before the date prescribed for
its payment; or
(e) In case of willful neglect to file the return within the period
prescribed by the Code or regulations, or in case a false or
fraudulent return is willfully made, the penalty to be imposed
shall be fifty percent (50%) of the deficiency tax, in case any
payment has been made on the basis of such return before the
discovery of the falsity or fraud.
(3) Deficiency Interest — Any deficiency in the basic tax due, as the term
is defined in the Code, shall be subject to the interest prescribed in paragraph (a)
hereof, which interest shall be assessed and collected from the date prescribed for
its payment until the full payment thereof. Cdpr
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If the withholding agent is the government or any of its agencies, political
subdivisions, or instrumentalities or a government-owned or controlled
corporation, the employee thereof responsible for the withholding and remittance
of tax shall be personally liable for the surcharge and interest imposed herein.
(D) Failure to File Certain Information Returns (Sec. 250 of the Code). —
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).
(1) Failure to file return, supply correct and accurate information, pay
tax, withhold and remit tax and refund excess tax withheld on compensation (Sec.
255 of the Code). — Any person required under the Code, as amended, or by
regulations to pay any tax, make a return, keep any record/s, or supply correct and
accurate information, who willfully fails to pay such tax, make such return, keep
any record/s, or supply 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, shall in addition to the other penalties provided by law,
upon conviction thereof, be fined not less than ten thousand pesos (P10,000) and
imprisonment of not less than one (1) year but not more than the (10) years.
(a) Those who fail or cause the failure to deduct and withhold any
internal revenue tax under any of the withholding tax laws and
implementing regulations;
(b) Those who fail or cause the failure to remit taxes deducted and
withheld within the time prescribed by law, and implementing
regulations; and
(c) Those who fail or cause the failure to file a return or statement
within the time prescribed, or render or furnish a false or
fraudulent return or statement required under the withholding
tax laws and regulations.
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If the person required to withhold and pay the tax is a corporation, the
return shall be made in the name of the corporation and shall be signed and
verified by the president, vice-president, or authorized officers.
Employers of MWEs are still required to issue BIR Form No. 2316
(June 2008 Encs version) to the MWEs on or before January 31 of the
following year.
The employer shall furnish each employee with the original and duplicate
copies of BIR Form No. 2316 showing the name and address of the employer;
employer's TIN; name and address of the employee; employee's TIN; amount of
exemptions claimed amount of premium payments on health and/or
hospitalization insurance not exceeding P2,400.00, if any; the sum of
compensation paid including the non-taxable benefits; the amount of statutory
minimum wage received by MWEs; Overtime pay, holiday pay, night shift
differential pay and hazard pay received by MWEs; the amount of tax due; the
amount of tax withheld during the calendar year and such other information as
may be required. The statement must be signed by both the employer or other
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authorized officer and the employee, and shall contain a written declaration that it
is made under the penalties of perjury. If the employer is the Government of the
Philippines, its political subdivision, agency or instrumentality or
government-owned or controlled corporation, the statement shall be signed by the
duly designated officer or employee.
The employee who is qualified for substituted filing of income tax return
under these regulations shall no longer be required to file income tax return (BIR
Form No. 1700) since BIR Form No. 1604-CF with alphalists of employees shall
be considered a substituted return filed by the employer. BIR Form No. 2316, duly
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certified by both employee and employer, shall serve the same purpose as if a BIR
Form No. 1700 had been filed, such as proof of financial capacity for purposes of
loan, credit card, or other applications, or for the purpose of availing tax credit in
the employee's home country and for other purposes with various government
agencies. This may be used for purposes of securing travel tax exemption, when
necessary.
(3) (a) Taxable 13th month pay/other benefits for the rank and file
employees
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(4) Non-taxable 13th month pay/other benefits (Present employer)
(10) Tax withheld by all present employers for the calendar year;
and
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Benefit Tax;
In cases where any withholding agent does not have its own internet
facility or unavailability of commercial establishments with internet
connection within the location of the withholding agent, the alphalist
prescribed herein may be electronically mailed (e-mail) thru the e-lounge
facility of the nearest revenue district office or revenue region of the BIR.
