Faqs Withholding Tax

Frequently Ask Questions about Withholding tax:
1. What is a Withholding Tax?

A withholding tax is a tax that is collected at the time when the income is paid. The
person or the organization that pays the income is given the responsibility of withholding the tax
from the income payments and remitting it to government. (Revenue Regulations No.2-98)
2. What are the types of Withholding Taxes?
According in Revenue Regulations-No.2-98, there are two main classifications or types
of withholding tax. These are:
a) Creditable Withholding Tax
- Withholding Tax on Compensation
- Expanded Withholding Tax
- Withholding of Business Tax (VAT and Percentage)
b) Final Withholding Tax
3. Who are required to file withholding taxes?
According in Revenue Regulations-No.2-98, the following persons are designated as
withholding agents. They are required to withhold a tax on specified income payments that they
make:
o Corporations, association, partnerships, non-profit organizations, cooperatives, and other
entities registered with the Securities and Exchange Commission and other government
agencies mandated to register such entities.
o An individual who is engaged in business.
o An individual who purchases a piece of real property.
o All government offices including government-owned or controlled corporations.
4. Who are required to pay and what are the necessary attachments in filing withholding
taxes?
As stated in Revenue Regulations No.2-2015, Section 2. Mandatory submission of
summary Alphalist of withholding agents of income payments Subjected to Creditable
Withholding Taxes (SAWT) by the payee/income recipient and of Monthly Alphalist of Payees
(MAP) subjected to withholding tax by the withholding agent/income payor as attachment to
their filed returns.
5. When should a tax be withheld?
The tax should be withheld when income is paid or becomes payable, whichever comes
first. The term "payable" refers to the date when the obligation becomes due, demandable or
legally enforceable. Thus, the obligation to withhold a tax starts on the date when the salary of an
employee is payable, and not on the date when it is actually paid. (Sec.2.57.4, Revenue
Regulations No. 12-2001, the Withholding Taxes Regulations, Appendix I)
6. Who are the taxpayers remain to be regular withholding agents?
According in Revenue Memorandum Circular No.48-2013, those who are engaged in
business or practice of profession, including political parties and party list groups, remain to be
regular withholding agents; their registration with the BIR as special withholding agents under
the just concluded midterm elections automatically ended last June 12, 2013.
7. What is the responsibility of withholding agents with respect to the taxes that have been
withheld?
o In General:
The withholding agent must remit the taxes to the BIR through a bank which has been
authorized by the Revenue District Office (RDO) where the business has its residence.
A withholding tax return must be filed and the taxes should be paid within 10 days after
the end of each month. Taxes which were withheld in December should be paid on or before
January 25 of the following year.
o Special Cases:
1. Withheld taxes on interest from bank deposits and yield or any other monetary benefit
from Deposit substitutes, trust funds and similar arrangements should be paid within twenty five
(25) days from the close of each calendar quarter. The tax return should also be filed within the
said date.
2. Withheld taxes from "Large taxpayers" should be made within twenty five (25) days
after the end of each month. Payment must be made with the branch of the Land Bank of the
Philippines or Development Bank of the Philippines which is located at the BIR National Office.
(Revenue Regulations No. 2-98)
8. What is the liability of the withholding agent who fails to withhold the required tax?
The withholding agent is liable for the withholding tax that should have been collected, in
addition to the penalties i.e. a 25% surcharge and 20% interest on the total amount due.
In addition, he cannot claim a deduction for income payment which he made unless the
taxes were withheld and paid to the BIR. (Revenue Regulations No. 2-98)
9. What is the Nature of withholding Agents liability?
The withholding agent is directly and independently liable for the correct amount of the
tax should be withheld from the income.
The duty to withhold tax us different from the duty to pay income tax, the former being
imposed on the withholding agent or person (Sec.22 (A) required to deduct and withhold any tax
under the provision of Section 57 and not upon the taxpayer (Comm. VS.. Malayan Ins. Co., L21713, Nov. 18, 1967)
In the operation of the withholding tax system, the payee is the taxpayer, the person on
whom the tax is imposed, while the payor, a separate entity, acts no more than an agent of the
government for the collection of the tax in order to ensure its payment.
10. What is Withholding of Creditable Tax?
Taxes withheld on certain income payments are intended to equal or at least approximate
the tax due from the payee on said income. (Sec.57 of the National Internal Revenue Code
(NIRC)
11. What are the requirements of Withholding?
Every employer making payment of wages shall deduct and withhold upon such wages a
tax determined in accordance with the rules and regulations to be prescribed by the Secretary of
Finance, upon recommendation of the Commissioner: Provided, however, that no withholding of
a tax shall be required where the total compensation income of an individual does not exceed the
statutory minimum wage, or whichever is higher.
12. What rate shall be subject to a creditable withholding tax?
According in Revenue Memorandum Circular No.48-2013, income payments made by
political parties and candidates of local and national elections of all their purchase of goods and
services as campaign expenditures, and income payments made by individuals or juridical
persons for their purchases of goods and services intended to be given as campaign contribution
to political parties and candidates shall be subject to a creditable withholding tax at the rate of
five percent (5%).
13. What are the exemptions in income payment of creditable withholding tax?
Under Revenue No.2-98, prescribed in these Regulations shall not apply to income
payments made to the following:
(A) National government and its instrumentalities, including provincial, city or municipal
governments;
(B) Persons enjoying exemption from payment of income taxes pursuant to the provisions
of any law, general or special, such as but not limited to the following:
(1) Sales of real property by a corporation which is registered with and certified
by the Housing and Land Use Regulatory Board (HLURB) or HUDCC as engaged in socialized
housing project where the selling price of the house and lot or only the lot does not exceed one
hundred eighty thousand pesos (P180,000) in Metro Manila and other highly urbanized areas and
one hundred fifty thousand pesos (P150,000) in other areas or such adjusted amount of selling
price for socialized housing as may later be determined and adopted by the HLURB, as provided
under Republic Act No. 7279 and its implementing regulations;
(2) Corporations registered with the Board of Investments and enjoying
exemption from the income tax provided by Republic Act No. 7916 and the Omnibus Investment
Code of 1987;
(3) Corporations which are exempt from the income tax under Sec. 30 of the
NIRC, to wit: the Government Service Insurance System (GSIS), the Social Security System
(SSS), the Philippine Health Insurance Corporation (PHIC), the Philippine Charity Sweepstakes
Office (PCSO) and the Philippine Amusement and Gaming Corporation (PAGCOR); However,
the income payments arising from any activity which is conducted for profit or income derived
from real or personal property shall be subject to a withholding tax as prescribed in these
regulations.
14. Is an expense deducted considered to utilize campaign funds?
According in Revenue Memorandum Circular No.48-2013, Expenses from which the 5%
creditable withholding tax were not deducted, remitted or reported as herein required are not
considered utilized campaign funds for purposes of Section I Income Tax.
15. Is there a distinction between the donations/contributions or personal funds?
According in Revenue Memorandum Circular No.48-2013, the obligation to withhold 5%
is uniform in both payments for goods and services and, likewise, there is no distinction whether
the source is through donations/contributions or from the personal funds of the payor, or
elsewhere.
16. What are the services that covered by the Creditable Withholding Tax?
According in Revenue Memorandum Circular No.48-2013, payments for various media
services, printing jobs, talent/entertainment fees, rentals of both real and personal property and
the like are among those covered by the CWT herein.
17. Who are required to remit the 5% Creditable Withholding Tax?
According in Revenue Memorandum Circular No.48-2013, whether or not a
candidate/payor/withholding agent is engaged in business or practice of profession, he/she/it is a
regular tax filer and, thus, required to remit the 5% CWT, along with the other CWT, not later
than the 10th day of the month following the month of payment/disbursement, using BIR Form
No. 1601-E through the authorized agent banks (AABs) or Revenue Collection Officers (RCOs)
under the jurisdiction of the BIR office where the withholding agent is registered.
18. What is Withholding Tax on Compensation?
Withholding Tax on Compensation is the tax withheld from income payments to

individuals arising from an employer-employee relationship. (Sec.57-58 &78-83 of the National
International Revenue)
19. What BIR form used in Withholding Tax on Compensation?
The BIR Form of 1601-C is Monthly Remittance Return of Income Taxes Withheld on
Compensation (Revenue Regulations No. 1-2013)
20. What period is covered in Withholding Tax on Compensation?
January to November (Revenue Memorandum Circular 23-2008)
21. Who Are Required To File of Monthly Remittance of Taxes Withheld on
Compensation?
Every registered withholding agent on compensation, which includes, but not limited to
the following:
1) Individuals engaged in business or practice of profession with employees subject to
income tax
2) All Juridical persons (e.g., Corporations, general partnerships, associations, etc.) whether
or not engaged in business.
3) Government Agencies and Instrumentalities (e.g.,NGAs, GOCCs, etc.), including local
government units (LGUs) under Revenue Regulations No. 1-2013.
22. What are the Documentary Requirements/Attachments of Monthly Remittance of Taxes
Withheld on Compensation?
1) For amended return, proof of remittance and the return previously filed.
2) For those with advance payments, BIR Form No. 0605
3) For Private Sector, copy of the list of MWEs who received hazard pay submitted to the
DOLE Regional/Provincial Offices-Operations Division/Unit, for the return period March,
June, September and December, if applicable.
4) For Public Sector, copy of Department of Budget and Management (DBM) circular/s or
equivalent on MWEs allowed to receive hazard pay, for the return period March, June,
September and December, if applicable.
5) Electronic Tax Remittance Advice (eTRA) previously Tax Remittance Advice (TRA) for
National Government Agencies (NGAs) as required under DOF-DBM Joint Circular No. 12000A and RR 1-2013
23. What are the Procedures for Filing and Payment of Monthly Remittance of Taxes
1. Read instructions indicated in the tax return.
2. Accomplish correctly BIR Form No. 1601-C in triplicate copies.
3. If there is tax required to be remitted:

