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Implements Republic Act No. 8424, as amended, entitled "An Act Amending
The National Internal Revenue Code, As Amended" (effective January 1,
1998), specifically, Sections 24, 25, 27, 28, 30, 31, 32, 33, 35, 51(A)(2)(b), 57,
58, 59, 78, 79, 80, 81, 82, 83, 114 and Title V of the NIRC of 1997.
Amended by Revenue Regulations No. 3-98 (effective January 1, 1998)
Re: Implementing Section 33 of the National Internal Revenue Code, as
Amended by Republic Act No. 8424 Relative to the Special Treatment of
Fringe Benefits; Revenue Regulations No. 8-98 (dated August 25, 1998) Re:
Revenue Regulations Amending Pertinent Portions of Revenue Regulations
Nos. 11-96 and 2-98 Relative to the Tax Treatment on the Sale, Transfer or
Exchange of Real Property and for this Purpose Revising the Time and Place
of Payment of the Capital Gains Tax Due Thereon; Revenue Regulations No.
12-98 (dated August 14, 1998) Re: Amending Section 2.57.2 of Revenue
Regulations No. 2-98; Revenue Regulations No. 3-99 (dated January 22,
1999) Re: Further Amending Section 2 of Revenue Regulations No. 12-98;
Revenue Regulations No. 7-2000 (dated June 16, 2000) Re: Amending
Revenue Regulations No. 2-98; Revenue Regulations No. 8-2000 (dated
August 21, 2000) Re: Amending Sections 2.78.1(A)(1), (A)(3), (A)(6), (A)(7),
and (B)(11)(b) of Revenue Regulations No. 2-98, as Amended, and Section
2.33(C) of Revenue Regulations No. 3-98, with Respect to "De Minimis"
Benefits, Additional Compensation Allowance (ACA), Representation and
Transportation Allowance (RATA) and Personal Economic Relief Allowance
(PERA); Revenue Regulations No. 10-2000 (dated December 14, 2000) Re:
Further Amendments to Revenue Regulations No. 2-98 and 3-98, as Last
Amended by Revenue Regulations No. 8-2000; Revenue Regulations No.
6-2001 (dated July 31, 2001) Re: Amending Pertinent Provisions of Revenue
Regulations Nos. 1-98, 2-98, as Amended, and 7-95, as Amended, and
Revenue Memorandum Circular No. 1-98 Relative to the Inclusion of
Additional Taxpayers to be Subject to Final Withholding Tax, Revision of the
Withholding Tax Rates on Certain Income Payments Subject to Creditable
Withholding Tax, Time for the Filing of Various Tax Returns and Payment of
the Taxes Due Thereon And Others; Revenue Regulations No. 12-2001 (dated
September 7, 2001) Re: Amendment to the Pertinent Provisions of Revenue
Regulations No. 1-98, as Amended, Revenue Regulations No. 2-98, as
Amended, and Revenue Regulations No. 6-2001, Relative to the Revision of

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Withholding Tax Rates on Certain Income Payments Subject to Withholding


Tax, the Deferment of the New Deadline Dates For Filing Selected Tax
Returns, the Reporting Requirements for Recipients of Talent Fees, and for
Other Purposes; Revenue Regulations No. 3-2002 (dated March 22, 2002) Re:
Amending Section 2.58 and Further Amending Section 2.83 of Revenue
Regulations No. 2-98 as Amended, Relative to the Submission of the
Alphabetical Lists of Employees/Payees in Diskette Form and the Substituted
Filing of Income Tax Returns of Payees/Employees Receiving Purely
Compensation Income from Only One Employer for One Taxable Year Whose
Tax Due is Equal to Tax Withheld and Individual-Payees Whose
Compensation Income is Subject to Final Withholding Tax; Revenue
Regulations No. 4-2002 (dated March 26, 2002) Re: Amending the Due Date
for the Filing/Issuance of Certain BIR Tax Returns/Forms, Clarifying the
Form/Type to be Used on certain Transactions and Prescribing Certain
Attachments to Returns Filed; Revenue Regulations No. 14-2002 (dated
September 9, 2002) Re: Amending Further Pertinent Provisions of Revenue
Regulations No. 2-98, as amended; Revenue Regulations No. 19-2002 (dated
October 11, 2002) Re: Amending Revenue Regulations No. 3-2002 and Further
Amending Section 2.83 of Revenue Regulations No. 2-98 as Amended,
Relative to Substituted Filing of Income Tax Return of Employees Receiving
Purely Compensation Income from Only One Employer for One Taxable Year
Whose Tax Due is Equal to Tax Withheld and Individual-Payees Whose
Compensation Income is Subject to Final Withholding Tax; Revenue
Regulations No. 14-2003 (dated March 26, 2003) Re: Amending Revenue
Regulations No. 2-98, as amended, in order to simplify the collection of tax,
through withholding at the source, on sales of goods or services subject to the
3% percentage tax under Section 116 of the Code, and/or to the value-added
tax (VAT) under Sections 106 and 108 of the same Code; Revenue
Regulations No. 17-2003 (dated March 31, 2003) Re: Amending Further
Pertinent Provisions of Revenue Regulations No. 2-98, as Amended, Providing
for Additional Transactions Subject to Creditable Withholding Tax;
Re-Establishing the Policy that the Capital Gains Tax on the Sale, Exchange or
Other Disposition of Real Property Classified as Capital Assets Shall be
Collected as a Final Withholding Tax, Thereby Further Amending Revenue
Regulations Nos. 8-98 and 13-99, as Amended by Revenue Regulations No.
14-2000; and for Other Purposes; Revenue Regulations No. 28-2003 (dated
October 15, 2003) Re: Amending Further Pertinent Provisions of Revenue
Regulations No. 2-98 as Amended, Relative to the Issuance of Certificate of
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Value-Added Tax Withheld at Source, Thereby Amending Revenue