The following individuals, however, are not qualified for substituted filing
and therefore, still required to file BIR Form No. 1700 in accordance with existing
regulations:
In case of married individuals who are still required to file returns under
existing provisions of the law, i.e., in those instances not covered by the
substituted filing of returns, only one return for the taxable year shall be filed by
either spouse to cover the income of the spouses, which return shall be signed by
the husband and wife unless it is physically impossible to do so, in which case
signature of one of the spouses would suffice.
Employees not qualified for substituted filing but are required to file
the Income Tax Return shall file the same not later than April 15 of the year
immediately following the taxable year. Provided, that employees with
previous/successive employer/s within the taxable year shall furnish their new
employer with BIR Form No. 2316 issued by the previous employer/s.
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SECTION 2.83.7. Extension of Time for Furnishing Statements to
Employee. — An extension of time, not exceeding thirty (30) days, within
which to furnish the Certificate of Income Tax Withheld on Compensation (Form
No. 2316) required by Sec. 2.83 of these Regulations upon termination of
employment is hereby granted to any employer with respect to any employee
whose employment is terminated during the calendar year. In the case of
intermittent or interrupted employment where there is a reasonable expectation on
the part of both employer and employee or further employment, there is no
requirement that an employee's withholding statement be immediately furnished
the employee; but when such expectation cease to exist, the statement must be
furnished within thirty (30) days from the date of termination of employment. The
extension mentioned under this Section refers to extension of time for furnishing
the Certificate of Income Tax Withheld on Compensation (Form No. 2316) upon
termination of employment.
In general, value-added tax due on the sale of goods and services are not
subject to withholding since the tax is not determinable at the time of sale.
However, gross payments to non-residents by both government and private
entities for services rendered in the Philippines shall be subject to final
withholding tax at the rate of 10% to be filed and paid using BIR Form No.
1600 — Monthly Remittance Return of Value-Added Tax and Other
Percentage Taxes Withheld.
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agents shall accomplish the Monthly Remittance Return of Value Added tax and
Other Percentage Taxes Withheld (BIR Form No. 1600) in triplicate copies with
Monthly Alphalist of Payees (MAP), the tax base and the amount withheld paid
upon filing the return with the authorized agent banks under the jurisdiction of the
Revenue District Office (RDO)/Large Taxpayers District Office (LTDO) where
the withholding agent is required to register and file the return. In places where
there is no authorized agent bank, the return shall be filed directly with the
Revenue Collection Officer or the duly authorized Municipal/City treasurer of the
Revenue District Office where the withholding agent is required to register or file
the return, except in cases where the Commissioner otherwise permits.
(a) Fails or causes the failure to deduct and withhold any internal
revenue tax covered by these regulations;
(b) Fails or causes the failure to remit the taxes deducted and
withheld within the time prescribed therein;
(c) Fails or causes the failure to file the return or issue certificate
required.
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(1) Persons exempt from value-added tax (VAT). — On gross
payments to persons who are exempt under Sec. 109 (z)
of the Code from payment of value-added tax and who is not a
VAT registered person except payment to cooperatives —
Three percent (3%) Cdpr
(4) Franchises —
(b) On dividends 0%
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paid;
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(b) Cabarets, night and day clubs — Eighteen percent (18%)
(a) Fails or causes the failure to deduct and withhold any internal
revenue tax covered by these regulations;
(b) Fails or causes the failure to remit the taxes deducted and
withheld within the time prescribed therein;
(c) Fails or causes the failure to file the return or issue certificate
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required.
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opting to file under the substituted filing of percentage tax return. A copy of
the said Notice shall be furnished the lone payor of the income. Moreover,
BIR Form No. 2306 (Certificate of Final Tax Withheld at Source-March 2003
version), duly signed by both the payor and the payee, shall be attached to the
duly filed BIR Form No. 1600 and shall constitute as the authority given by
the payee to the payor to file and consider the payor's duly filed BIR Form
1600 as the substituted percentage tax return of the payee. The duly filed or
stamped "Received" BIR Form 2306 shall serve the same purpose as the
percentage tax return (BIR Form 2551M) of the payee. Accordingly, a
taxpayer availing of the Substituted Filing of Percentage Tax Return shall
update his registration data with his Home RDO.