- Proceed to the nearest Authorized Agent Bank (AAB) of the Revenue District Office
(RDO) where you are registered or withholding agent is registered and present the duly
accomplished BIR Form No. 1601-C, together with the required attachments (if
applicable) and your payment.
- In places where there are no AABs, proceed to the Revenue Collection Officer or duly
Authorized City or Municipal Treasurer located within the Revenue District Office where
you are registered or withholding agent is registered and present the duly accomplished
BIR Form No. 1601- C, together with the required attachments (if applicable) and your
payment.
- Receive your copy of the duly stamped and validated form from the teller of the
AAB's/Revenue Collection Officer/duly Authorized City or Municipal Treasurer.
4. If there is no tax required to be remitted:
- Proceed to the Revenue District Office where you are registered or where the
withholding agent is registered and present the duly accomplished BIR Form No. 1601-C,
together with the required attachments.
- Receive your copy of the duly stamped and validated BIR Form from the RDO.
DOF-DBM Joint Circular No. 1-2000A and RR 1-2013
24. When is the deadline of Filing Via EFPS of Monthly Remittance of Taxes Withheld on
Compensation?
Group A - Fifteen (15) days following end of the month
Group B - Fourteen (14) days following end of the month
Group C - Thirteen (13) days following end of the month
Group D - Twelve (12) days following end of the month
Group E - Eleven (11) days following end of the month
Note: The staggered manner of filing is only allowed to taxpayers using the Electronic Filing and
Payment System (EFPS) based on the industry classification groupings per RR No. 26-2002.
However, the staggered filing of returns allowed for withholding agents/taxpayers enrolled in the
EFPS facility of the Bureau shall not apply in the case of the NGAs per RR 1-2013.
25. When is the deadline of Payment Via EFPS of Monthly Remittance of Taxes Withheld
on Compensation?
On or before the fifteenth (15th) day of the month following the month withholding was
made, except for taxes withheld for the month of December which shall be paid on or before
January 20 of the succeeding year.
Provided however that, in the case of NGAs, all returns must be electronically filed (efiled) and payment of the tax due must also be made on the same day the return is e-filed which
shall be on or before the 10th day following the month in which withholding was made, except
for taxes withheld for the month of December of each year, which shall be filed on or before
January 15 of the succeeding year. (RR 1-2013)
26. When is the deadline of Manual Filing and Payment of Monthly Remittance of Taxes
On or before the tenth (10th) day of the month following the month the withholding was
made, except for taxes withheld for the month of December which shall be filed and paid on or
before January 15 of the succeeding year under Revenue Regulations No. 1-2013
27. What is compensation?
It means any remuneration received for services performed by an employee from his
employer under an employee-employer relationship. (RR No.2-98)
28. What are the different kinds of compensation?
a) Regular compensation - includes basic salary, fixed allowances for representation,
transportation and others paid to an employee
b) Supplemental compensation - includes payments to an employee in addition to the
regular compensation such as but not limited to the following:
- Overtime Pay
- Fees, including director's fees
- Commission
- Profit Sharing
- Monetized Vacation and Sick Leave
- Fringe benefits received by rank & file employees
- Hazard Pay
- Taxable 13th month pay and other benefits
- Other remunerations received from an employee-employer relationship
29. What Compensation are exempted from Withholding Tax on?
1. Remuneration as an incident of employment, such as the following:
a. Retirement benefits received under RA 7641
b. Any amount received by an official or employee or by his heirs from the
employer due to death, sickness or other physical disability or for any cause
beyond the control of the said official or employee such as retrenchment,
redundancy or cessation of business
c. Social security benefits, retirement gratuities, pensions and other similar
benefits
d. Payment of benefits due or to become due to any person residing in the
Philippines under the law of the US administered by the US Veterans
Administration
e. Payment of benefits made under the SSS Act of 1954, as amended
f. Benefits received from the GSIS Act of 1937, as amended, and the retirement
gratuity received by the government official and employees
2. Remuneration paid for agricultural labor and paid entirely in products of the farm
where the labor is performed
3. Remuneration for domestic services
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. Payment for damages
7. Proceeds of 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 (not to exceed P 30,000)
12. GSIS, SSS, Medicare and other contributions
13. Compensation Income of Minimum Wage Earners (MWEs) with respect to their
Statutory Minimum Wage (SMW) as fixed by Regional Tripartite Wage and Productivity
Board (RTWPB)/National Wage and Productivity Commission (NWPC), including
overtime pay, holiday pay, night shift differential and hazard pay, applicable to the place
where he/she is assigned.
14. Compensation Income of employees in the public sector if the same is equivalent to
or not more than the SMW in the non-agricultural sector, as fixed by RTWPB/NWPC,
including overtime pay, holiday pay, night shift differential and hazard pay, applicable to
the place where he/she is assigned. (RR No.2-98)
30. What are the forms of compensation which are not subject to a withholding tax?
The following forms of compensation are tax-exempt, and are not subject to a
withholding tax:
1. Facilities or privileges with small value that are provided by the employee to promote
health, goodwill, contentment or efficiency of his employees.
2. Advances or reimbursements for travelling, representation and other ordinary and
necessary expenses that are incurred by the employee in the performance of his duties, if
he is required to account for or liquidate the said expenses. (The excess of actual
expenses over advances made by the employer is treated as taxable income if not returned
to the employer).
3. The monetized values of unutilized vacation leave credits of ten (10) days or less which
was paid to the employee during the year.
4. GSIS, SSS, Medicare and Pag-ibig contribution and union dues of individual employees.
1. Thirteenth (13th) month pay and other benefits such as Christmas bonus, productivity
incentive bonus, loyalty awards, gifts and other benefits of similar nature if their total amount is
P30,000 or less. (RR No.2-98)
31. When should the employer withhold the tax on compensation?
The tax should be withheld when the employee has paid his salary. There are prescribed
tables by the BIR to guide employers on how to compute the withholding tax. (RR No.2-98)
32. Should employers withhold an income tax from all forms of compensation that are paid
to employees?
In general, a withholding of tax is collected from all forms of compensation income that is
earned from the Philippines.
However, an exemption is given to an employee whose salary is equal to the statutory
minimum wage .He is not exempt from filing an income returns every year. The same individual
can waive this exemption by filling out a BIR form. His income would be subject to a
withholding tax and he is exempt from filing an income tax return annually. (RR No.2-98)
33. Is the withholding tax on compensation final or creditable in nature?
The withholding tax on compensation is creditable. The employee is required to file an
income tax return where he should report all the incomes that he received during the year,
including those payments where a tax had been withheld. He can claim tax credit equal to the
amount of withheld taxes. This means that he can deduct the tax that was withheld from his
salary from the income which is due from him.
For an employee with a single employer, the BIR has made the withholding tax simple. The
amount of tax which is withheld from him is equal to the amount of his income tax for the year.
(RR No.2-98)
34. What is Wages?
Under Sec 78 of National Internal Revenue Code, the term wages mean all
remuneration (other than fees paid to a public official) for services performed by an employee for
his employer, including the cash value of all remuneration paid in any medium other than cash,
except that such term shall not include remuneration paid:
1. For agricultural labor paid entirely in products of the farm where the labor is
performed, ore
2. For domestic service in a private home, or
3. For casual labor not in the course of the employers trade or business, or
4. For services by a citizen or resident of the Philippines for a foreign government or an
international organization
35. What is Payroll period?
Under Sec 78 of National Internal Revenue Code, the term payroll period means a
period for which payment of wages is ordinarily made to the employee by his employer,
36. What is Miscellaneous Payroll period?

Under Sec 78 of National Internal Revenue Code, the term miscellaneous payroll period
means a payroll period other than a daily, weekly, biweekly, semi-monthly, monthly, quarterly,
semi-annual, or annual period.
37. What is an Employee?
Under Sec 78 of National Internal Revenue Code, the term employee refers to any
individual who is the recipient of wages and includes an officer, employee or elected official
38. What is an Employer?
Under Sec 78 of National Internal Revenue Code, the term employer means the person
for whom an individual performs or performed any service, of whatever nature, as the employee
of such person, except that:
1. If the person for whom the individual performs or performed ant service does not have
control of the payment of the wages for such services, the term employer (except for the
purpose of Subsection (A) means the person having control of the payment of such wages; and
2. In the case of a person paying wages on behalf of a non-resident alien individual,
foreign partnership corporation not engage in trade or business within the Philippibes, the term
employer (except for the purpose of Subsection (A) means such person
39. What is De Minimis Benefits?
According in Revenue Regulations No. 1-2015, De Minimis benefits are facilities or
privileges furnished or offered by an employee that are of relatively small value and are offered
or furnished by the employer as a means of promoting the health, goodwill, contentment of
efficiency of his employees.
40. What is the qualification to received De Minimis Benefits?
According to Revenue Regulations No. 1-2015, under Sec. 2.78.1 Withholding Tax on
Compensation Income, benefits received by an employee by virtue of a collective bargaining
agreement (CBA) and productivity incentive schemes provided that the total annual monetary
value received from both CBA and productivity incentives schemes combined do not exceed ten
thousand pesos (Php 10,000.00) per employee per taxable year.
41. What are those De Minimis Benefits not subject to withholding tax on compensation
income?
o According in Revenue Regulations No.10-2008,
a) Monetized unused vacation leave credits of employees not exceeding ten (10) days
during the year and the monetized value of leave credits paid to government officials and
employees;
b) Medical Cash allowance dependents of employees not exceeding P750.00 per
employee per semester or P125 per month;
o According in Revenue Regulations No. 5-2008, under Sec.2.78.1 Withholding Tax on
Compensation,
c) Rice subsidy of 1,500 or one (1) sack of 50 kg. rice per month amounting to not more
than 1,500.
o According in Revenue Regulations No.8-2012, under Sec.2-78.1 Withholding Tax on
Compensation,
d) Uniform and Clothing allowance not exceeding P5,000 per annum
o According in Revenue Regulations No.10-2008,
e) Actual yearly medical benefits not exceeding P10,000 per annum;
f) Laundry allowance not exceeding P300.00 per month;
g)Employees achievement awards, e.g., for length of service or safety achievement,
which must be in the form of a tangible personal property other than cash or gift
certificate, with an annual monetary value not exceeding P10,000 received by the
employee under an established written plan which does not discriminate in favor of
highly paid employees;
h) Gifts given during Christmas and major anniversary celebration not exceeding P5,
000.00 per employee per annum;
i) Flowers, Fruits, books or similar items given to employees under special
circumstances, e.g., on account of illness, marriage, birth of baby, etc; and
j) Daily meal allowance for overtime work and night/graveyard shift not exceeding
twenty-five percent (25%) of the basic minimum wage on a per region basis
42. What other benefits are subjected to tax?
According in Revenue Regulations No.10-2008, the excess of the de minimis benefits
over their respective ceilings prescribed by these regulations shall be considered as part of other
benefits and the employee receiving it will be subject to tax only on the excess over the
P30,000.00 ceiling.
43. What is Fringe Benefits?