Regulations No. 4-2002; and for Other Purpose; Revenue Regulations No.
30-2003 (dated November 12, 2003) Re: Amending Further Pertinent
Provisions of Revenue Regulations No. 2-98, as Last Amended by Revenue
Regulations No. 17-2003, and Revenue Regulations No. 8-98, as Amended,
Providing for the Imposition of Final Withholding Tax on the Sale, Exchange
or Other Disposition of Real Property Classified as Capital Assets by
Non-resident Aliens, Increasing the Withholding Tax Rates on Certain Income
Payments, Inclusion of Certain Income Payments, Sanctions to be Imposed on
Payees Who Refuse the Withholding of Tax on Their Income/Receipts, and for
Other Purposes; Revenue Regulations No. 1-2004 (dated January 14, 2004)
Re: Amending Further Sec. 2.57.2(S) of Revenue Regulations No. 2-98, as
Last Amended By Revenue Regulations No. 30-2003, Exempting Marginal
Income Earners From Creditable Withholding Tax on Payments Made By
Hotels, Restaurants, Resorts, Caterers, Food Processors, Canneries,
Supermarkets, Livestock, Poultry, Fish and Marine Product Dealers,
Hardwares, Factories, Furniture Shops, and All Other Establishments;
Revenue Regulations No. 3-2004 (dated March 1, 2004) Re: Suspending the
implementation of withholding tax on income payments made to suppliers of
agricultural products under Section 2.57.2(S) of Revenue Regulations 2-98, as
amended by RR 17-2003, further amended by RR 30-2003 and 1-2004;
Revenue Regulations No. 8-2005 (dated February 23, 2005) Re: Amending
further pertinent provisions of Revenue Regulations No. 2-98, as last amended
by Revenue Regulations 3-2004, as Amended, providing for the inclusion of
Income Payments subject to Creditable Withholding Tax under Section
2.57.2(U) on Manila Electric Company (MERALCO) Refund arising from
Supreme Court Case G.R. No. 14814 of April 9, 2003 to Customers under
Phase IV as approved by Energy Regulatory Commission (ERC); Revenue
Regulations No. 1-2006 (effective January 1, 2006) Re: Amendments to
Sections 2.78.1(B), Section 2.79(A) and (F), 2.83.4(C) and 2.83.5 of Revenue
Regulations No. 2-98, as amended; Revenue Regulations No. 2-2006
(effective January 1, 2006) Re: Mandatory Attachments of the Summary
Alphalist of Withholding Agents of Income Payments Subjected to Tax
Withheld at Source (SAWT) to Tax Returns With Claimed Tax Credits due to
Creditable Tax Withheld At Source and of the Monthly Alphalist of Payees
(MAP) Whose Income Received Have Been Subjected to Withholding Tax to
the Withholding Tax Remittance Return Filed by the Withholding Agent/Payor
of Income Payments Withholding Tax At Source and of the Monthly Alphalist
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of Payees (MAP) Whose Income Received Have Been Subjected to


Withholding Tax in the Remittance Return Filed by the Withholding
Agent/Payor of Income Payment; Revenue Regulations No. 4-2008 (dated
February 19, 2008) Re: Amending the Venue for the Payment of Capital Gains
Tax, Creditable Withholding Tax and Documentary Stamp Taxes Due on
Onerous Transfers of Real Properties Owned by Taxpayers Classified as Large
Taxpayers Pursuant to Revenue Regulations No. 1-98, as Amended, thereby
Amending for this Purpose Pertinent Provisions of Revenue Regulations No.
8-98; Revenue Regulations No. 5-2008 (dated April 17, 2008) Re: Further
Amendments to Revenue Regulations Nos. 2-98 and 3-98, as Last Amended by
Revenue Regulations No. 10-2000, with Respect to "De Minimis Benefits";
Revenue Regulations No. 7-2008 (dated March 25, 2008) Re: Taxation on the
Sale to the Bangko Sentral ng Pilipinas of Gold and Other Metallic Mineral
Products Extracted or Produced by Small-Scale Miners, and Further Amending
Section 2.57 2 (T) of Revenue Regulations No. 2-98, as Amended; Revenue
Regulations No. 10-2008 (dated July 8, 2008) Re: Implementing Pertinent
Provisions of Republic Act No. 9504, "An Act Amending Sections 22, 24, 34,
35, 51, and 79 of Republic Act No. 8424, as Amended, Otherwise Known as
The National Internal Revenue Code" Relative to the Withholding of Income
Tax on Compensation and Other Concerns; Revenue Regulations No. 14-2008
(dated November 26, 2008) Re: Amending Further Section 2.57.2 (M) of
Revenue Regulations No. 2-98, as Amended, Increasing the Coverage of
Withholding Tax Agents Required to Withhold 1% from Regular Suppliers of
Goods and 2% from Regular Suppliers of Services from the Top 10,000 Private
Corporations to Top 20,000 Private Corporations; Revenue Regulations No.
2-2009 (dated February 4, 2009) Re: Amending Further Secs. 2.57.2 and 2.58
of Revenue Regulations No. 2-98, as Amended, Subjecting to Creditable
Withholding Tax the Interest Portion of the Refund of Meter Deposits by
MERALCO and Other Distribution Utilities to Residential and
Non-Residential Electricity Consumers/Customers; Revenue Regulations No.
5-2009 (dated May 13, 2009) Re: Reverting the venue for the filing of returns
and payment of Capital Gains Tax, Creditable Withholding Tax and
Documentary Stamp Tax due on the sale, transfer or exchange of real property
of large taxpayers to the place where the property is located; Revenue
Regulations No. 6-2009 (dated June 3, 2009) Re: Amending Further Pertinent
Provisions of Revenue Regulations (RR) No. 2-98, as Amended, Providing for
an Additional Criteria in the Determination of Top 20,000 Private
Corporations, Including the Threshold on Their Purchases of Agricultural
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Products, and Additional Transactions Subject to Creditable Withholding Tax


on Income Payments Made by the Top Five Thousand (5,000) Individual
Taxpayers Engaged in Trade/Business or Practice of Profession; Revenue
Regulations No. 8-2009 (dated October 22, 2009) Re: Amending Further Secs.
2.57.2 and 2.57.3 of Revenue Regulations No. 2-98, as Amended, Subjecting to
Creditable Withholding Tax the Income Payments Made by Political Parties
and Candidates of Local and National Elections of All Their Campaign
Expenditures and Income Payments Made by an Individual or Juridical Person
Forming Part of Their Campaign Contributions to Candidates of Local and
National Elections and to Political Parties; Revenue Regulations No. 10-2009
(No date supplied) Re: Amending Further Secs. 2.57.2 and 2.58 of Revenue
Regulations No. 2-98, As Amended, Clarifying that Sub-Paragraph (W) as
Recently Issued Under Revenue Regulations No. 8-2009 Should be
Sub-Paragraph (X), and Other Concerns; Revenue Regulations No. 5-2011
(dated March 16, 2011) Re: Further Amendments to Revenue Regulations Nos.
2-98 and 3-98, as Last Amended by Revenue Regulations No. 5-2008, with
Respect to "De Minimis Benefits"; Revenue Regulations No. 6-2012 (dated
April 2, 2012) Re: Taxation on the Sale of Gold and Other Metallic Minerals to
Bangko Sentral ng Pilipinas and Other Persons or Entities, Amending Revenue
Regulations No. 7-2008, and Further Amending Section 2.57.2 (T) of Revenue
Regulations No. 2-98, as Amended; Revenue Regulations No. 8-2012 (dated
May 11, 2012) Re: Further Amendments to Revenue Regulations Nos. 2-98
and 3-98, as Last Amended by Revenue Regulations Nos. 5-2008 and 5-2011,
with Respect to "De Minimis Benefits"; Revenue Regulations No. 14-2012
(dated November 7, 2012) Re: Proper Tax Treatment of Interest Income
Earnings on Financial Instruments and Other Related Transactions; Revenue
Regulations No. 10-2013 (dated May 2, 2013; effective June 1, 2013) Re:
Amending Further Pertinent Provisions of Revenue Regulations (RR) No.
2-98, as Last Amended by Revenue Regulations No. 30-2003, Providing for
the Inclusion of Real Estate Service Practitioners (i.e., Real Estate Consultant,
Appraiser and Broker) Who Passed the Licensure Examination Given by the
Real Estate Service Under the Professional Regulations Commission as
Defined in Republic Act No. 9646, "The Real Estate Service Act of the
Philippines" as Among Those Professionals Falling Under Section 2.57.2 (A)
(1) of RR 2-98, as Amended, and RR 14-2002 as Regards Income Payments to
Certain Brokers and Agents; Revenue Regulations No. 11-2013 (dated May
20, 2013) Re: Filing/Submission of Hard Copy of the Certificate of
Compensation Payment/Tax Withheld (BIR Form 2316) Covering Employees
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Who are Qualified for Substituted Filing, Thereby Amending Revenue


