Expanded Withholding Tax Seminar

Expanded Withholding Tax
Revenue Regulations No. 11-2018

Amending Certain Provisions of Revenue Regulations No. 2-98, as Amended, to
Implement Further Amendments Introduced by Republic Act No. 10963, Otherwise
Known as the “Tax Reform for Acceleration and Inclusion (TRAIN)” Law, Relative to
Withholding of Income Tax.
What is Expanded Withholding Tax (EWT)?
The Withholding of Creditable Tax at Source or simply called

Expanded Withholding Tax is a tax imposed and prescribed
on the items of income payable to natural or juridical
persons, residing in the Philippines, by a payor
corporation/person (withholding tax agent) which shall be
credited against the income tax liability of the taxpayer for
the taxable year.
How to determine you are a Withholding Tax
Agent
• Check your Certificate of Registration.
• Under the list of registered activities, check for “Expanded Withholding
Tax”
Income Payment By The National
Government Subject to Withholding Tax
* If the gross
income of the
individual
professional does
not exceed
P3,000,000, the
withholding tax
rate is 5%.
• For Corporations
10% - if gross income for the current year did not exceed P720,000
15% - if gross income for the current year exceed P720,000
Note: Provided, however, that for purchases involving agricultural products in their original state, the tax
required to be withheld under this sub-section shall only apply to purchases in excess of the cumulative amount
of Three Hundred Thousand Pesos (P300,000) within the same taxable year. For this purpose, agricultural
products in their original state as used in these regulations, shall only include corn, coconut, copra, palay, rice,
cassava, sugar cane, coffee, fruits, vegetables, marine food products, poultry and livestocks.
How the Withholding Agent Determine the Applicable
Withholding Tax Rates to be Applied to the Payee Engaged
in the Practice of Profession?
• The individual payee shall execute a sworn declaration (Annex B-1 of the RR)
and, together with a copy of COR, provide all income payors every January 15
of each year, or prior to the initial income payment, in order for professionals
and co be subject to lower tax rates (5%).
• The withholding agent shall likewise execute a sworn statement (Annex C of
the RR) declaring the number of payees who have executed sworn declaration
(Annex B-1, B-2, B-3 of the RR), and submit the same not later than January
31 of each year or within fifteen (15) days following the month when new
recipient of income have submitted a sworn declaration with a copy of COR.
What shall be the Applicable Withholding Tax Rates
if
the Individual Payee did not Submit Any Sworn
Declaration to the Payor?
• The withholding agent shall withhold the higher rates
(10% for individuals and 15% for corporations).
• Given if the income payments to the individual or
corporation exceeded the threshold amount, the
withholding agent should subject the income payment at
the higher rates.
Returns and Payments
• Expanded Withholding Tax
• 0619-E (first 2 months of the quarter)
• BIR Form 1601-EQ w/ Quarterly Alphalist of Payees
• BIR Form 1604-E (Annual Information Return)
* Withholding agents with zero remittance are still required to file the
following BIR Forms
Deadline of filing and payment
• Manual
For the first two months of the quarter, Withheld taxes are required to be
remitted and the BIR Form 0619-E filed not later than the 10th day
following the close of the month.
For the calendar quarter, Withheld taxes shall b remitted and the BIR
form 1601-EQ shall be filed not later than the last day of the month
following the close of the quarter with the Quarterly Alphalist of Payees.
Example
January: Form to use: 0619-E; Deadline: February 10
February: Form to use: 0619-E; Deadline: March 10
March: Form to use: 1601-EQ ; Deadline: April 30
w/ Quarterly Alphalist of Payees
Annual Information Return
• Summarizes all the expanded withholding taxes for the year
• File BIR Form 1604-E on or before March 1 of the following year
Deadline of filing and payment
• eFPS
• Not later than the last day of the month following the close of the quarter
• But, withheld taxes are required to be remitted not later than the 15th day following
the close of the month (for the first two months of the quarter)
Quarterly Alphabetical List of Payees (QAP)
• Shall be filed on a quarterly basis

• Contains the ffg. information:
1. Name of Income Payees
2. Taxpayer Identification Number (TIN)
3. Amount of Income Payment segregated per month with a total for the
quarter (includes both income payments subjected and exempt from
withholding tax)
4. Amount of Taxes Withheld
Certificate/Statement of Tax Withheld at
Source
• Expanded/Creditable Withholding Tax
• BIR Form 2307 (20 days from the close of the quarter or
upon demand of the payee)
How to Compute the Tax
• 1: Identify whether the payee is a VAT-registered or Non-VAT registered
• 2: Determine the correct amount to be subjected with expanded
withholding tax
• 3: Multiply with the prescribed withholding tax
Example 1: Income Payment to VAT-
Registered
• Step 1: Monthly Rental, Inclusive of VAT P 11,200
• Divide: 112%
• Step 2: Monthly Rental, Net of VAT P 10,000
• Step 3: Multiply: Withholding Tax Rate 5%
Amount to be Remitted: P 500
Example 1: Income Payment to Non
VAT-Registered
• Step 1& 2: Monthly Rental, Non-VAT P 10,000
• Step 3: Multiply: Withholding Tax Rate 5%
Amount to be Remitted: P 500

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Expanded Withholding Tax

Revenue Regulations No. 11-2018

The Withholding of Creditable Tax at Source or simply called

• Shall be filed on a quarterly basis

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