Under Revenue Regulations No. 03-98, fringe benefit means any good, service, or other
benefit furnished or granted by an employer in cash or in kind, in addition to basic salaries, to an
individual employee.
44. What are those Fringe Benefits not subject to withholding tax on compensation
income?
o Under Revenue Regulations No. 03-98,
(1)
Housing;
(2)
Expense account;
(3)
Vehicle of any kind;
(4)
Household personnel, such as maid, driver and others;
(5)
Interest on loan at less than market rate to the extent of the difference between the
market rate and actual rate granted;
(6)
Membership fees, dues and other expenses borne by the employer for the
employee in social and athletic clubs or other similar organizations;
(7)
Expenses for foreign travel;
(8)
Holiday and vacation expenses;
(9)
Educational assistance to the employee or his dependents; and
(10)
Life or health insurance and other non-life insurance premiums or similar
amounts in excess of what the law allows.
For this purpose, the guidelines for valuation of specific types of fringe benefits and the
determination of the monetary value of the fringe benefits are given below. The taxable value
shall be the grossed-up monetary value of the fringe benefit.
(1)
Housing privilege
(a)
If the employer leases a residential property for the use of his employee
and the said property is the usual place of residence of the employee, the value of
the benefit shall be the amount of rental paid thereon by the employer, as
evidenced by the lease contract. The monetary value of the fringe benefit shall be
fifty per cent (50%) of the value of the benefit.
(b)
If the employer owns a residential property and the same is assigned for
the use of his employee as his usual place of residence, the annual value of the
benefit shall be five per cent (5%) of the market value of the land and
improvement, as declared in the Real Property Tax Declaration Form, or zonal
value as determined by the Commissioner pursuant to Section 6(E) of the Code
(Authority of the Commissioner to Prescribe Real Property Values), whichever is
higher. The monetary value of the fringe benefit shall be fifty per cent (50%) of
the value of the benefit.
The monetary value of the housing fringe benefit is equivalent to the following:
MV = [5%(FMV or ZONAL VALUE] X 50%
WHERE:
MV = MONETARY VALUE
FMV = FAIR MARKET VALUE
(2)
(c)
If the employer purchases a residential property on installment basis and
allows his employee to use the same as his usual place of residence, the annual
value of the benefit shall be five per cent (5%) of the acquisition cost, exclusive of
interest. The monetary value of fringe benefit shall be fifty per cent (50%) of the
value of the benefit.
(d)
If the employer purchases a residential property and transfers ownership
thereof in the name of the employee, the value of the benefit shall be the
employer's acquisition cost or zonal value as determined by the Commissioner
pursuant to Section 6(E) of the Code (Authority of the Commissioner to Prescribe
Real Property Values), whichever is higher. The monetary value of the fringe
benefit shall be the entire value of the benefit.
(e)
If the employer purchases a residential property and transfers ownership
thereof to his employee for the latter's residential use, at a price less than the
employer's acquisition cost, the value of the benefit shall be the difference
between the fair market value, as declared in the Real Property Tax Declaration
Form, or zonal value as determined by the Commissioner pursuant to Sec. 6(E) of
the Code (Authority of the Commissioner to Prescribe Real Property Values),
whichever is higher, and the cost to the employee. The monetary value of the
fringe benefit shall be the entire value of the benefit.
(f)
Housing privilege of military officials of the Armed Forces of the
Philippines (AFP) consisting of officials of the Philippine Army, Philippine Navy
and Philippine Air Force shall not be treated as taxable fringe benefit in
accordance with the existing doctrine that the State shall provide its soldiers with
necessary quarters which are within or accessible from the military camp so that
they can be readily on call to meet the exigencies of their military service.
(g)
A housing unit which is situated inside or adjacent to the premises of a
business or factory shall not be considered as a taxable fringe benefit. A housing
unit is considered adjacent to the premises of the business if it is located within
the maximum of fifty (50) meters from the perimeter of the business premises.
(h)
Temporary housing for an employee who stays in a housing unit for three
(3) months or less shall not be considered a taxable fringe benefit.
Expense account
(a)
In general, expenses incurred by the employee but which are paid by his
employer shall be treated as taxable fringe benefits, except when the expenditures
are duly receipted for and in the name of the employer and the expenditures do
not partake the nature of a personal expense attributable to the employee.
(b)
Expenses paid for by the employee but reimbursed by his employer shall
be treated as taxable benefits except only when the expenditures are duly
(3)
receipted for and in the name of the employer and the expenditures do not partake
the nature of a personal expense attributable to the said employee.
(c)
Personal expenses of the employee (like purchases of groceries for the
personal consumption of the employee and his family members) paid for or
reimbursed by the employer to the employee shall be treated as taxable fringe
benefits of the employee whether or not the same are duly receipted for in the
name of the employer.
(d)
Representation and transportation allowances which are fixed in amounts
and are regular received by the employees as part of their monthly compensation
income shall not be treated as taxable fringe benefits but the same shall be
considered as taxable compensation income subject to the tax imposed under Sec.
24 of the Code.
Motor vehicle of any kind
(a)
If the employer purchases the motor vehicle in the name of the employee,
the value of the benefit is the acquisition cost thereof. The monetary value of the
fringe benefit shall be the entire value of the benefit, regardless of whether the
motor vehicle is used by the employee partly for his personal purpose and partly
for the benefit of his employer.
(b)
If the employer provides the employee with cash for the purchase of a
motor vehicle, the ownership of which is placed in the name of the employee, the
value of the benefits shall be the amount of cash received by the employee. The
monetary value of the fringe benefit shall be the entire value of the benefit
regardless of whether the motor vehicle is used by the employee partly for his
personal purpose and partly for the benefit of his employer, unless the same was
subjected to a withholding tax as compensation income under Revenue
Regulations No. 2-98.
(c)
If the employer purchases the car on installment basis, the ownership of
which is placed in the name of the employee, the value of the benefit shall be the
acquisition cost exclusive of interest, divided by five (5) years. The monetary
value of the fringe benefit shall be the entire value of the benefit regardless of
whether the motor vehicle is used by the employee partly for his personal purpose
and partly for the benefit of his employer.
(d)
If the employer shoulders a portion of the amount of the purchase price of
a motor vehicle the ownership of which is placed in the name of the employee, the
value of the benefit shall be the amount shouldered by the employer. The
monetary value of the fringe benefit shall be the entire value of the benefit
regardless of whether the motor vehicle is used by the employee partly for his
personal purpose and partly for the benefit of his employer.
(e)
If the employer owns and maintains a fleet of motor vehicles for the use of
the business and the employees, the value of the benefit shall be the acquisition
cost of all the motor vehicles not normally used for sales, freight, delivery service
and other non-personal used divided by five (5) years. The monetary value of the
fringe benefit shall be fifty per cent (50%) of the value of the benefit.
The monetary value of the motor vehicle fringe benefit is equivalent to the following:
MV = [(A)/5] X 50%
where:
MV = Monetary value
A = acquisition cost
(f)
If the employer leases and maintains a fleet of motor vehicles for the use
of the business and the employees, the value of the benefit shall be the amount of
rental payments for motor vehicles not normally used for sales, freight, delivery,
service and other non-personal use. The monetary value of the fringe benefit shall
be fifty per cent (50%) of the value of the benefit.
(g)
The use of aircraft (including helicopters) owned and maintained by the
employer shall be treated as business use and not be subject to the fringe benefits
tax.
(h)
The use of yacht whether owned and maintained or leased by the employer
shall be treated as taxable fringe benefit. The value of the benefit shall be
measured based on the depreciation of a yacht at an estimated useful life of 20
years.
(4)
Household expenses Expenses of the employee which are borne by the
employer for household personnel, such as salaries of household help, personal driver of
the employee, or other similar personal expenses (like payment for homeowners
association dues, garbage dues, etc.) shall be treated as taxable fringe benefits.
(5)
Interest on loan at less than market rate
(a)
If the employer lends money to his employee free of interest or at a rate
lower than twelve per cent (12%), such interest foregone by the employer or the
difference of the interest assumed by the employee and the rate of twelve per cent
(12%) shall be treated as a taxable fringe benefit.
(b)
The benchmark interest rate of twelve per cent (12%) shall remain in effect
until revised by a subsequent regulation.
(c)
This regulation shall apply to installment payments or loans with interest
rate lower than twelve per cent (12%) starting January 1, 1998.
(6)
Membership fees, dues, and other expenses borne by the employer for his
employee, in social and athletic clubs or other similar organizations. These
expenditures shall be treated as taxable fringe benefits of the employee in full.
(7)
Expenses for foreign travel
(a)
Reasonable business expenses which are paid for by the employer for the
foreign travel of his employee for the purpose of attending business meetings or
conventions shall not be treated as taxable fringe benefits. In this instance, inland
travel expenses (such as expenses for food, beverages and local transportation)
except lodging cost in a hotel (or similar establishments) amounting to an average
of US$300.00 or less per day, shall not be subject to a fringe benefit tax. The
expenses should be supported by documents proving the actual occurrences of the
meetings or conventions.
The cost of economy and business class airplane ticket shall not be subject to a
fringe benefit tax. However, 30 percent of the cost of first class airplane ticket
shall be subject to a fringe benefit tax.
(b)
In the absence of documentary evidence showing that the employee's
travel abroad was in connection with business meetings or conventions, the entire
cost of the ticket, including cost of hotel accommodations and other expenses
incident thereto shouldered by the employer, shall be treated as taxable fringe
benefits. The business meetings shall be evidenced by official communications
from business associates abroad indicating the purpose of the meetings. Business
conventions shall be evidenced by official invitations/communications from the
host organization or entity abroad. Otherwise, the entire cost thereof shouldered
by the employer shall be treated as taxable fringe benefits of the employee.
(c)
Travelling expenses which are paid by the employer for the travel of the
family members of the employee shall be treated as taxable fringe benefits of the
employee.
(8)
Holiday and vacation expenses Holiday and vacation expenses of the
employee borne by his employer shall be treated as taxable fringe benefits.
(9)
Educational assistance to the employee or his dependents
(a)
The cost of the educational assistance to the employee which are borne by
the employer shall, in general, be treated as taxable fringe benefit. However, a
scholarship grant to the employee by the employer shall not be treated as taxable
fringe benefit if the education or study involved is directly connected with the
employer's trade, business or profession, and there is a written contract between
them that the employee is under obligation to remain in the employ of the
employer for period of time that they have mutually agreed upon. In this case, the
expenditure shall be treated as incurred for the convenience and furtherance of the
employer's trade or business.
(b)
The cost of educational assistance extended by an employer to the
dependents of an employee shall be treated as taxable fringe benefits of the
employee unless the assistance was provided through a competitive scheme under
the scholarship program of the company.
(10)
Life or health insurance and other non-life insurance premiums or similar
amounts in excess of what the law allows The cost of life or health insurance and other
non-life insurance premiums borne by the employer for his employee shall be treated as
taxable fringe benefit, except the following:
(a) contributions of the employer for the benefit of the employee, pursuant to the
provisions of existing law, such as under the Social Security System (SSS), (R.A.
No. 8282, as amended) or under the Government Service Insurance System
(GSIS) (R.A. No. 8291), or similar contributions arising from the provisions of
any other existing law; and
(b) the cost of premiums borne by the employer for the group insurance of his
employees.
(c)
Fringe Benefits Not Subject to Fringe Benefits Tax In general, the
fringe benefits tax shall not be imposed on the following fringe benefits:
(1)
Fringe benefits which are authorized and exempted from income
tax under the Code or under any special law;
(2)
Contributions of the employer for the benefit of the employee to
retirement, insurance and hospitalization benefit plans;
(3)
Benefits given to the rank and file, whether granted under a
collective bargaining agreement or not;
(4)
De minimis benefits as defined in these Regulations;
(5)
If the grant of fringe benefits to the employee is required by the
nature of, or necessary to the trade, business or profession of the
employer; or
(6)
If the grant of the fringe benefit is for the convenience of the
employer.
45. Are De Minimis benefits constituted as deductible expense?
Yes, any amount given by the employer to employee as benefits to its employees shall
constitute as deductible expense upon such employer. (RR 2-98)
46. How about fringe benefits?
Yes, any amount given by the employer to employee as benefits to its employees shall
constitute as deductible expense upon such employer. (RR 2-98)
47. What is Statutory Minimum Wage?
According in Revenue Regulations No.10-2008, Statutory Minimum Wage 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.
48. Is there an exemption from income tax regarding holiday pay, overtime pay, night shift,
and hazard pay?
According in Revenue Regulations No.10-2008, an employee who receives/earns
additional compensation such as commissions, honoraria, fringe 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 MWE and, therefore, his/her entire earnings are not exempt from
income tax and consequently from withholding tax.
49. What is the purpose of Revenue Regulations.10-2008 regarding hazard pay?
For purposes of these regulations, hazard pay shall mean the amount paid by the
employer to MWEs who were actually assigned to danger or strike-torn areas, diseases-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.
50. What are the attachments in case of hazardous employment?
According in Revenue Regulations No.10-2008, the employer shall attach to the Monthly
Remittance Return of Withholding Tax on Compensation (BIR Form No. 1601C) for return
periods March, June, September and December a copy of the list submitted to the nearest DOLE
Regional/Provincial Offices- Operations Division/Unit showing the names of MWEs who
received the hazard pay, period of employment, amount of hazard pay per month; and
justification for payment of hazard pay as certified by said DOLE/allied agency that the hazard
pay is justifiable.
51. What is the basis of the computation of the minimum wage?
According in Revenue Regulations No.10-2008, the computation of wages shall be in
accordance with the Collective Bargaining Agreement (CBA), if any, or the provisions of the
Labor Code as implemented. Unless otherwise amended or repeated by subsequent pertinent
laws, rules and regulation, the holiday pay, overtime pay, night shift differential and hazard pay
shall be understood to be computed based on such agreement or labor law provisions.
52. What are the considerations in minimum wage on a monthly basis to withhold tax?
According in Revenue Regulations No.10-2008, the withholding agent shall be guided by
the prevailing minimum wage as reflected in the latest Matrix on of Wage Order and its own
policy on whether employees:
a) Not considered paid on Saturday and Sundays or rest day,
b) Not considered paid on Sundays or rest day,
c) Considered paid on rest days, special days and regular holidays, or
d) Required to work every day including Sundays or rest days, special days and regular
holidays. The resulting numbers of days, in the above enumerated categories are referred
to as the factor or number of working/paid days in a year.
53. How to compute Taxes Withheld on Compensation?
1. The first step is you should answer the following questions below:
What is Your Status? (Single or Married?)
Do You Have Any Dependent? How Many?
How much is your Monthly Basic Pay(salary)?(This does not include your
overtime pay/monetary value of your late/tardiness, holiday pay, but includes the
monthly allowance that you received.)
2. How much is your SSS, Philhealth, and HDMF (Pag-Ibig) monthly contributions?
3. Are you receiving other allowances like laundry allowance, transportation