Regulations (RR) No. 2-98, as Last Amended by RR No. 010-08; Revenue
Regulations No. 12-2013 (dated July 12, 2013) Re: Amending Section 2.58.5
of Revenue Regulations No. 2-98, as Amended, Relative to the Requirements
for Deductibility of Certain Income Payments; Revenue Regulations No.
14-2013 (dated September 20, 2013; effective October 1, 2013) Re: Amending
Pertinent Provisions of Revenue Regulations No. 02-98, as Last Amended by
Revenue Regulations No. 30-2003 and Revenue Regulations No. 17-2003;
Revenue Regulations No. 1-2014 (dated December 17, 2013) Re: Amending
the Provisions of Revenue Regulations (RR) No. 2-98, as Further Amended by
RR No. 10-2008, Specifically on the Submission of Alphabetical List of
Employees/Payees of Income Payments; Revenue Regulations No. 11-2014
(dated December 5, 2014) Re: Amending Further the Provisions of Section
2.57.2 of Revenue Regulations No. 2-98, as Amended, Particularly Subsection
(M), (S), and (W), Creating a Separate Sub-Section for the Withholding of
Creditable Income Tax on Real Estate Investment Trust (REIT) and
Reclassifying the Treatment of Locally Produced Raw Sugar as a Separate
Subsection for Purposes of the Creditable Withholding Tax; and Revenue
Regulations No. 1-2015 (dated January 5, 2015) Re: Further Amendments to
Revenue Regulations Nos. 2-98 and 3-98, as Last Amended by Revenue
Regulations Nos. 5-2008, 5-2011 and 8-2012, with Respect to "De Minimis
Benefits".
Supersedes the following:
1.
Issuances on income tax withheld on compensation Revenue
Regulations No. 6-82 (dated October 1, 1982) Re: Collection at Source of
Income Tax on Compensation Income of Employed Resident Citizens and
Aliens, Non-Resident Citizens and Non-Resident Aliens Engage in Trade or
Business in the Philippines, and subsequent amendments made by Revenue
Regulations No. 6-83 (effective August 1, 1983) Re: Revenue Regulations
Implementing PD 1868 Granting Special Additional Personal Exemption,
Revenue Regulations No. 9-83 (effective October 24, 1983) Re: Supplemental
Regulations to Revenue Regulations No. 6-82, Revenue Regulations No. 2-85
(effective January 1, 1985) Re: Revised Withholding Tax Tables, Revenue
Regulations No. 12-86 (effective January 1, 1986) Re: Amending pertinent
provisions of the Revenue Regulations 6-82, as amended, otherwise known as
the Withholding Tax Regulations on Compensation, Revenue Regulations No.
1-92 (effective January 1, 1992) Re: Amending Pertinent Provisions of
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Revenue Regulations No. 6-82, As Amended by Revenue Regulations No.


12-86, Otherwise Known as the Withholding Tax Regulations On
Compensation and prescribing a Revised Withholding Tax Table therefore,
Revenue Regulations No. 3-92 (dated July 9, 1992) Re: Amending pertinent
provisions of Revenue Regulations No. 6-82, as last amended, by Revenue
Regulations No. 1-92 on the applicability/effectivity of the increased basic
personal and additional exemptions, allowable to individual taxpayers for
income tax purposes under Section 29 (1) of the National Internal Revenue
Code, as amended by Republic Act No. 7167, and prescribing the guidelines
for the credit/refund of excess withholding tax on compensation income for
1991, and Revenue Regulations No. 4-93 (dated November 27, 1992) Re:
Implementing Republic Act No. 7497, "An Act Amending Pertinent Provisions
of the National Internal Revenue Code, as amended, relative to the Final
Withholding Tax on Purely Compensation Income".
2.
Issuances on withholding on income subject to the expanded
withholding tax Revenue Regulations No. 6-85 (effective July 1, 1985)
Re: Revised and consolidated expanded withholding tax regulations, and
subsequent amendments made by Revenue Regulations No. 8-85 (dated
September 12, 1985) Re: Amending Revenue Regulations No. 6-85, Revenue
Regulations No. 13-86 (effective September 1, 1986) Re: Amending Revenue
Regulations No. 6-85 as amended by Revenue Regulations No. 8-85, Revenue
Regulations No. 1-89 (effective January 1, 1989) Re: Regulations amending
Revenue Regulations No. 6-85, otherwise known as the Revised and
Consolidated Expanded Withholding Tax Regulations, Revenue Regulations
No. 12-89 (effective January 1, 1990) Re: A Regulations Amending Revenue
Regulations No. 6-85, as amended, otherwise known as the Revised and
Consolidated Expanded Withholding Tax Regulations, Revenue Regulations
No. 1-90 (effective February 1, 1990) Re: Creditable withholding tax on sale,
exchange or transfer of real property, Revenue Regulations No. 8-90
(effective December 1, 1990) Re: Amendments to Sections 1, 2, and 9 of
Revenue Regulations No. 6-85, Revenue Regulations No. 2-91 (effective
March 11, 1991) Re: Amendments to Section 1(k) of Revenue Regulations No.
8-90, Revenue Regulations No. 4-91 (effective July 30, 1991) Re: Amending
Revenue Regulations No. 6-85 by inserting a paragraph (L) to Section 1 of said
Regulations, Revenue Regulations No. 6-94 (dated February 15, 1994) Re:
Amendments to Revenue Regulations No. 6-85, otherwise known as the
Expanded Withholding Tax Regulations, Revenue Regulations No. 7-94 (No
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date supplied 1994) Re: Amending the Effectivity Clause of Revenue