On the other hand, if the payee has more than one payor, the
percentage tax withheld and remitted by the payor under BIR Form No. 1600
shall be treated as creditable tax by the payee when he files the monthly
percentage tax return under BIR Form No. 2551M. The claimed tax credit
shall be evidenced by BIR Form No. 2307 (Certificate of Creditable Tax
Withheld at Source-March 2003 version) duly executed and signed by both
the payor and the payee attesting to the correctness of the figures reflected
therein. Since the percentage tax has already been withheld at source based
on gross amount and remitted by the payors under BIR Form No. 1600, the
Percentage Tax Return (BIR Form No. 2551M) to be filed by the payee which
will not be reflecting any amount payable, shall just serve as a return
consolidating all the transactions with all the payors which have already been
subjected to withholding tax and which return (BIR Form No. 2551M) shall
be filed directly with the appropriate BIR office without the need of passing
through an Accredited Agent Bank (AAB) or Revenue Collection Officer
(RCO). Nonetheless, in case the total amount of tax withheld by the payors
who are engaged in business is incorrect or the payee has transactions with
payors who are not engaged in business and therefore not obliged to withhold,
the percentage tax return (BIR Form No. 2551M) of the payee which will be
reflecting an amount payable shall be filed with the AAB or the RCO, in the
absence of an AAB, of the Revenue District Office that has jurisdiction over
the taxpayer-payee.
Provided, further that, if at any time of the year, the accumulated gross
sales or gross receipts exceed P550,000, the income recipient-payee shall
change its/his registration with the BIR from Non-VAT to VAT within one
month from the close of the month when the threshold amount was reached.
Such payee shall become VAT-registered taxpayer starting the first day of the
month following the month of his VAT registration. Accordingly, notification
to the payors of income shall be made with respect to such change in
"taxpayer classification" of the payee. Change in the tax type and rate of
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withholding shall correspondingly be made by the income payor.
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or services by persons subject to 3% percentage tax under Section 116 of the
Code, whose gross sales or receipts have already been subjected to the
withholding of the 3% percentage tax by the lone payor, the payee shall no
longer be required to file the monthly percentage tax return (BIR Form No.
2551M) with respect to such receipts. The BIR Form No. 1600 duly filed by
the payor serves as the substituted return of the payee with lone payor
provided that the BIR Form No. 2306 duly executed and signed by both the
payor and the payee is attached to the filed BIR Form No. 1600.
(E) Regular Percentage Tax Return. — Payees with several payors are
still required to file the regular percentage tax return reflecting therein the
consolidated total of all the taxable transactions for the taxable period and
applying as tax credit the taxes withheld by several payors evidenced by the
duly issued BIR Form No. 2307 which must be attached to the Percentage Tax
Return (BIR Form No. 2551M). If all the transactions reflected/consolidated
in the Percentage Tax Return (BIR Form No. 2551M) are with several payors
who are engaged in business and therefore have been subjected to the 3%
withholding tax, the Percentage Tax Return will no longer reflect any tax
payable but will just be a simple consolidation of all the taxable transactions
for a given taxable period which may be filed directly with the appropriate
BIR office and thus need not pass through any AAB or collecting RCO.
Nonetheless, in case the total amount of tax withheld by the payors who are
engaged in business is incorrect or the payee has transactions with payors
who are not engaged in business and therefore not obliged to withhold the
tax, the percentage tax return (BIR Form No. 2551M) of the payee which will
be reflecting an amount payable shall be filed with the AAB or the RCO, in
the absence of an AAB, of the Revenue District Office that has jurisdiction
over the taxpayer-payee.
(G) The Option to Remit the Tax under the Withholding Tax System and
the Option to Avail of the Substituted Filing of the Percentage Tax Return. —
The option to remit the Percentage Tax under the withholding system once
chosen remains as the manner of remitting the tax unless said option is
cancelled by the payee (Annex F). Meanwhile, the option to file under the
Substituted Filing of the Percentage Tax Return allowed to a payee with just
one payor in a given taxable year shall continue to apply to subsequent
taxable years until such time that the taxpayer-payee files the "Notice of
Cancellation of Availment of the Substituted Filing of Return" (Annex D) not
later than the 10th day of the month following the close of taxpayer's taxable
year which shall automatically revert said taxpayer to the status of taxpayers
filing the returns under the regular filing procedures. If within the taxable
year, an additional client or customer comes in, the taxpayer-payee shall
immediately file the 'Notice of Cancellation of Availment of the Substituted
Filing of Returns'.