allowances ,rice allowances, etc.? If yes how much?
You need this later on when you compute your withholding tax because these are
not taxable. Failure to note this may result to erroneous result of computation.
4. What is TAXABLE INCOME?
Taxable income is the portion of income that is the subject of taxation.
In the Philippines our taxable income is determined by this formula:
Taxable Income = [Gross (Basic)Monthly Income+ Overtime Pay+Holiday Pay+
Night Differential] - (minus) [Tardiness Deduction+ Allowances+ SSS
Contribution+ Philhealth Contribution, HDMF Contribution]
5. Factors you need to consider when solving your withholding tax (Applicable for Old
Tax Ruling).
Factors that increases your tax:
Overtime Pay
Holiday Pay
Night Differential
Factors that decreases your tax:
Late/Tardiness
Allowances
SSS Contribution
Philhealth Contribution
HDMF Contribution
Personal Exemptions (ex. single, head of the family, head of the family with
qualified dependents,etc)
6. You must have a copy of BIR Tax Table
54. What are the four (4) withholding tax tables?
o Under Revenue Regulation No.10-2008 as follows:
a. Monthly Tax Table- to be used by employers using the monthly payroll period;
b. Semi-monthly Tax Table- to be used by employers using semi-monthly payroll period;
c. Week Tax Table- to be used by employers using weekly payroll period;
d. Daily Tax Table- to be used by employers using daily payroll period
55. What is withholding tax table?
Under the RR NO. 10-2008 in general, every employer making payment of compensation
shall deduct and withhold from such compensation a tax determined in accordance with the
prescribed Revised Withholding Tax Tables (Annex C) which shall be used starting January 1,
2009.
REVISED WITHHOLDING TAX TABLES1

Effective January 1, 2009
DAILY
1
2
3
4
5
6
Exemption
0.00 0.00
1.65
8.25
28.05
74.26
+0% +5%
+10% +15% +20% +25%
Status
(000P)
over over
over
over
over
over
A. Table for employees without qualified dependent
1. Z
0.0
1
0
33
99
231
462
2. S/ME
50.0 1
165
198
264
396
627
B. Table for single/married employee with qualified dependent child(ren)
1. ME1 / S1
75.0 1
248
281
347
479
710
2. ME2 / S2
100.0 1
330
363
429
561
792
3. ME3 / S3
125.0 1
413
446
512
644
875
4. ME4 / S4
150.0 1
495
528
594
726
957
WEEKLY
Exemption
1
2
3
4
5
6
0.00 0.00
9.62
48.08
163.46 432.69
+0% +5%
+10% +15% +20% +25%
Status
over over
over
over
over
over
1. Z
0.0
1
0
192
577
1,346
2,692
2. S/ME
50.0 1
962
1,154
1,538
2,308
3,654
1. ME1 / S1
75.0 1
1,442 1,635
2,019
2,788
4,135
2. ME2 / S2
100.0 1
1,923 2,115
2,500
3,269
4,615
3. ME3 / S3
125.0 1
2,404 2,596
2,981
3,750
5,096
4. ME4 / S4
150.0 1
2,885 3,077
3,462
4,231
5,577
SEMIMONTHLY
Exemption
0.00 0.00
20.83
104.17 354.17 937.50
+0% +5%
+10% +15% +20% +25%
Status
over over
over
over
over
over
1. Z
0.0
1
0
417
1,250
2,917
5,833
2. S/ME
50.0 1
2,083 2,500
3,333
5,000
7,917
1 www.bir.gov.ph
7
165.02
+30%
over
8
412.54
+32%
over
825
990
1,650
1,815
1,073
1,155
1,238
1,320
1,898
1,980
2,063
2,145
7
961.54
+30%
over
8
2,403.85
+32%
over
4,808
5,769
9,615
10,577
6,250
6,731
7,212
7,692
11,058
11,538
12,019
12,500
2,083.33 5,208.33
+30%
+32%
over
over
10,417
12,500
20,833
22,917
1. ME1 / S1
2. ME2 / S2
3. ME3 / S3
4. ME4 / S4
MONTHLY
Exemption
75.0
100.0
125.0
150.0
1
1
1
1
3,125
4,167
5,208
6,250
3,542
4,583
5,625
6,667
4,375
5,417
6,458
7,500
6,042
7,083
8,125
9,167
8,958
10,000
11,042
12,083
1
2
3
4
5
6
0.00 0.00
41.67
208.33 708.33 1,875.00
+0% +5%
+10% +15% +20% +25%
Status
over over
over
over
over
over
1. Z
0.0
1
0
833
2,500
5,833
11,667
2. S/ME
50.0 1
4,167 5,000
6,667
10,000 15,833
1. ME1 / S1
75.0 1
6,250 7,083
8,750
12,083 17,917
2. ME2 / S2
100.0 1
8,333 9,167
10,833 14,167 20,000
3. ME3 / S3
125.0 1
10,417 11,250 12,917 16,250 22,083
4. ME4 / S4
150.0 1
12,500 13,333 15,000 18,333 24,167
13,542
14,583
15,625
16,667
23,958
25,000
26,042
27,083
7
4,166.67
+30%
over
8
10,416.67
+32%
over
20,833
25,000
41,667
45,833
27,083
29,167
31,250
33,333
47,917
50,000
52,083
54,167
Legend: Z-Zero exemption S-Single ME-Married Employee 1;2;3;4-Number of qualified

dependent children
S/ME = P50,000 EACH WORKING EMPLOYEE
Qualified Dependent Child = P25,000 each but not exceeding four (4) children
USE TABLE A FOR SINGLE/MARRIED EMPLOYEES WITH NO QUALIFIED
DEPENDENT
1. Married Employee (Husband or Wife) whose spouse is unemployed.
2. Married Employee (Husband or Wife) whose spouse is a non-resident citizen receiving
income from foreign sources
3. Married Employee (Husband or Wife) whose spouse is engaged in business
4. Single
6. Zero Exemption for employees with multiple employers for their 2nd,
3rd..employers (main employer claims personal & additional exemption
7. Zero Exemption for those who failed to file Application for Registration
USE TABLE B FOR THE FOLLOWING SINGLE/MARRIED EMPLOYEES WITH
QUALIFIED DEPENDENT
1. Employed husband and husband claims exemptions of children
2. Employed wife whose husband is also employed or engaged in business; husband
waived claim for dependent children in favor of the employed wife.
3. Single with qualified dependent children
56. What is the latest Daily minimum wage in NCR?

CURRENT DAILY MINIMUM WAGE RATES
National Capital Region (NCR) a/
Per Wage Order No. NCR-20 b/
(Effective: 2 June 2016)2
Sector/Industry
Basic
Wage
COLA
Integration
New Basic
Wage
New COLA New

Minimum
Wage Rates
Non-Agriculture
P 466.00
including Private Hospitals with bed
capacity of 100 or less
P 15.00
P 481.00
P 10.00
P 491.00
Agriculture (Plantation and Non

Plantation)
P 429.00
P 15.00
P 444.00
P 10.00
P 454.00
Retail/Service Establishments
employing 15 workers or less
P 429.00
P 15.00
P 444.00
P 10.00
P 454.00
Manufacturing Establishments
regularly employing less than 10
workers
P 429.00
P 15.00
P 444.00
P 10.00
P 454.00
a/
Covers the Cities of Caloocan, Las Pinas, Makati, Malabon, Navotas, Mandaluyong, Manila,
Marikina, Muntinlupa, Paranaque, Pasay, Pasig, Quezon, San Juan, Taguig, and Valenzuela, and
the Municipality of Pateros.
b/
Grants the following:

Upon effectivity, Integration of P15.00 COLA to Basic and increase P10.00 COLA per day.
W.O. issued on 17 May 2016 published at Philippine Star on 18 May 2016.
2 http://www.nwpc.dole.gov.ph
57. What is Cumulative average method?