Regulations No. 6-94, Revenue Regulations No. 8-94 (effective July 1, 1994)
Re: Amending the effectivity clause of Revenue Regulations No. 6-94, as
amended by Revenue Regulations 7-94, Revenue Regulations No. 12-94
(dated June 27, 1994) Re: Amendments to Revenue Regulations No. 6-85, as
amended, Otherwise Known as the Expanded Withholding Tax Regulations,
and Revenue Regulations No. 16-94 (effective October 1, 1994) Re:
Amending certain Sections of Revenue Regulations No. 6-85 as amended by
Revenue Regulations No. 12-94, otherwise known as the Expanded
Withholding Tax Regulations.
See Issuances on Taxation of Certain Income Derived from Banking
Activities Revenue Regulations No. 12-80 (dated November 7, 1980) Re:
Taxation of Certain Income Derived from Banking Activities, and subsequent
amendments made by Revenue Regulations No. 8-81 (effective May 1, 1981)
Re: Amending Revenue Regulations No. 12-80 Governing the Taxation of
Certain Income Derived from Banking Activities, Revenue Regulations No.
1-84 (effective January 5, 1984) Re: Revised Quarterly and Annual Returns for
Taxes Withheld on Interest Paid by Banks and Quasi Banks, Revenue
Regulations No. 3-97 (effective January 2, 1997) Re: Amendment to Revenue
Regulations No. 12-80; Revenue Regulations No. 16-81 (dated July 24, 1981)
Re: Amending Revenue Regulations No. 13-78 otherwise known as the
Expanded Withholding Tax Regulations; Revenue Regulations No. 16-84
(effective October 15, 1984) Re: Imposition of Additional One Per Cent (1%)
Tax on the Gross Value Received by Banks, Non-Bank Financial
Intermediaries and Authorized Foreign Exchange Dealers; Revenue
Regulations No. 10-98 (dated August 25, 1998) Re: Implementing the
Provisions of the National Internal Revenue Code, As Amended By Republic
Act No. 8424, Relative to the Imposition of Income Taxes on Income Derived
Under the Foreign Currency Deposit and Offshore Banking Systems; Revenue
Regulations No. 13-2000 (dated November 20, 2000) Re: Implementing
Section 34(B) of the Tax Code of 1997 on the Requirements for Deductibility
of Interest Expense from the Gross Income of Taxpayer; Revenue Regulations
No. 1-2008 (dated February 1, 2008) Re: Amending Certain Provisions of
Revenue Regulations No. 10-2006 Prescribing the Guidelines and Conditions
for the Tax Treatment of Securities Borrowing and Lending Transactions
Involving Shares of Stock or Securities Listed in the Philippine Stock
Exchange; Revenue Regulations No. 5-2007 (dated March 6, 2007) Re:
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Prescribing the Guidelines and Conditions for the Tax Treatment of Securities
Borrowing and Lending (SBL) or Securities Lending Transactions (SLTs)
Involving the Fixed-Income Securities Lending Program of the Philippine
Dealing & Exchange Corp. (PDEx); Revenue Regulations No. 10-2006 (dated
June 23, 2006) Re: Prescribing the Guidelines and Conditions for the Tax
Treatment of Securities Borrowing and Lending Transactions Involving Shares
of Stock or Securities Listed in the Philippine Stock Exchange; Section 9 (c) of
Republic Act No. 9243 entitled "An Act Rationalizing the Provisions on the
Documentary Stamp Tax of the National Internal Revenue Code of 1997, as
Amended, and for Other Purposes" (approved February 17, 2004) and Revenue
Regulations No. 13-2004 (issued December 23, 2004) Re: Implementing the
Provisions of Republic Act No. 9243, An Act Rationalizing the Provisions on
the Documentary Stamp Tax of the National Internal Revenue Code of 1997, as
Amended, and for Other Purposes; Revenue Memorandum Circular No.
35-81 (dated October 12, 1981) Re: Publishing Questions and Answers on
Deposit Substitutes as Amended by Revenue Regulations Nos. 8-81 and 16-81;
Revenue Memorandum Circular No. 5-83 (dated October 11, 1983) Re:
Publishing Revenue Regulations No. 16-81 renumbering a pertinent subsection
thereof; Revenue Memorandum Circular No. 12-93 (dated October 23,
1993) Re: Administrative settlement of "back to back" loans tax cases;
Revenue Memorandum Circular No. 22-93 (No date supplied 1993) Re:
Extension of deadline from 31 March 1993 to 28 May 1993; Revenue
Memorandum Circular No. 77-2012 (dated November 22, 2012) Re:
Clarifying Certain Provisions of Revenue Regulations No. 14-2012 on the
Proper Tax Treatment of Interest Income Earnings on Financial Instruments
and Other Related Transactions; Revenue Memorandum Circular No.
81-2012 (dated December 10, 2012) Re: Supplemental Clarifications on the
Provisions of Revenue Regulations No. 14-2012 on the Proper Tax Treatment
of Interest Income Earnings on Financial Instruments and Other Related
Transactions; Revenue Memorandum Circular No. 84-2012 (dated
Clarifying Tax Treatment of Interest Income Earnings on Loans That are Not
Securitized, Assigned or Participated Out; and Revenue Audit Memorandum
Order No. 1-84 (dated January 24, 1984) Re: Tax Treatment of Certain Items
of Income Received by OBUs and FCDUs.
See earlier issuances on Taxation of Interest Income Derived from
Deposits and Yield from Deposit Substitutes Revenue Regulations No.
17-84 (dated October 12, 1984) Re: Income Taxation of Interest Income
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Derived from Deposits and Yield from Deposit Substitutes, and subsequent
amendments made by Revenue Regulations No. 23-84 (effective January 1,
1985) Re: Amending Revenue Regulations No. 17-84, Revenue Regulations
No. 3-85 (effective March 1, 1985) Re: Amending Revenue Regulations No.
23-84, and Revenue Regulations No. 10-86 (dated June 30, 1986) Re:
Amendment of Section 3 of Revenue Regulations No. 17-84; Revenue
Regulations No. 1-82 (date March 18, 1982) Re: Individual Income Tax as
Restructured by Batas Pambansa Blg. 135; Revenue Memorandum Circular
No. 35-81 (dated October 12, 1981) Re: Publishing Questions and Answers on
Deposit Substitutes as Amended by Revenue Regulations Nos. 8-81 and 16-81;
Revenue Memorandum Circular No. 31-84 (issued October 30, 1984) Re:
Publishing Section 21 (d), 24 (cc) and 53 (d) (1) of the National Internal
Revenue Code, as amended by Presidential Decree No. 1959; Revenue
Memorandum Circular No. 39-85 (dated September 16, 1985) Re: Publishing
Additional Questions and Answers On the Interpretation of the Provisions of
the National Internal Revenue Code, as Implemented by Revenue Regulations
Nos. 16-84 and 17-84 and, Revenue Memorandum Circular No. 27-84;
Revenue Memorandum Circular No. 28-86 (dated August 11, 1986) Re:
Clarifying the Provisions of Revenue Regulations No. 10-86, Amending
Revenue Regulations No. 17-84 on Income Taxation of Interest Income from
Deposits and Yield from Deposit Substitutes; Revenue Memorandum
Circular No. 32-86 (dated October 15, 1986) Re: Publishing Questions Raised
and Answers Given on The Interpretation of Certain Provisions of the Tax
Code and Revenue Regulations Regarding the Final Withholding Tax on
Interest Income from Deposits and Deposit Substitutes; and Revenue Audit
Memorandum Order No. 1-84 (dated January 24, 1984) Re: Tax Treatment
of Certain Items of Income Received by OBUs and FCDUs.
See Issuances on Exemptions from Final Withholding Income Tax on
Interest Income Derived from Deposits and Yield from Deposit Substitutes
Revenue Regulations No. 16-93 (dated April 22, 1993) Re: Republic Act
No. 7353, otherwise known as the Rural Banks Act of 1992, providing for the
Creation, Organization and Operation of Rural Banks and For Other Purposes;
Revenue Regulations No. 1-95 (dated January 24, 1995) Re: Rules and
Regulations to implement the tax incentives provisions under paragraphs (b)
and (c) of Section 12, Republic Act No. 7227 otherwise known as the Bases
Conversion and Development Act of 1992; Revenue Regulations No. 4-95
(dated June 15, 1995) Re: Republic Act No. 7906 otherwise known as the
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Thrift Banks Act of 1995, providing for the Regulation of the Organization and
Operations of Thrift Banks and For Other Purposes; Revenue Regulations No.
6-2010 (dated June 29, 2010) Re: Regulations Providing for the Policies,
Guidelines and Procedures in the Implementation of the Tax Subsidy Granted
Under Sections 17 (c) of Republic Act No. 3591 (Philippine Deposit Insurance
Corporation [PDIC] Charter), as Amended by Republic Act No. 9576;
Revenue Memorandum Circular No. 45-86 (dated December 5, 1986) Re:
Tax exemption of the (i) Government Service Insurance System and (ii) Social
Security System under Presidential Memorandum Order No. 42 dated
September 25, 1986; Revenue Memorandum Circular No. 45-95 (dated
December 11, 1995) Re: Tax Exemption of Interest Income and/or Yield from
the Philippine currency bank deposits and deposit substitutes of Non-stock,
Non-profit Private Educational Institutions; Revenue Memorandum Circular
No. 7-2001 (dated February 20, 2001) Re: Taxability of Thrift Banks Effective
January 1, 2000; and Revenue Memorandum Order No. 9-93 (effective
October 15, 1993) Re: Prescribing the guidelines and procedures in the
processing of claims for tax credit or refund of the then 15%, now 20% final
income tax withheld from interest income/yield from deposit substitute
instruments and interest income from Philippine currency bank deposits of
employees' trust/trusteed private employees retirement plans.
See issuances on Republic Act No. 7279, otherwise known as the "Urban
Development and Housing Act of 1992" Revenue Regulations No. 9-93
(dated March 4, 1993) Re: Republic Act No. 7279 otherwise known as the
Urban Development and Housing Act of 1992, providing tax incentives to
Government-owned and Controlled Corporations and Local Government Units
as well as Private Sector Participating in Socialized Housing and Community
Mortgage Program; Revenue Regulations No. 11-97 (dated July 4, 1997) Re:
Revised Revenue Regulations implementing Republic Act No. 7279, otherwise
known as the Urban Development and Housing Act of 1992, Providing Tax
Incentives to Government-Owned or Controlled Corporations and Local
Government Units, as well as Private Sector Participating in Socialized
Housing and Community Mortgage Program, amending for the purpose
pertinent provisions of Sections 2, 4 and 5 of Revenue Regulations No. 9-93;
Revenue Regulations No. 17-2001 (dated October 5, 2001) Re: Revenue
Regulations Implementing the Provisions on Community Mortgage Program
(CMP) of Republic Act No. 7279, otherwise known as the "Urban
Development and Housing Act of 1992"; Revenue Memorandum Circular
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No. 3-2001 (effective January 13, 2001) Re: Delegation of Authority to