On the other hand, even if the payee has more than one payor but has
executed the "Waiver of the Privilege to Claim VAT Input Tax Credits"
(Annex C), and the "Notice of Availment of the Option to Pay the Tax
through the Withholding Process" (Annex E), copy-furnished the payors, the
RDOs of both the payors and the payee, said payors are mandatorily required
to withhold the 10% VAT which value-added tax shall be withheld and
remitted by the payor using BIR Form No. 1600. Under this instance, the
VAT withheld shall be treated as creditable tax by the payee when he files the
quarterly value-added tax return under BIR Form No. 2550Q. The claimed
tax credit shall be evidenced by BIR Form No. 2307 (Certificate of Creditable
Tax Withheld at Source-March 2003 version) duly executed and signed by
both the payor and the payee attesting to the correctness of the figures
reflected therein. Since the value-added tax has already been withheld at
source based on gross amount in pursuance of the waiver of the right to claim
input VAT (Annex C) executed by the payee and remitted by the payors
under BIR Form No. 1600, the Value-added Tax Return (BIR Form No.
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2550Q) to be filed by the payee which will not be reflecting any amount
payable shall just serve as a return consolidating all the transactions with all
the payors which have already been subjected to withholding tax and which
return shall be filed directly with the appropriate BIR office without the need
of passing through an Accredited Agent Bank (AAB) or Revenue Collection
Officer (RCO). Considering that under an instance where all the payors who
are engaged in business have already withheld and remitted the 10% VAT as
withholding agents of the payee the latter will no longer be remitting any
single amount of tax, the requirement of filing the monthly VAT Declaration
(BIR Form No. 2550M) by the payee shall be dispensed with. Nonetheless, in
case the total amount of tax withheld by the payors who are engaged in
business is incorrect or the payee has transactions with payors who are not
engaged in business and therefore not obliged to withhold the tax, the
monthly VAT Declaration (BIR Form No. 2550M) and the quarterly VAT
Return (BIR Form No. 2550Q) of the payee which will be reflecting an
amount payable shall still be filed with the AAB or the RCO, in the absence of
an AAB, of the Revenue District Office that has jurisdiction over the
taxpayer-payee.
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In case of a payee whose all transactions are with payors who are
engaged in business and who have subjected the transactions to the
withholding of the 10% VAT, the payee is no longer required to file the
monthly VAT Declaration (BIR Form No. 2550M).
Nonetheless, in case the total amount of tax withheld by the payors who
are engaged in business is incorrect or the payee has transactions with payors
who are not engaged in business and therefore not obliged to withhold the
tax, the Monthly Value-added Tax Declaration (BIR Form No. 2550M) and
the Quarterly Value-added Tax Return (BIR Form No. 2550Q) of the payee
which will be reflecting an amount payable shall be filed with the AAB or the
RCO, in the absence of an AAB, of the Revenue District Office that has
jurisdiction over the taxpayer-payee.
(G) The Option to Remit the Tax under the Withholding Tax System and
the Option to Avail of the Substituted Filing of the VAT Return. — The option
to remit the VAT under the withholding system once chosen remains as the
manner of remitting the tax unless said option is cancelled by the payee
(Annex F). Meanwhile, the option to file under the Substituted Filing of the
VAT Return allowed to payee with just one payor in a given taxable year
shall continue to apply to subsequent taxable years until such time that the
taxpayer-payee files the "Notice of Cancellation of Availment of the
Substituted Filing of Return" (Annex D) not later than the 10th day of the
month following the close of taxpayer's taxable year which shall automatically
revert said taxpayer to the status of taxpayers filing the returns under the
regular filing procedures. If within the taxable year, an additional client or
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customer comes in, the taxpayer-payee shall immediately file the 'Notice of
Cancellation of Availment of the Substituted filing of Returns'.
Recommending Approval:
(SGD.) LIWAYWAY
VINZONS-CHATO
Commissioner of Internal Revenue
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