Under the RR NO. 10-2008, if in respect of a particular employee, the regular compensation is
exempt from withholding tax because the amount thereof is below the compensation level, but
supplementary compensation is paid during the calendar year or the supplementary
compensation is equal or more than the regular compensation to be paid; or the employee was
newly hired and had the a previous employer/s within the calendar year, other than the present
employer doing this cumulative compensation, the present employer shall determine the tax to be
deducted and withheld in accordance with the cumulative average method provide hereunder;
58. What is withholding tax method?
When the employer-employee relationships is terminated before the end of the calendar
year; and(2) when computing for the year-end adjustment, the employer shall determine the
amount to be withheld from the compensation on the last month of employment or in December
of the current calendar year in accordance with the following procedures. (RR 2-98)
59. Is the duty to withhold tax the same as the duty to pay income tax?
No, the duty to withhold tax is different from the duty to pay income tax, the former
being imposed on the withholding agent or person (Sec 22(A) required to deduct and withhold
any tax under the provision of section 57 and not upon the tax payer (Comm. Vs.. Malayan Inc.
co., l-21713, Nov.18, 1967)
60. Are withholding agent considered as taxpayer?
No, the withholding agent is merely a tax collector, not a taxpayer. (Comm. Vs.. Malayan
Inc. co., L-21713, Nov 18, 1967)
61. Is withholding agent an agent of the government?
Yes, The withholding agent is the agent of both the government with respect to the
collection and/or withholding of tax, and of the taxpayer, in regard to the filling of the necessary
income tax return and payment of the tax to the government.(Comm. Vs.. Malayan Inc. co., L21713, Nov 18, 1967)
62. What is Expanded Withholding Tax?
Expanded Withholding Tax is a kind of withholding tax which is prescribed on certain
income payments and is creditable against the income tax due of the payee for the taxable
quarter/year in which the particular income was earned. (Sec.57-58 &78-83 of the National
International Revenue)
63. What BIR Form used in Expanded Withholding tax monthly remittance return of
Income Taxes Withheld?
Under Revenue Regulation No.1-2013, BIR Form No. 1601-E: Monthly Remittance
Return of Income Taxes Withheld (Expanded) [Except for Transactions Involving Onerous
Transfer of Real Property Classified as Ordinary Asset]
64. Who Are Required To File of Monthly Remittance of Income Taxes Withheld
(Expanded) [Except for Transactions Involving Onerous Transfer of Real Property
Classified as Ordinary Asset]?
Every registered withholding agent on Expanded Withholding Tax, which may include, but
not limited to the following:
1) In general, any juridical person, whether or not engaged in trade or business
2) An individual, with respect to payments made in connection with his trade or business.
However, insofar as taxable sale, exchange or transfer of real property is concerned,
individual buyers who are not engaged in trade or business are also constituted as
withholding agents.
3) Government agencies and instrumentalities (e.g., National Government Agencies,
Government-Owned or Controlled Corporations, Local Government Units, etc.)
4) All individuals, juridical persons and political parties, with respect to their income
payments made as campaign expenditures and/or purchase of goods and services intended as
campaign contributions. (RR No.2-98)
65. What are the Documentary Requirements of Monthly Remittance of Income Taxes
Withheld (Expanded) [Except for Transactions Involving Onerous Transfer of Real
Property Classified as Ordinary Asset]?
1. Return previously filed and proof of remittance, if amended return
2. Monthly Alphalist of Payees (MAP), except income payments made by political
parties, candidates and income payments made by individual or juridical person on the
purchase of goods and services as campaign contributions to political parties and
candidates
3. For advance payment, BIR Form No. 0605
4. Electronic Tax Remittance Advice (eTRA) previously Tax Remittance Advice (TRA)
for National Government Agencies (NGAs) as required under DOF- DBM Joint Circular
No. 1-2000A and RR 1-2013
66. What are the Procedures for Filing and Payment of Monthly Remittance of Income
Taxes Withheld (Expanded) [Except for Transactions Involving Onerous Transfer of Real
1. Read instructions indicated in the tax return.
2. Accomplish BIR Form No. 1601-E in triplicate copies.

o Proceed to the nearest Authorized Agent Bank (AAB) of the Revenue District Office
where you are registered or taxpayer concerned is registered and present the duly
accomplished BIR Form No. 1601- E, together with the required attachments and
your payment.
- In places where there are no AABs, proceed to the Revenue Collection Officer or duly
Authorized City or Municipal Treasurer located within the Revenue District Office where
you are registered or taxpayer concerned is registered and present the duly accomplished
BIR Form 1601-E, together with the required attachments and your payment
AABs/Revenue Collection Officer/duly Authorized City or Municipal Treasurer.
- Proceed to the Revenue District Office where you are registered and present the duly
accomplished BIR Form 1601-E, together with the required attachments.
- Receive your copy of the duly stamped and validated form from the RDO
representative. (RR 1-2013)
67. When is the deadline of Filing Via EFPS of Monthly Remittance of Income Taxes
Group A - Fifteen (15) days following end of the month
Group B - Fourteen (14) days following end of the month
Group C - Thirteen (13) days following end of the month
Group D - Twelve (12) days following end of the month
Group E - Eleven (11) days following end of the month
Note: The staggered manner of filing is only allowed to taxpayers using the Electronic Filing and
Payment System (EFPS) based on the industry classification groupings per RR No. 26-2002.
However, the staggered filing of returns allowed for withholding agents/taxpayers enrolled in the
EFPS facility of the Bureau shall not apply in the case of the NGAs per RR 1-2013.
68. When is the deadline of Payment Via EFPS of Monthly Remittance of Income Taxes
January 20th of the succeeding year.
Provided however that, in the case of NGAs, all returns must be electronically filed (efiled) and payment of the tax due must also be made on the same day the return is e-filed which
shall be on or before the 10th day following the month in which withholding was made, except
for taxes withheld for the month of December of each year, which shall be filed on or before
January 15 of the succeeding year under Revenue Regulations No. 1-2013.
69. When is the deadline of Manual Filing and Payment of Monthly Remittance of Income
Taxes Withheld (Expanded) [Except for Transactions Involving Onerous Transfer of Real
before January 15 of the succeeding year under Revenue Regulations No. 1-2013.
70. What are the tax rates of Monthly Remittance of Income Taxes Withheld (Expanded)
[Except for Transactions Involving Onerous Transfer of Real Property Classified as
Ordinary Asset]?3
BIR FORM
TAX
TYPE
BIR FORM NO.

1601-E
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
3 www.bir.gov.ph
DESCRIPTION
ATC
MONTHLY REMITTANCE
RETURN OF CREDITABLE
INCOME TAXES WITHHELD
(EXPANDED)
Professionals (lawyers, CPAs,
engineers, etc.), talent fees paid to
WI010
individuals - If the current years
gross income is P720,000 and below
Professionals (lawyers, CPAs,
engineers, etc.), talent fees paid to
WI011
individuals - If the current years
gross income exceeds P 720,000
Professionals/ talent fees paid to
juridical persons - If the current
WC010
years gross income is P720,000 and
below
Professionals/ talent fees paid to
juridical persons - If the current
WC011
years gross income exceeds P
720,000
Professional entertainers, such as,
but not limited to, actors and
actresses, singers, lyricist,
WI020
composers, emcees - If the current
years gross income is P 720,000 and
below
Professional entertainers, such as, WI021
but not limited to, actors and
TAX
RATES
10%
15%
10%
15%
10%
15%
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
actresses, singers, lyricist,

composers, emcees - If the current
years gross income exceeds P
720,000
Professional athletes, including
basketball players, pelotaris and
WI030
jockeys - If the current years gross
income is P 720,000 and below
Professional athletes including
basketball players, pelotaris and
WI031
jockeys - If the current years gross
income exceeds P720,000
Movie, stage, radio, television and
musical directors and producers - If
WI040
the current years gross income is
P720,000 and below
Movie, stage, radio, television and
musical directors and producers - If
WI041
the current years gross income
exceeds P 720,000
Management and technical
consultants paid to individuals. If the
WI050
current years gross income is P
720,000 and below
consultants paid to individuals - If
WI051
the current years gross income
exceeds P 720,000
consultants paid to juridical person WC050
If the current years gross income is
P 720,000 and below
consultants paid to juridical person WC051
If the currents years gross income
exceeds P720,000
Business and bookkeeping agents
and agencies - If the current years WI060
gross income is P 720,000 and below
Business and bookkeeping agents
and agencies - If the current years WI061
gross income exceeds P 720,000
Insurance agents and insurance
WI070
adjusters - If the current years gross
10%
15%
10%
15%
10%
15%
10%
15%
10%
15%
10%
1601-E/2307
WE
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WE
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WE
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WE
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WE
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WE
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WE
1601-E/2307
WE
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WE
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WE
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WE
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WE
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WE
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income is P 720,000 and below

Insurance agents and insurance
adjusters - If the current years gross WI071
income exceeds P 720,000
Other recipients of talent fees - If the
WI080
720,000 and below
Other recipients of talent fees - If the
current years gross income exceeds WI081
P 720,000
Fees of directors who are not
employees of the company - If the
WI090
720,000 and below
Fees of directors who are not
employees of the company - If the
WI091
current years gross income exceeds
P 720,000
Rentals- real/personal properties,
poles, satellites & transmission
WI100
facilities, billboards - Individual
Rentals- real/personal properties,
poles, satellites & transmission
WC100
facilities, billboards - Corporate
Cinematographic film rentals WI110
Individual
Cinematographic film rentals WC110
Corporate
Income payments to prime
contractors/sub-contractors WI120
Individual
Income payments to prime
contractors/sub-contractors WC120
Corporate
Income distribution to beneficiaries
WI130
of estates and trusts
Gross commission or service fees of
custom, insurance, stock, real estate,
immigration and commercial brokers WI140
& fees of agents of professional
entertainers - Individual
Gross commission or service fees of WC140
custom, insurance, stock, real estate,
15%
10%
15%
10%
15%
5%
5%
5%
5%
2%
2%
15%
10%
10%
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
immigration and commercial brokers