Regional Directors to Issue Certain Rulings with Established Precedents;
Revenue Memorandum Circular No. 42-2001 (dated October 5, 2001) Re:
Circularizing the Tax Incentives of Sellers of Real Properties in Existing Areas
for Priority Development (APDs) Sites, and in other Areas that may be
Identified by the Local Government Units as Suitable for Socialized Housing
Projects under R.A. No. 7279, Otherwise Known as the "Urban Development
and Housing Act of 1992" and the Valuation of the Subject Real Properties for
National Internal Revenue Tax Purposes; Revenue Memorandum Circular
No. 43-2001 (dated October 8, 2001) Re: Circularizing the Memorandum of
Agreement between the National Home Mortgage Finance Corporation and the
Bureau of Internal revenue Streamlining the Procedures and Requirements for
the Implementation of the Tax Incentives Granted to Legally Organized
Associations Under the Community Mortgage Program Pursuant to Republic
Act No. 7279; Revenue Memorandum Circular No. 30-2009 (dated May 14,
2009) Re: Circularizing Relevant Portions of HUDCC Resolution No. 1, Series
of 2008, Approving the Adjustment of the Price Ceiling for Socialized
Housing; Revenue Memorandum Circular No. 36-2011 (dated August 26,
2011) Re: BIR Rulings on Socialized Housing Under Republic Act No. 7279;
Revenue Memorandum Circular No. 28-2013 (dated April 1, 2013) Re:
Revocation of BIR Ruling No. SH (044) 261-2008 dated October 30, 2008
pursuant to BIR Ruling No. 433-2012 dated June 25, 2012; Revenue
Memorandum Circular No. 35-2014 (dated May 8, 2014) Re: Circularizing
Relevant Portions of Housing and Urban Development Coordinating Council
(HUDCC) Resolution No. 1, Series of 2013, Approving the Adjustment of the
Price Ceiling for Socialized Housing; and Revenue Memorandum Circular
No. 36-2014 (dated May 8, 2014) Re: Clarifying the Price Ceiling of
Socialized Lot Only Pursuant to Revenue Regulations (RR) No. 11-97, RR
17-01 and Housing and Urban Development Coordinating Council (HUDCC)
Resolution No. 1, Series of 2013.
See issuances on Tax Clearance Certificates (TCLs) and Certificate
Authorizing Registration (CARs) for registration of transfers of real
properties and/or payment of capital gains tax on such transfers
Revenue Regulations No. 11-96 (dated August 7, 1996) Re: Revenue
Regulations prescribing the procedures in the preparation and issuance of Tax
Clearance Certificate by the Revenue District Officer upon payment of capital
gains tax, estate and donor's gift taxes, and expanded creditable withholding
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tax, for purposes of registration of transfers of real properties; Revenue


