Bureau of Internal RevenueBureau of Internal RevenueRevenue Region 19Revenue Region 19

Davao CityDavao City

Expanded Withholding Tax Update

Top 20,000 Corporation Top 20,000 Corporation (RR 6-2009 dated 6-3-2009)(RR 6-2009 dated 6-3-2009)

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Income payments made by the top 20,000 private corporations (before 10,000 corp.)

Supplier of goods - 1% Supplier of services - 2%

Top 20,000 Corporation Top 20,000 Corporation (RR 6-2009 dated 6-3-2009)(RR 6-2009 dated 6-3-2009)

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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 P300,000.00 within the same taxable year.

Illustration:Illustration:Number of Transactions

Year Purchase Amount

One 2009 P 90,000

Two 2010 320,000

One 2011 400,000

One 2012 90,000

Amount of EWT:Amount of EWT:

In 2009 - not subjectIn 2010 - P20,000 x 1% = P200.00In 2011 - P100,000 x 2% = P1,000In 2012 - not subject

Top 20,000 Corporation Top 20,000 Corporation (RR 6-2009 dated 6-3-2009)(RR 6-2009 dated 6-3-2009)

Agricultural Products in their original state shall only include:

Top 5,000 Individual Taxpayer Top 5,000 Individual Taxpayer (RR 6-2009)(RR 6-2009)

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Income payments made by the top 5,000 individual taxpayer to their local/resident supplier of goods/services including non-resident alien engaged in trade or business in the Phils.

Supplier of goods - 1% Supplier of services - 2%

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Criteria for Top 20k Corp. and Top 5k Individual Taxpayers:

Tax payments/payable of preceding year:VAT - P100,000 Income Tax - 200,000Percentage Tax - 100,000Excise Tax - 100,000

Gross Sales of P10,000,000 and aboveGross Purchases of P5,000,000 and aboveDuly notified in writing by the

Commissioner

Revenue Memorandum Revenue Memorandum Circular No. 56-2009Circular No. 56-2009

Prescribing the use of the Updated Government Money Payment Chart

CREDITABLE FINAL

NATURE OF INCOME PAYMENT INCOME TAX

% TAX

VAT

Communication Services (Smart, PLDT, etc)2% 3% 5%

Repairs and Maintenance of Gov’t. Facilities and Vehicles

2% 3% 5%

Transport of Goods, Merchandise, Cargo

domestic –air, sea & land (w/in the Phils)

2% 3% 5%

domestic – air, sea & land (Phils to foreign country)

2% none none

Int’l. – air & sea (Phils. To Foreign) 2% 3% none

CREDITABLE FINAL

NATURE OF INCOME PAYMENT INCOME TAX

% TAX

VAT

Transport of Passengers:

domestic –air, & sea (w/in the Phils)

2% none 5%

domestic – land (w/in the Phils)2% 3% none

Int’l. – air & sea (Phils. To Foreign)2% 3% none

Purchase of Supplies & Materials, including equipments

1% 3% 5%

CREDITABLE FINAL

NATURE OF INCOME PAYMENT INCOME TAX

% TAX

VAT

Payment for Rental of Properties

1. Real Property 5% 3% 5%

2. Cinematographic films 5% 3% 5%

3. Personal Property (in excess of P10,000 except financial leasing)

5% 3% 5%

Payment for:

a. Use or Lease of property or property rights to non-resident owner

None None 12%

b. Services rendered by local insurance companies with respect to reinsurance premiums payable to non-residents

None None 12%

c. Other services rendered in the Phils. by non-residents None None 12%

CREDITABLE FINAL

NATURE OF INCOME PAYMENT INCOME TAX

% TAX

VAT

Payment to Water Distribution Utilities

Manila Water Company, Inc. 2% None 5%

Maynilad Water Services, Inc. (MWSI)* 2% None 5%

*Income Tax Holiday up to Dec. 31, 2009 (BIR Ruling No. DA-278-2009)

none none 5%

Other Water Utilities 2% 2% 5%

CREDITABLE FINAL

NATURE OF INCOME PAYMENT INCOME TAX

% TAX

VAT

Payment to Power Distribution Utilities 2% None 5%

Meralco, VECO, etc.