& fees of agents of professional
entertainers - Corporate
Payments to medical practitioners by
a duly registered professional
partnership for the practice of the
medical profession - If the currents WI141
year's income payments to the
medical practitioner is P720,000 and
below
Payments to medical practitioners by
a duly registered professional
partnership for the practice of the
medical profession - If the currents WI142
year's income payments to the
medical practitioner exceeds
P720,000
Payments for
medical/dental/veterinary services
thru Hospitals/ Clinics/Health
Maintenance Organizations,
including direct payments to service WI150
providers - If the current year's
income payments for the
exceeds P 720,000
Payments for
thru Hospitals/ Clinics/Health
Maintenance Organizations,
including direct payments to service WI151
providers - If the current year's
income payments for the
medical/dental/veterinary services is
P 720,000 and below
Payment by the general professional
partnerships GPP) to its partners - If
the current year's income payments WI152
to the partners is P 720,000 and
below
Payment by the general professional
partnerships GPP) to its partners - If
WI153
the current year's income payments
to the partners exceeds P 720,000
Payments made by credit card
WI156
10%
15%
15%
10%
10%
15%
1% of 1/2
1601-E/2307
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1601-E/2307
WE
1601-E/2307
WE
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WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
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companies - Individual
Payments made by credit card
WC156
companies - Corporate
Income payments made by the
government to its local/resident
WI640
suppliers of goods - Individual
WC640
suppliers of goods - Corporate
WI157
suppliers of service - Individual
WC157
suppliers of services - Corporate
Income payments made by top
20,000 private corporations to their
WI158
local/resident suppliers of goods Individual
WC158
local/resident suppliers of goods Corporate
WI160
local/resident suppliers of services Individual
WC160
local/resident suppliers of services Corporate
Additional payments to government
personnel from importers, shipping
WI159
and airline companies or their agents
for overtime services
Commission, rebates, discounts and
other similar considerations
paid/granted to independent &
exclusive distributors,
WI515
medical/technical & sales
representatives & marketing agents
& sub-agents of multi-level
marketing companies - Individual
1% of 1/2
1%
1%
2%
2%
1%
1%
2%
2%
15%
10%
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
Commission, rebates, discounts and

other similar considerations
paid/granted to independent &
exclusive distributors,
medical/technical & sales
representatives & marketing agents
and sub-agents of multi-level
marketing companies - Corporate
Gross payments to embalmers by
funeral parlors
Payments made by pre-need
companies to funeral parlors Individual
Payments made by pre-need
companies to funeral parlors
Corporate
Tolling fee paid to refineries Individual
Tolling fee paid to refineries Corporate
Income payments made to suppliers
of Agricultural products - Individual
Income payments made to suppliers
of Agricultural products - Corporate
Income payments on purchases of
minerals, mineral products & quarry
resources - Individual
minerals, mineral products & quarry
resources - Corporate
gold by Bangko Sentral ng Pilipinas
(BSP) from gold miners/suppliers
under PD 1899, as amended by RA
No. 7076- Individual
gold by Bangko Sentral ng Pilipinas
(BSP) from gold miners/suppliers
under PD 1899, as amended by RA
No. 7076 - Corporate
On gross amount of refund given by
Meralco to customers with active
contracts as classified by Meralco -
WC515
10%
WI530
1%
WI535
1%
WC535
1%
WI540
5%
WC540
5%
WI610
1%
WC610
1%
WI630
5%
WC630
5%
WI632
5%
WC632
5%
WI650
25%
1601-E/2307
WE
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WE
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WE
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WE
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WE
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WE
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Individual
Meralco to customers with active
contracts as classified by Meralco Corporate
Meralco to customers with
terminated contracts as classified by
Meralco - Individual
Meralco to customers with
terminated contracts as classified by
Meralco - Corporate
Withholding on gross amount of
interest on the refund of meter
deposit whether paid directly to the
customers or applied against
customer's billing - Residential and
General Service customers whose
monthly electricity consumption
exceeds 200 kwh as classified by
MERALCO Individual
MERALCO - Corporate
customer's billing - Non-Residential
customers whose monthly electricity
consumption exceeds 200 kwh as
classified by MERALCO Individual
WC650
25%
WI651
32%
WC651
32%
WI660
10%
WC660
10%
WI661
10%
WC661
10%
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WE
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WE
1601-E/2307
WE
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WE
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classified by MERALCO Corporate
other electric Distribution Utilities
(DU) - Individual
other electric Distribution Utilities
(DU) Corporate
classified by other electric
Distribution Utilities (DU) Individual
classified by other electric
Distribution Utilities (DU) Corporate
Income payments made by the top
WI662
10%
WC662
10%
WI663
20%
WC663
20%
WI670
1%
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
five thousand (5,000) individual

taxpayers to their local/resident
suppliers of goods other than those
covered by other rates of
withholding tax - Individual
WC670
suppliers of goods other than those
withholding tax - Corporation
WI672
suppliers of services other than those
withholding tax - i) Individual
WC672
suppliers of services other than those
withholding tax - ii) Corporation
Income payments made by political
parties and candidates of local and
national elections of all their
purchase of goods and services as
campaign expenditures, and income
payments made by individuals or
WI680
juridical persons for their purchases
of goods and services intended to be
given as campaign contribution to
political parties and candidates Individual
Income payments made by political
parties and candidates of local and
national elections of all their
purchase of goods and services as
campaign expenditures, and income
payments made by individuals or
WC680
juridical persons for their purchases
of goods and services intended to be
given as campaign contribution to
political parties and candidates Corporation
1%
2%
2%
5%
5%
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
Income payments received by Real

WC690
Estate Investment Trust (REIT)
Interest income derived from any
other debt instruments not within the
coverage of deposit substitutes and
WI710
Revenue Regulations No. 14-2012
subject to Creditable/ Expanded
Withholding Tax - Individual
Interest income derived from any
other debt instruments not within the
coverage of deposit substitutes and
WC710
Revenue Regulations No. 14-2012
subject to Creditable/ Expanded
Withholding Tax - Corporate
1%
20%
20%
71. What BIR Form used in Expanded Withholding Annual Information Returns of
Income Taxes Withheld?
Under Revenue Regulations No.1-2014, the BIR Form No. 1604CF/ 1604E- Annual Information
Return of Creditable Taxes Withheld (Expanded)/Income Payments Exempt from Withholding
Tax
72. When is the deadline required to file BIR Form No. 1604E?
According in Revenue Memorandum Circular No.48-2013, the payor/ withholding agent,
who may be an individual, candidate or otherwise a political party or a party list group, or any
other juridical entity, is further required to file with the BIR Office where he/it is registered as
withholding agent, on or before March 1, 2014, an Annual Information Return of Creditable
Taxes Withheld (Expanded)/Income Payments Exempt from Withholding Tax (BIR form No.
1604E)
73. What income payments are subject to Expanded Withholding Tax?
o The following income payments are subject to Expanded Withholding Tax:
1. Professional fees / talent fees for services rendered by the following:
Those individually engaged in the practice of profession or callings such as
lawyers,certified public accountants, doctors of medicine, architecs, engineers and all other
professionals who have undergone licensure examinations regulated by the Professional
RegulationsCommission, Supreme Court, etc. Professional entertainers such as but not
limited to actors and actresses, singers, lyricist, composers and emcees Professional athletes
including basketball players, pelotaris and jockeysDirectors and producers involved in
movies, stage, radio, television and musical productions Insurance agents and insurance
adjusters Management and technical consultants Bookkeeping agents and agencies
Other recipient of talent fees
Fees of directors who are not employees of the company paying such fees whose duties
are confined to attendance at and participation in the meetings of the Board of Directors
2. Professional fees, talent fees, etc for services of taxable juridical persons
3. Rentals:
- Rental of real property used in business
- Rental of personal properties in excess of P 10,000 annually
- Rental of poles, satellites and transmission facilities
- Rental of billboards
4. Cinematographic film rentals and other payments
5. Income payments to certain contractors
- General engineering contractors
- General building contractors
- Specialty contractors
6. Other contractors such as transportation contractors, janitorial, security, messengerial,
advertising, labor recruiting agencies, computer programmers, etc.
Income distribution to the beneficiaries of estates and trusts
7. Gross commission or service fees of customs, insurance, stock, real estate, immigration
and commercial brokers and fees of agents of professional entertainers
8. Income payments to partners of general professional partnerships
9. Payments made to medical practitioners
10. Gross selling price or total amount of consideration or its equivalent paid to the
seller/owner for the sale, exchange or transfer of real property classified as ordinary asset
11. Additional income payments to government personnel from importers, shipping and
airline companies or their agents
12. Certain income payments made by credit card companies
13. Income payments made by the top 20,000 private corporations to their purchase of goods
and services from their local/resident suppliers other than those covered by other rates of
withholding
14. Income payments by government offices on their purchase of goods and services, from
local/resident suppliers other than those covered by other rates of withholding
15. Commission, rebates, discounts and other similar considerations paid/granted to
independent and exclusive distributors, medical/technical and sales representatives and
marketing agents and sub-agents of multi-level marketing companies.
16. Tolling fees paid to refineries
17. Payments made by pre-need companies to funeral parlors
18. Payments made to embalmers by funeral parlors
19. Income payments made to suppliers of agricultural products (suspension not yet lifted)
20. Income payments on purchases of mineral, mineral products and quarry resources
21. On gross amount of refund given by MERALCO to customers with active contracts as
classified by MERALCO;
22. Interest income on the refund paid through direct payment or application against
customers billing by other eletrict Distribution Utilities in accordance with the rules
embodied in ERC Resolution No. 8 series of 2008 dated June 4, 2008 governing the refund
of meter deposits which was approved and adopted by ERC in compliance with the mandate
of Article 8 of the Magna Carta for Residential Electricity Consumers and Article 3.4.2 of
DSOAR exempting all electricity consumers, whether residential or non-residential from the
payment of meter deposit.
23. Income payments made by the top 5,000 individual taxpayers to their purchase of goods
and services from their local/resident suppliers other than those covered by other rates of
withholding
24. Income payments made by political parties and candidates of local and national elections
of all their campaign expenditures, and income payments made by individuals or juridical
persons for their purchases of goods and services intended to be given as campaign
contribution to political parties and candidates. (RR No.2-98)
74. What are the procedures of the submission of hard copies of Certificate of Creditable
Tax Withheld at Source (BIR Form No. 2307)?
o Under Revenue Regulations No.2-2015, the following procedures shall be strictly observed:
1. Scan the original copies of BIR Form No. 2307 through a scanning machine or device;
2. Store the soft copies of BIR Form No. 2307 using the PDF file format with the
filenames alphabetically arranged in a Digital Versatile Disk Recordable (DVD-R). The
filename shall contain the following information separated by an underline:
a. BIR-registered name of the taxpayer-payor;
b. Taxpayer Identification Number (TIN), including the head office code or branch code
of the payor, whichever is applicable; and
c. Taxable Period.
3. Label the DVD-R containing the soft copies of the said BIR forms in accordance with the
format prescribed in Annex A of these Regulations; and
4. Submit the duly accomplished DVR-R to the BIR Office where the taxpayers is duly
registered, together with a notarized Certification, using the format in Annex C of these
Regulations, duly signed by the authorized representative of the taxpayer certifying that the soft
copies of the said BIR form contained in the DVD-R are the complete and exact copies of the
original thereof.
75. What are the procedures of the submission of hard copies of original copy of BIR Form
No. 2316?
o Under Revenue Regulations No.2-2015, the following procedures shall be strictly observed:
1. Scan the duplicate original copies of BIR Form No. 2316 through a scanning machine
or device;
2. Store the soft copies of BIR Form No. 2316 using the PDF file format with the
filenames alphabetically arranged in a Digital Versatile Disk Recordable (DVD-R). The
filename shall contain the following information separated by an underline:
a. Surname of the employee;
b. Taxpayer Identification Number (TIN) of the employee; and
c. Taxable Period.
3. Label the DVD-R containing the soft copies of the said BIR forms in accordance with
the format prescribed in Annex B of these Regulations; and
4. Submit the duly accomplished DVR-R to the BIR Office where the taxpayers is duly
registered not later than February 28 following the close of the calendar year, together
with a notarized Certification prepared according to the format in Annex C of these
Regulations and duly signed by the authorized representative of the taxpayer certifying
that the soft copies of the said BIR form contained in the DVD-R are the complete and
exact copies of the original thereof.
76. When should the taxpayer file of BIR Form.2307?
As stated in Revenue Memorandum Circular No. 85-2012, Every payor required to
deduct and withhold taxes under these regulations shall furnish in triplicate, each payee, whether
individual or corporate, with a withholding tax statements, using the prescribed form (BIR Form
No.2307), showing the income payments made and the amount of taxes withheld therefrom, for
every month by the quarter, within twenty (20) days following the close of taxable quarter
employed by the payee in filing his/its quarterly income tax return.
77. What is Final Withholding Tax?
Final Withholding Tax is a kind of withholding tax which is prescribed on certain income
payments and is not creditable against the income tax due of the payee on other income subject
to regular rates of tax for the taxable year. Income Tax withheld constitutes the full and final
payment of the Income Tax due from the payee on the particular income subjected to final
withholding tax. (Sec.57-58 &78-83 of the National International Revenue)
78. What kinds of income are subject to FWT?
o The FWT is imposed on:
- Interest income
- Royalties
- Dividends from domestic corporations
- Profits from sale of property
- Fringe benefits
- Rewards of informers in the discovery of tax violations or seizure of goods
- *For Filipinos and aliens occupying managerial, supervisory, or technical positions in
regional headquarters of multinational corporations:
- Compensation income
79. What is BIR Form used in Monthly Remittance Return of Final Income Taxes
Withheld?
Under the Revenue Regulations No. 1-2013 the BIR Form of 1601-F is Monthly
Remittance Return of Final Income Taxes Withheld
80. When is the deadline of BIR Form 1601-F in Manual filing?