Regulations No. 8-98 (dated August 25, 1998) Re: Revenue Regulations
Amending Pertinent Portions of Revenue Regulations Nos. 11-96 and 2-98
Relative to the Tax Treatment on the Sale, Transfer or Exchange of Real
Property and for this Purpose Revising the Time and Place of Payment of the
Capital Gains Tax Due Thereon; Revenue Regulations No. 4-99 (dated March
9, 1999) Re: Further Amending Revenue Memorandum Order No. 29-86 dated
September 3, 1986, as Amended by Revenue Memorandum Order No. 16-88
dated April 18, 1988, as Further Amended by Revenue Memorandum Order
No. 27-89 dated April 18, 1989, and as Last Amended by Revenue
Memorandum Order No. 6-92 dated January 15, 1992 Relative to the Payment
of Capital Gains Tax and Documentary Stamp Tax on Extra-Judicial
Foreclosure Sale of Capital Assets Initiated by Banks, Finance and Insurance
Companies; Revenue Regulations No. 18-2001 (dated November 13, 2001)
Re: Guidelines on the Monitoring of the Basis of Property Transferred and
Shares Received, Pursuant to a Tax-Free Exchange of Property for Shares
under Section 40(C)(2) of the National Internal Revenue Code of 1997,
Prescribing the Penalties for Failure to Comply with such Guidelines, and
Authorizing the Imposition of Fees for the Monitoring Thereof; Revenue
Regulations No. 7-2003 (dated December 27, 2002) Re: Providing the
Guidelines in Determining Whether a Particular Real Property is a Capital
Asset or an Ordinary Asset Pursuant to Section 39(A)(1) of the National
Internal Revenue Code of 1997 for Purposes of Imposing the Capital Gains
Tax under Sections 24(D), 25(A)(3), 25(B) and 27(D)(5), or the Ordinary
Income Tax under Sections 24(A), 25(A) & (B), 27(A), 28(A)(1) and 28(B)(1),
or the Minimum Corporate Income Tax (MCIT) under Sections 27(E) and
28(A)(2) of the same Code; Revenue Regulations No. 9-2012 (dated May 31,
2012) Re: Implementing Sections 24(D)(1), 27(D)(5), 57, 106 and 196 of the
National Internal Revenue Code of 1997 on Non-Redemption of Properties
Sold During Involuntary Sales; Revenue Memorandum Circular No.
50-2003 (dated August 22, 2003) Re: Clarifying the Venue for Payment of
Capital Gains Tax/Creditable Expanded Withholding Tax and Corresponding
Documentary Stamp Tax Relative to the Sale of Real Properties by Insurance
Companies; Revenue Memorandum Circular No. 3-2007 (dated January 15,
2007) Re: Publishing the Full text of Memorandum Order No. 233 dated
December 11, 2006 issued by the President Gloria Macapagal-Arroyo
Directing the Land Registration Authority, through the concerned Register of
Deeds, to Annotate in the Transfer Certificate of Title the Serial Number of the
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Certificate Authorizing Registration issued by the Bureau of Internal Revenue,


and Other Pertinent Details; Revenue Memorandum Circular No. 72-2007
(dated October 9, 2007) Re: Circularizing the Full Text of Administrative
Order No. 186, Directing the City Assessor, Municipal Assessor and Provincial
Assessor to An notate in all Tax Declarations the Serial Number of the
Certificate Authorizing Registration Issued by the Bureau of Internal Revenue;
Revenue Memorandum Order No. 22-96 (dated August 5, 1996) Re:
Transitional Procedures for Processing Capital Gains Tax Returns; Revenue
Memorandum Order No. 34-96 (dated November 15, 1996) Re: Clarification
on the issuance of Tax Clearance Certificate under Revenue Regulations No.
11-96; Revenue Memorandum Order No. 17-97 (effective April 1, 1997) Re:
Policies and guidelines to be observed in the issuance of Tax Clearance
Certificates (TCLs) and Certificate Authorizing Registration (CARs) for
transfers of real properties under Revenue Regulations No. 11-96, amending
Revenue Memorandum Order No. 34-96 dated November 15, 1996; Revenue
Memorandum Order No. 92-98 (dated November 25, 1998) Re:
Implementing Policies, Guidelines and ITS Transition Procedures for the
Implementation of Revenue Regulation No. 8-98; Revenue Memorandum
Order No. 66-99 (dated August 9, 1999) Re: Revised Guidelines and
Procedures on the Issuance of Certificates Authorizing Registration (CARs)
and Reporting of Real and Personal Property Transactions; Revenue
Memorandum Order No. 13-2001 (effective May 22, 2001) Re: Revised
Guidelines and Procedures Regarding Issuance of Tax Verification Notices
(TVNs), Tax Clearance Certificates (TCLs) and Certificates Authorizing
Registration (CARs) in the Revenue District Offices; Revenue Memorandum
Order No. 32-2001 (effective November 28, 2001) Re: Guidelines
Implementing Revenue Regulations No. 18-2001 on the Monitoring of the
Basis of the Property Transferred and Shares of Stock Received Pursuant to
Section 40(C)(2) of the Tax Code of 1997, Revising and Updating the
Requirements and Conditions Precedent to the Non-Recognition of Gain or
Loss in Transactions Falling Thereunder, and Prescribing the Forms Therefor;
Revenue Memorandum Order No. 15-2003 (dated May 8, 2003) Re:
Policies, Guidelines and Procedures in the Processing and Monitoring of
One-Time Transactions (ONETT) and the Issuance of Certificates Authorizing
Registration (CARs) Covering Transactions Subject to Final Capital Gains Tax
on Sale of Real Properties Considered as Capital Assets as well as Capital
Gains Tax on the Net Capital Gain on Sale, Transfer or Assignment of Stocks
Not Traded in the Stock Exchange(s), Expanded Withholding Tax on Sale of
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Real Properties Considered as Ordinary Assets, Donor's Tax, Estate Tax and
Other Taxes including Documentary Stamp Tax Related to the Sale/Transfer of
Properties; and Revenue Memorandum Order No. 21-2003 (dated May 22,
2003) Re: Amending the Effectivity Clause of RMO No. 15-2003 dated May 8,
2003.
See issuances designating personnel of government offices as
withholding agents Revenue Regulations No. 1-87 (dated April 2, 1987)
Re: Regulations Implementing Executive Order No. 651 Requiring
Government Offices, Agencies and Instrumentalities to Comply Strictly with
the Laws and Regulations on Withholding of Taxes, Designating the
Appropriate Withholding Agents For Such Purpose, and Fixing Official
Responsibility Therefore; Revenue Regulations No. 6-96 (dated March 13,
1996) Re: Amendments to Revenue Regulations No. 1-87 Designating
Personnel of Government Offices as Withholding Agents and Fixing Official
Responsibilities, in Relation to Executive Order No. 651; Revenue
Regulations No. 10-97 (dated July 1, 1997) Re: Amendments to Revenue
Regulations No. 1-87, Designating Personnel of Government Offices as
Withholding Agents and Fixing Official Responsibilities, in Relation to
Executive Order No. 651; Revenue Memorandum Circular No. 40-2001
(issued September 25, 2001) Re: Publishing the Full Text of Department of
Interior and Local Government (DILG) Circular No. 99-151 dated August 14,
1999 Re: Implementation of the Withholding Tax System; Revenue
Memorandum Order No. 14-98 (effective December 10, 1997) Re:
Prescribing the Policies and Procedures to Implement Revenue Regulations
No. 10-97 Amending Revenue Regulations No. 1-87, in Relation to Executive
Order No. 651, Re: Designation of Government Officials as Withholding
Agents; and Revenue Memorandum Order No. 70-98 (effective July 27,
1998) Re: Amending Pertinent Provisions of Revenue Memorandum Order No.
14-98 Prescribing the Policies and Procedures to Implement Revenue
Regulations No. 10-97 Amending Revenue Regulations No. 1-87, in Relation
to Executive Order No. 651, Re: Designation of Government Officials as
Withholding Agents.
See issuances on withholding of taxes on certain money payments of
government offices, agencies and instrumentalities Revenue
Regulations No. 4-83 (dated March 15, 1983) Re: Revised regulations
implementing Republic Act No. 1051; Revenue Regulations No. 20-86
(effective October 13, 1986) Re: Revised Regulations amending Revenue
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Regulations No. 4-83 implementing Republic Act No. 1051; Revenue