Electric Coops

1. Registered with NEA none none 5%

2. Registered with CDA

a. Do not transact with non-members none none 5%

b. Transacting w/ members & non-mem

b.1 With members none none 5%

b.2 With members and have an accumulated reserves and undivided net savings of not more than P10M

none none 5%

b.3 With members and have an accumulated reserves and undivided net savings of more than P10M

none none 5%

CREDITABLE FINAL

NATURE OF INCOME PAYMENT INCOME TAX

% TAX

VAT

Payment to Cooperatives (other than Electric Cooperatives duly registered with CDA)

SERVICES A. 1. With BIR issued exemption certificate - none none none

2. W/o BIR issued exemption certificate 2% none 5%

GOODS B. 1. With BIR exemption certificate none none none

2. Without BIR exemption certificate 1% none 5%

Payment for Trainings and Seminars 2% 3% 5%

Purchase of Gasoline/Petroleum Products 1% 3% 5%

For Services Rendered by Gasoline Stations 2% 3% 5%

CREDITABLE FINAL

NATURE OF INCOME PAYMENT INCOME TAX

% TAX

VAT

Payment of Insurance Premiums Non-Life 2% 3% 5%

Life 2% 5% none

Payment for Purchase of Library Books 1% none None

Payment for Purchase of Other Library Materials

1% 3% 5%

Payment for Services of the contractors: Security, Janitorial, Maintenance of aircon, computers, elevators, etc.

2% 3% 5%

Payment of Professional Services rendered by GPP

none 3% 5%

Payment of Professional Fee paid to Juridical Person

10% or 15% 3% 5%

Payment of Professional Fee paid to Individuals 10% or 15%

3% 5%

CREDITABLE FINAL

NATURE OF INCOME PAYMENT INCOME TAX

% TAX

VAT

Payment for Purchase of Other Goods (for casual or single purchase of P10k & above)

1% 3% 5%

Payment for Purchase of Agricultural Products (except corn, coconut etc. per RR 6-2009) 1% none none

Payment of Commissions or Service Fees Paid to Customs, Insurance, Real Estate, Stock, Immigration and Commercial Brokers

10% 3% 5%

Payment for Purchase of Services other than those covered by other rates of withholding tax (RR 17-2003) (for single or casual purchase or P10k & above)

2% 3% 5%

For Purchase of Land Classified as Ordinary Asset

1.5%, 3%, 5% or 6%

3% 5%

CREDITABLE FINAL

NATURE OF INCOME PAYMENT INCOME TAX

% TAX

VAT

For Land Improvements - goods -services

1%2%

3%3%

5%5%

For Buildings and Improvements Straight Contract (Labor & Materials)-Service 2% 3% 5%

Separate Invoice/Billing for Materials-goods 1% 3% 5%

Separate Invoice/Billing for Labor 2% 3% 5%

For Furniture, Fixtures, and Equipment 1% 3% 5%

For Information Technology (IT) Equipment - Services - Goods

1%2%

3%3%

5%5%

Payment to Radio & TV Broadcasting Companies Whose Annual Gross Receipts do not exceed P10M and who are Non-VAT reg. TP

2% 3% none

Payment to Agents of Foreign Insurance Companies –Insurance Agents 2% 10% none

CREDITABLE FINAL

NATURE OF INCOME PAYMENT INCOME TAX

% TAX

VAT

Payment to Agents of Foreign Insurance Companies – Owner of the Property 2% 5% none

Payment for Sale, barter or exchange of stocksListed and traded through Local Stock Exchange

2%½ of 1% none

Payment for shares of stock sold or exchanged through initial and secondary public offering -not over 2% -over 25% but not exceeding 33 1/3% - Over 33 1/3%

2%2%2%

4%2%1%

NoneNonenone

CREDITABLE FINAL

NATURE OF INCOME PAYMENT INCOME TAX

% TAX

VAT

Payment to Banks and Non-Bank Financial Intermediaries performing quasi-banking functions (Sec. 121 of RA 8424 as amended by RA 9337)

1.On interests, commissions and discounts from lending activities as well as income from financial leasing, on the basis of remaining maturities of instruments from which such receipts are derived: - Maturity period is 5 years or less - Maturity period is more than 5 years

2. On dividends and equity shares and net income of subsidiaries

2%

2%2%

2%

5%

5%1%

0%

None

noneNone

none

CREDITABLE FINAL

NATURE OF INCOME PAYMENT INCOME TAX

% TAX

VAT

3. On the following payments treated as gross income under Sec. 32 of the Tax Code:

-Royalties -Rental of Property -Profits for exchange and all other items treated as gross income

None 5%none

7%7%7%

NoneNoneNone

4. On the net trading gains within the taxable year on foreign currency, debt securities, derivatives, and other similar financial instruments

None 7% None

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Filing & Payment of Tax Returns

Forms to be used: 1601C – for withholding tax on wages 1601E – for expanded withholding tax * 1601F - For final taxes withheld * 1603 - For Fringe Benefit Tax 1600 - For government money payments *

* To be filed with Monthly Alphalist of Payees (MAP) under RR 2-2006

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Filing & Payment of Tax Returns

Certificate to be issued to payees: Form 2316 – for withholding tax on wages to be issued

not later than Jan. 31 of the following

year Form 2304 – For income payment not subject to withholding tax Form 2307 – for creditable withholding tax at source Form 2306 – for final withholding tax

Sa Krisis Bayan Sagipin, Sa Krisis Bayan Sagipin, Tamang Buwis Bayaran Tamang Buwis Bayaran

Natin!Natin!

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