Under the Revenue Regulations No. 1-2013 the BIR Form of 1601-F is On or before the
10th day following the month in which withholding was made, except for taxes withheld for the
month of December of each year, which shall be filed on or before January 15 of the succeeding
year
81. When is the deadline of BIR Form 1601-F in EFPS filing?
Under the Revenue Regulations No. 1-2013 the BIR Form of 1601-F is On or before the
15th day following the month in which withholding was made, except for taxes withheld for the
month of December of each year, which shall be filed on or before January 15 of the succeeding
year
82. What BIR Form used in Monthly Remittance Return of Final Income Taxes Withheld
on Interest Paid and Yield on Deposit Substitutes/Trust/Etc.?
Under Revenue Regulations No.1-2013, BIR Form No. 1602 - Monthly Remittance
Return of Final Income Taxes Withheld on Interest Paid and Yield on Deposit
Substitutes/Trust/Etc.
83. Who Are Required To File of Monthly Remittance Of Final Income Taxes Withheld On
Interest Paid And Yield On Deposit Substitutes, Trust, Etc.?
Banks, non-bank financial intermediaries, finance corporations, investment and trust
companies and other institutions required to withhold final income tax on interest paid/accrued
on deposit and yield or any other monetary benefit from deposits substitutes and from trust fund
and similar arrangements. (RR No.2-98)
84. What are the Procedures (for Manual filing of tax returns) of Monthly Remittance Of
Final Income Taxes Withheld On Interest Paid And Yield On Deposit Substitutes, Trust,
Etc.?
1. Accomplish BIR Form No. 1602 in triplicate copies.
- Proceed to the nearest Authorized Agent Bank (AAB) of the Revenue District
Office where you are registered or taxpayer concerned is registered and present
the duly accomplished BIR FormNo. 1602, together with the required attachments
and your payment.
- In places where there are no AAB, proceed to the Revenue Collection Officer or
duly Authorized City or Municipal Treasurer within the Revenue District Office
where the withholding agents place of business/office is located and present the
duly accomplished BIR Form No. 1602, together with the required attachments
and your payment who will issue a Revenue Official Receipt (BIR Form No.
2524) therefor.
AAB's/Revenue Collection Officer/duly Authorized City or Municipal Treasurer.
- Proceed to the Revenue District Office where you are registered or taxpayer
concerned is registered and present the duly accomplished BIR Form No. 1602,
together with the required attachments. (RR No.2-98)
85. When is the deadline for Filing Via EFPS of Monthly Remittance Of Final Income
Taxes Withheld On Interest Paid And Yield On Deposit Substitutes, Trust, Etc.?
made under Revenue Regulations No. 1-2013
86. When is the deadline for Payment Via EFPS of Monthly Remittance Of Final Income
Taxes Withheld On Interest Paid And Yield On Deposit Substitutes, Trust, Etc.?
January 20th of the succeeding year under Revenue Regulations No. 1-2013.
87. When is the deadline for Manual Filing and Payment of Monthly Remittance Of Final
Income Taxes Withheld On Interest Paid And Yield On Deposit Substitutes, Trust, Etc.?
before January 15 of the succeeding year under Revenue Regulations No. 1-2013
88. What payments are subject to final withholding tax?
Under Revenue Regulations No.2-98, the following forms of income will be subject to
final withholding tax at the rates specified.
Income Payment
Interest from peso bank
deposit
Tax Rate
Payee
20%
Citizen or resident alien individual

Non-resident alien engaged in
trade or business
Domestic corporation
Resident foreign corporation
25%
Non-resident alien not engaged in

trade or business
33% in 1999
32% in 2000 and
thereafter
Non-resident foreign corporation
7.5%
Resident citizen or alien individual

Exempt
Non-resident alien
20%

trade or business
25%

trade or business
33% in 1999;
32% in 2000 and
thereafter
Royalties on books, other

literary works and musical
compositions
10%

trade or business
Interest income from longterm deposit or investment in

savings, trust funds, deposit
substitutes based on the length
of time instrument was held
by taxpayer
More than 5 years Exempt

4 to 5 yrs. - 5%
3 to less
than 4 yrs. - 12%
Less than
3 yrs. - 20%

trade or business
Cash and/or property

dividends from domestic
corporation, joint stock
company, insurance or mutual
fund companies or share in
distributable net income of
partnership
6% in 1998;
8% in 1999
10% in 2000
and thereafter
20%
Interest income from a

depository bank under the
foreign currency deposit
system
Yield from deposit substitutes

and trust funds; royalties, in
general; prizes exceeding
P10,000; other winnings,
except PCSO and lotto
winnings
trade or business
25%

trade or business
33% in 1999;
32% in 2000 and
thereafter
Sale, exchange or other

disposition of real property
located in the Philippines
classified as capital asset
6% on the gross
selling price or fair
market value,
whichever is higher
Citizen or resident alien

trade or business
trade or business
Compensation income, except

income subject to fringe
benefit tax
15%
Alien employees and Filipinos

employees occupying the same
position as those of alien employed
by
Regional or area headquarters
Regional Operating headquarters
Representative offices
Offshore banking units
Foreign Petroleum Service
Contractors and Sub-contractors
Income derived from foreign

currency transactions with
residents, including local
commercial banks, branches
of foreign banks, and other
FCDUs/OBUs
10%
FCDUs
OBU
Profit remitted by Philippine

branch, except those
registered with PEZA, SBMA
and CDA.
15%
Head office of foreign corporation
Gross income from all sources 25%

within the Philippines
Non-resident cinematographic film

owners, lessors or distributors
Gross rentals, lease and

charter fees
4.5%
Non-resident owner of lessor of

vessels from leases or charters to
Filipino citizens or corporations
Gross rentals, charter and
7.5%
Non-resident lessor of aircraft,
other fees
machinery and other equipment
Interest on foreign loans

contracted on or after August
1, 1986
20%
Dividends from a domestic

corporation
15%
Fringe benefits granted or

furnished by the employer
34% in 1998;
33% in 1999;
32% in 2000 and
thereafter

trade or business
25%

trade or business
Fringe benefits granted or

furnished by the employer
15%
Alien employees and Filipinos

employees occupying the same
position as those of alien employed
by
Regional or area headquarters
Regional Operating headquarters
Representative offices
Offshore banking units
Foreign Petroleum Service
Contractors and Sub-contractors
Informers reward
10%
Persons instrumental in the

discovery of violations of Tax
Code and discovery and seizure of
smuggled goods
89. What payments are subject to creditable withholding tax?

Under Revenue Regulation No.2-98, a creditable withholding tax is collected wen the
following incomes are paid by persons residing in the Philippines:
Income Payment/Payee
Tax Rate
Professional, promotional and talent fees for the services rendered by the
following individuals
Individuals engaged in the practice of profession
Professional entertainers
Professional athletes
10%
Directors in movies, stage, radio, television and musical productions

Insurance agents and insurance adjusters
Management and technical consultants
Bookkeeping agents and agencies
Other recipients of talent fees
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. (These payments were previously not subject to
withholding.)
Professional fees, talent fees or other forms of remuneration to taxable juridical
persons
5%
Rentals paid to lessors of real property used in business

(Previous minimum lease of P5,000 was deleted.)
5%
Cinematographic film rentals and other payments to resident individuals and

corporate cinematographic film owners, lessors or distributors
5%
Gross payments to
1%
General engineering contractors
General building contractors
Specialty contractors
Other contractors
filling, demolition and salvage work contractors and operators of drilling
apparatus
operators of dockyards
persons engaged in the installation of water system, and gas or electric light,
heat or power
operators of stevedoring, warehousing or forwarding establishments
transportation contractors
printers, bookbinders, lithographers and publishers
messengerial, janitorial, private detective and/or security agencies, credit and/or
collection agencies and other business agencies
advertising agencies
independent producers of television, radio and stage performances or shows
independent producers of "jingles"
labor recruiting agencies
persons engaged in the installation of elevators, air conditioning units,
computer machines and other equipment and machineries and maintenance
services thereon;
persons engaged in the sale of computer services, landscaping services and
collection and disposal of garbage
TV and radio station operators on sale of TV and radio airtime
TV and radio blocktimers on sale of TV and radio commercial spots.
Income distribution to beneficiaries of estates and trusts, except such income

subject to final withholding tax and tax-exempt income
15%
Gross commissions to customs, insurance, real estate and commercial brokers

and fees of agents of professional entertainers
5%
Drawings, advances, sharings, allowances, stipends and other payments made

by a general professional partnership to its partners
10%
Professional fees paid to medical practitioners by hospitals and clinics or by

patients through the hospital or clinic
10%
Gross selling price or total amount of consideration for the sale, exchange or
transfer of real property, other than capital assets, by an individual, corporation,
estate, trust, trust fund or pension fund
if habitually engaged in the real estate business
P500,000 or less
1.5%
More than P500,000 but not exceeding P2 M
3.0%
More than P 2 Million
5.0%
Not habitually engaged in the real estate business
7.5%
Additional income payment to government personnel for overtime services

from importers, shipping and airline companies, or their agents
15%
Gross amounts paid by credit card company to any business entity, natural or
juridical person, representing sales of goods/services made to cardholders
Income payments made by any of the top 5,000 corporations to their local
supplier of goods
1%
Income payments made by a government office on their purchases of goods

from local suppliers, except any single purchase which is P10,000 and below
1%
90. What is BIR Form 1603?