Regulations No. 4-88 (effective January 21, 1988) Re: Regulations Amending
Certain Provisions of Revenue Regulations No. 20-86; Revenue Regulations
No. 10-93 (effective July 1, 1993) Re: Republic Act No. 7649, further
amending Section 110 of the National Internal Revenue Code, as amended,
requiring the withholding of creditable value-added tax; Revenue Regulations
No. 7-95 (dated December 9, 1995) Re: Consolidated Value-Added Tax
Regulations [and subsequent amendments thereto]; Revenue Memorandum
Circular No. 2-87 (dated January 14, 1987) Re: Correction of Section 3-C of
Revenue Regulations No. 20-86 or the Revised Regulations amending
Republic Act No. 1051; Revenue Memorandum Circular No. 18-88 (dated
March 24, 1988) Re: Effect of the implementation of E.O. No. 273 otherwise
known as the Value-Added Tax Law on the requirements of withholding and
remitting of taxes by government offices and agencies pursuant to R.A. No.
1051; Revenue Memorandum Circular No. 3-2000 (dated March 15, 2000)
Re: Publishing the full text of DOF-DBM-COA Joint Circular 1-2000 dated
January 3, 2000 Re: Guidelines in the remittance of all taxes withheld by
National Government Agencies (NGAs) to the Bureau of Internal Revenue; II,
A, 5; Revenue Memorandum Circular No. 60-2004 (dated August 20, 2004)
Re: Clarification regarding the withholding of creditable value-added tax by
government offices for purchases of P1,000.00 and below; Revenue
Memorandum Circular No. 62-2004 (dated August 31, 2004) Re: Prescribing
the use of the Government Expense Code Implementing Sections 2.57.2, 4.114
and 5.116 of Revenue Regulations No. 2-98 in relation to Sections 57(B),
114(c) and 116 to 123 of Republic Act No. 8424; Revenue Memorandum
Circular No. 5-2006 (dated November 2, 2005) Re: Prescribing the use of the
Government Money Payment Chart Implementing Sections 2.57.2, 4.114 and
5.116 of Revenue Regulations No. 2-98 as amended by Revenue Regulations
No. 16-2005 in relation to Sections 57(B), 114(C) and 116 to 123 of Republic
Act No. 8424 as amended by Republic Act No. 9337; Revenue Memorandum
Circular No. 56-2009 (dated August 10, 2009) Re: Prescribing the Use of the
Updated Government Money Payment Chart (Annex "A") to Implement
Sections 2.57.2, 4.114 and 5.116 of Revenue Regulations (RR) No. 2-98, as
Amended by RR No. 16-2005, in Relation to Sections 57 (B), 114 (C) and 116
to 123 of Republic Act (RA) No. 8424, as Amended by RA No. 9337,
Amending for the Purpose Revenue Memorandum Circular No. 5-2006 (RMC
5-2006); Revenue Memorandum Circular No. 49-2011 (dated October 3,
2011) Re: Further Clarification on RMC No. 38-2011 on Expanded
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Withholding Tax Obligation of Philippine Health Insurance Corporation