Under the Revenue Regulations No. 1-2013 the BIR Form of 1603 is Quarterly
Remittance Return of Final Income Taxes Withheld on Fringe Benefits Paid to Employees Other
than Rank and File
91. When is the deadline of BIR Form 1603?
Under the Revenue Regulations No. 1-2013 the BIR Form of 1603 is on or before the
10th day of the month following the quarter in which the withholding was made.
92. When is the deadline required to file BIR Form No. 1604E?
According in Revenue Memorandum Circular No.48-2013, the payor / withholding
agent, who may be an individual, candidate or otherwise a political party or a party list group, or
any other juridical entity, is further required to file with the BIR Office where he/it is registered
as withholding agent, on or before March 1, 2014, an Annual Information Return of Creditable
Taxes Withheld (Expanded)/Income Payments Exempt from Withholding Tax (BIR form No.
1604E)
93. What is Withholding Tax on Government Money Payments (GMP) - Percentage Taxes?
Withholding Tax on Government Money Payments (GMP) - Percentage Taxes is the tax
withheld by National Government Agencies (NGAs) and instrumentalities, including
government-owned and controlled corporations (GOCCs) and local government units (LGUs),
before making any payments to non-VAT registered taxpayers/suppliers/payees. (Sec.57-58 &7883 of the National International Revenue Code)
94. Who are required to withhold on Government Money Payments (GMP) - Percentage
Taxes?
In general, any juridical person, whether or not engaged in business
An individual with respect to payments made in connection with his trade or business
All government offices, including government owned and controlled corporations, provincial,
city, municipal governments and barangays. (RR No.2-98)
95. Who are exempted from withholding on Government Money Payments (GMP) Percentage Taxes?
National government and its instrumentalities, including provincial, city or municipal
governments
Persons enjoying exemption from payment of income taxes pursuant to the provisions of
any law, general or special (RR No.2-98)
96. When are private entities considered as withholding agents for VAT purposes?
As an exception to the general rule, gross payments made to non-residents shall be
subjected to the final withholding vat of 12% by private entities making the income payment
(RMC 5-2006 & 7-2006)
97. What is the BIR Form 1600?
Under the Revenue Regulations No. 1-2013 the BIR Form of 1600 is Monthly
Remittance Return of Value-Added Tax and Other Percentage Taxes Withheld
98. When is the deadline of BIR Form 1600?

Under the Revenue Regulations No. 1-2013 the BIR Form of 1600 is On or before the
10th day of the month following the month in which withholding was made under RR No.1-2013
99. Who are the taxpayers that can comply the requirements prescribed in the preceding
Section?
As stated in Revenue Regulations No.2-2015, under Sec.3 Taxpayers covered by the
amendatory provisions, any non-Large Taxpayers Services duly registered under the Revenue
District Office may, at its his/her option, comply with the said requirements.
100. Any non-Large Taxpayers Services are allowed to submit the requirements in hard
copy?
As stated in Revenue Regulations No.2-2015, under Sec.3 Taxpayers covered by the
amendatory provisions, the non-Large Taxpayers Services registered taxpayers shall no longer be
allowed to submit in hard copies thereafter once the said taxpayer opted to adopt the
requirements prescribed by these Regulations.
101. Is there a deduction allowed from the payors gross income if it is shown that the
income tax required to be withheld?
As stated in RR No. 12-2013, no deduction will be allowed not withstanding 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 Sec. 57 & 58 of the National
International Revenue Code.
102. Who are considered TOP 20,000 Corporate Taxpayers?
Top twenty thousand (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:
a) Classified and duly notified by the Commissioner as a large taxpayer under Revenue
Regulation No. 1-98, as amended, or belonging to the top five thousand (5,000) private
corporations under RR 12-94, or to the top ten thousand (10,000) private corporations under
RR 17-2003, unless previously de-classified as such or had already ceased business
operations (automatic inclusion);
b) VAT payment or payable whichever is higher, of at least P100,000 for the preceding year;
c) Annual income tax due of at least P200,000 for the preceding year;
d) Total percentage tax paid of at least P100,000 for the preceding year;
e) Gross sales of P10,000,000 and above for the preceding year;
f) Gross purchases of P5,000,000 and above for the preceding year;
g) Total excise tax payment of at least P100,000 for the preceding year. (RR 14-2008)
103. What are the obligations of Top 20,000 Corporate Taxpayers?
a) In addition to the above responsibilities of a withholding agent, Top 20,000 private

corporations shall withhold the one percent (1%) creditable expanded withholding tax on the
purchase of goods and two percent (2%) on the purchase of services (other than those
covered by other withholding tax rates) from local suppliers where it regularly makes
purchases. However, casual purchase of goods shall not be subject to withholding tax unless
the amount of purchase at any one time involves P10,000 or more, in which case, it shall
then be required to withhold the tax. The same rule apply to local/resident supplier of
services other than those covered by separate rates of withholding tax. Provided, however,
that for purchases involving agricultural products in their original state, the tax required to
be withheld shall only apply to purchases in excess of the cumulative amount of P300,000
within the same taxable year. For this purpose, agricultural products in their original state
shall only include corn, coconut, copra, palay, rice cassava, sugar cane, coffee, fruits,
vegetables, marine food products, poultry and livestocks.
b) Taxes withheld shall be remitted using BIR Form 1601-E on a monthly basis thru the use
of the Electronic Filing and Payment System (EFPS) on the dates prescribed for e-filers.
Filing shall be done on a staggered basis provided under RR 26-2002 and payment shall be
made every 15th day following the end of the month for Jan-Nov and Jan. 20 of the
following year for the month of December.
c) Certificate of Creditable Tax Withheld at Source (BIR Form No. 2307) shall be issued to
the payees within twenty (20) days following the close of such payees taxable quarter or
upon demand of the payees;
d) A list of regular supplier of goods and/or services shall be submitted on a semestral basis
through e-submission facility or as an attachment under Electronic Filing and Payment
System (EFPS). Deadline for submission of the list is not later than July 31 and January 31
of each year. However, initial list of regular suppliers should be submitted within fifteen
(15) days from actual receipt hereof. (RR 14-2008)
104. Who are considered TOP 5,000 Individual Taxpayers?
Top 5,000 Individual Taxpayers shall refer to individual taxpayers engaged in trade or
business or exercise of profession who have been determined and notified by the Bureau of
Internal Revenue (BIR) as having satisfied any of the following criteria:
a) VAT payment or payable whichever is higher, of at least P100,000 for the preceding
year;
b) Annual income tax due of at least P200,000 for the preceding year;
c) Total percentage tax paid of at least P100,000 for the preceding year;
d) Gross sales of P10,000,000 and above for the preceding year;
e) Gross purchases of P5,000,000 and above for the preceding year;
f) Total excise tax payment of at least P100,000 for the preceding year. (RR 14-2008)
105. What are the obligations of Top 5,000 Individual Taxpayers?
a) In addition to the obligations of a withholding agent, Top 5,000 Individual Taxpayers

shall withhold the one percent (1%) creditable expanded withholding on the purchase of
goods and two percent (2%) on the purchase of services (other than those covered by
other withholding tax rates) from local suppliers where it regularly makes purchases.
However, casual purchase of goods shall not be subject to withholding tax unless the
amount of purchase at any one time involves P10,000 or more, in which case, it shall then
be required to withhold the tax. The same rule apply to local/resident supplier of services
other than those covered by separate rates of withholding tax. Provided, however, that for
purchases involving agricultural products in their original state, the tax required to be
withheld shall only apply to purchases in excess of the cumulative amount of P300,000
within the same taxable year. For this purpose, agricultural products in their original state
shall only include corn, coconut, copra, palay, rice cassava, sugar cane, coffee, fruits,
vegetables, marine food products, poultry and livestocks.
b) Taxes withheld shall be remitted under BIR Form 1601-E on a monthly basis thru the
Electronic Filing and Payment System (EFPS) facility within the prescribed period.
c) Certificate of Creditable Tax Withheld at Source (BIR Form No. 2307) shall be issued
to the payees within twenty (20) days following the close of such payees taxable quarter
or upon demand of the payees;
d) A list of regular supplier of goods and/or services shall be submitted on a semestral
basis through e-submission facility or as an attachment under Electronic Filing and
Payment System (EFPS). Deadline for submission of the list is not later than July 31 and
January 31 of each year. However, initial list of regular suppliers should be submitted
within fifteen (15) days from actual receipt hereof. (RR 14-2008)
106. What are the legal bases of Withholding tax?
Revenue Regulations No.2-1998
Revenue Regulations No.10-2008 & 14-2008
Revenue Memorandum Circular No.23-2013
Revenue Memorandum Circular No.5-2006 & 7-2006
o Sec.57-58 &78-83 of the National International Revenue Code
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Frequently Ask Questions about Withholding tax:

1. What is a Withholding Tax?

Withholding Tax on Compensation is the tax withheld from income payments to

3. If there is tax required to be remitted:

36. What is Miscellaneous Payroll period?

43. What is Fringe Benefits?

3. Are you receiving other allowances like laundry allowance, transportation

REVISED WITHHOLDING TAX TABLES1

Legend: Z-Zero exemption S-Single ME-Married Employee 1;2;3;4-Number of qualified

56. What is the latest Daily minimum wage in NCR?

New COLA New

Agriculture (Plantation and Non

Grants the following:

57. What is Cumulative average method?

3. If there is tax required to be remitted:

BIR FORM NO.

actresses, singers, lyricist,

income is P 720,000 and below

immigration and commercial brokers

Commission, rebates, discounts and

customers whose monthly electricity

five thousand (5,000) individual

Income payments received by Real

80. When is the deadline of BIR Form 1601-F in Manual filing?

Citizen or resident alien individual

Non-resident alien not engaged in

Non-resident foreign corporation

Resident citizen or alien individual

Citizen or resident alien individual

Non-resident alien not engaged in

Non-resident foreign corporation

Royalties on books, other

Citizen or resident alien individual

Interest income from longterm deposit or investment in

More than 5 years Exempt

Citizen or resident alien individual

Cash and/or property

Citizen or resident alien individual

Non-resident alien engaged in

Interest income from a

Yield from deposit substitutes

Non-resident alien not engaged in

Non-resident foreign corporation

Sale, exchange or other

Citizen or resident alien

Compensation income, except

Alien employees and Filipinos

Income derived from foreign

Profit remitted by Philippine

Head office of foreign corporation

Gross income from all sources 25%

Non-resident cinematographic film

Gross rentals, lease and

Non-resident owner of lessor of

Gross rentals, charter and

Non-resident lessor of aircraft,

machinery and other equipment

Interest on foreign loans

Non-resident foreign corporation