(PHIC) Including the Income Tax Withholding Obligation of Hospitals/Clinics
on Case Rates of PHIC and the Matter of 5% Final Withholding VAT for
Government Money Payments; Revenue Memorandum Circular No.
23-2012 (dated February 14, 2012) Re: Reiteration of the Responsibilities of
the Officials and Employees of Government Offices for the Withholding of
Applicable Taxes on Certain Income Payments and the Imposition of Penalties
for Non-Compliance Thereof; Revenue Memorandum Order No. 27-95
(dated August 8, 1995) Re: Requiring all Revenue District Officers to Conduct
Spot Checking/Verification on Compliance by Government Agencies and
Instrumentalities on the Withholding Tax Laws and Regulations; Revenue
Memorandum Order No. 88-99 (dated October 13, 1999) Re: Strict
Monitoring and Verification of Government Offices' Compliance to the
Withholding Tax Requirements as part of the "Government Withholding Tax
Program"; Revenue Memorandum Order No. 16-2000 (dated April 3, 2000)
Re: Prescribing the Policies and Procedures for Processing and Monitoring of
Withholding Tax Payments from National Government Agencies (NGAs);
Revenue Memorandum Order No. 27-2001 (effective October 22, 2001) Re:
Amending Specific Provisions of Revenue Memorandum Order No. 16-2000
re: Prescribing the Policies and Procedures for Processing and Monitoring of
Withholding Tax Payments from National Government Agencies (NGAs);
Revenue Memorandum Order No. 8-2003 (dated March 3, 2003) Re:
Compliance of Local Government Units (LGUs), National Government
Agencies (NGAs) and other government offices to withholding tax laws, rules
and regulations and to clarify and identify the officials responsible for
withholding of tax and its remittance; Revenue Memorandum Order No.
13-2006 (dated July 13, 2006) Re: Prescribing Policies and Procedures in
Monitoring the Local Government Units' (LGUs) Compliance with
Withholding Tax Rules and Regulations; and Revenue Audit Memorandum
Order No. 5-86 (effective May 21, 1986) Re: Guidelines in the Verification of
Withholding Taxes.
See issuances on synchronization of withholding tax payments
Revenue Regulations No. 5-85 (dated March 19, 1985) Re: Synchronization
of the time and manner of remitting taxes withheld under Sections 53, 54 and
93 of the National Internal Revenue Code; Revenue Regulations No. 3-93
(dated January 8, 1993) Re: Amending Revenue Regulations No. 5-85;
Revenue Regulations No. 4-93 (dated November 27, 1992) Re: Implementing
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Republic Act No. 7497, "An Act Amending Pertinent Provisions of the
National Internal Revenue Code, as amended, relative to the Final Withholding
Tax on Purely Compensation Income"; Revenue Regulations No. 18-93 (dated
October 25, 1993) Re: Amending Further Revenue Regulations No. 5-85, as
amended by Revenue Regulations No. 3-93; Revenue Regulations No. 1-98
(effective April 8, 1998) Re: Re-Defining the Term "Large Taxpayers",
Modifying the Criteria for Determining Large Taxpayers, and Prescribing the
Time, Place and Manner of Filing of Tax Returns and Payment of Taxes by
Large Taxpayers Amending Further RR No. 12-93, as Amended by RR 3-94;
Revenue Regulations No. 6-2001 (dated July 31, 2001) Re: Amending
Pertinent Provisions of Revenue Regulations Nos. 1-98, 2-98, as Amended, and
7-95, as Amended, and Revenue Memorandum Circular No. 1-98 Relative to
the Inclusion of Additional Taxpayers to be Subject to Final Withholding Tax,
Revision of the Withholding Tax Rates on Certain Income Payments Subject to
Creditable Withholding Tax, Time for the Filing of Various Tax Returns and
Payment of the Taxes Due Thereon And Others; Revenue Regulations No.
9-2001 (dated August 3, 2001) Re: Electronic Filing of Tax Returns and
Payment of Taxes; and subsequent amendments made by Revenue
Regulations No. 2-2002 (dated March 5, 2002) Re: Amending the Coverage of
the Electronic Filing and Payment System (EFPS) By Making It Mandatory for
Large Taxpayers and Optional for Certain Identified Non-Large Taxpayers to
Avail of the EFPS in the Filing of Their Tax Returns and the Payment of Taxes
Due Thereon; Revenue Regulations No. 9-2002 (dated June 28, 2002) Re:
Amending Further Revenue Regulations No. 9-2001, as Amended by Revenue
Regulations No. 2-2002, Implementing Filing of Tax Returns and Payment of
Taxes thru the Electronic Filing and Payment System (EFPS) and likewise
amending partly RR No. 1-98; Revenue Regulations No. 26-2002 (dated
December 5, 2002) Re: Amending Further Revenue Regulations No. 9-2001,
as Amended by Revenue Regulations No. 2-2002 and Revenue Regulations
No. 9-2002, Providing for the Staggered Filing of Returns of Taxpayers
Enrolled in the Electronic Filing and Payment System (EFPS) Based on
Industry Classification; Revenue Regulations No. 5-2004 (dated April 26,
2004) Re: Amending Further Revenue Regulations (RR) No. 9-2001, as
Amended by RR No. 2-2002, RR No. 9-2002 and RR No. 26-2002, Providing
for Additional Tax Returns/Forms Which Shall be Filed thru the Electronic
Filing and Payment System (EFPS), Revising the Requirements for Enrollment
of Taxpayers, and Expanding the Coverage Thereof to Include the Top 10,000
Private Corporations Duly Identified Under RR No. 17-2003; Revenue
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Regulations No. 10-2007 (dated July 18, 2007) Re: Amends further Section 3
of RR No. 9-2001 expanding the coverage of taxpayers required to file returns
and pay taxes through the Electronic Filing and Payment System; Revenue
Regulations No. 3-2009 (dated February 9, 2009) Re: Amending Further
Revenue Regulations (RR) No. 9-2001, As Amended by RR No. 2-2002, RR
No. 9-2002, RR No. 26-2002, RR No. 5-2004, and RR No. 10-2007 Expanding
the EFPS Coverage to Include the Top 20,000 Private Corporations Duly
Identified Under RR No. 14-2008; and Revenue Regulations No. 1-2010
(dated January 21, 2010) Re: Amending Further Section 3 of Revenue
Regulations (RR) No. 9-2001, as Last Amended by RR No. 10-2007,
Expanding the Coverage of Taxpayers Required to File Returns and Pay Taxes
Through the Electronic Filing and Payment System (EFPS) of the Bureau of
Internal Revenue; Revenue Regulations No. 12-2001 (dated September 7,
2001) Re: Amendment to the Pertinent Provisions of Revenue Regulations No.
1-98, as Amended, Revenue Regulations No. 2-98, as Amended, and Revenue
Regulations No. 6-2001, Relative to the Revision of Withholding Tax Rates on
Certain Income Payments Subject to Withholding Tax, the Deferment of the
New Deadline Dates For Filing Selected Tax Returns, the Reporting
Requirements for Recipients of Talent Fees, and for Other Purposes; Revenue
Regulations No. 17-2010 (dated November 26, 2010) Re: Consolidated
Regulations Implementing Republic Act No. 7646, An Act Authorizing the
Commissioner of Internal Revenue to Prescribe the Place for Payment of
Internal Revenue Taxes by Large Taxpayers and Prescribing the Coverage and
Criteria for Determining Large Taxpayers; Revenue Regulations No. 1-2013
(dated January 23, 2013) Re: Further Expands the Coverage of Taxpayers
Required to File Tax Returns and Pay Taxes Through the Electronic Filing and
Payment System (eFPS) to Include National Government Agencies (NGAs)
Mandatorily Required to Use the Electronic Tax Remittance Advice (eTRA);
Revenue Memorandum Circular No. 42-85 (dated October 16, 1985) Re:
Publishing the New BIR Form No. 1743-w, Revising BIR Forms W-1A, W-1,
1743-A1, 1743-A and 1743-C; Revenue Memorandum Circular No. 28-92
(dated June 2, 1992) Re: Publishing the full text of Republic Act No. 7497,
otherwise known as the "Finality of the Withholding Tax on Purely
Compensation Income"; and Revenue Memorandum Circular No. 3-98
(dated January 14, 1998) Re: Clarification on the Schedule of
Payment/Remittance of Taxes Withheld on Compensation, Creditable
Expanded Withholding Tax and Final Tax.

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See issuances on filing of quarterly income tax returns and payment


of estimated tax by an individual Revenue Regulations No. 7-93
(effective January 4, 1993) Re: Filing of quarterly income tax returns and
payment of quarterly income tax by individuals receiving self-employment
income; Revenue Memorandum Circular No. 63-93 (dated November 8,
1993) Re: Deferment of the Implementation of the Effectivity of Revenue
Regulations No. 7-93 from 1993 to 1994; Revenue Memorandum Circular
No. 11-98 (dated April 1, 1998) Re: Clarification of the Conflict Between the
Tax Code of 1997 and Revenue Regulations 7-93 with Respect to the
Prescribed Dates of Filing of Quarterly Income Tax Return and Payment of
Estimated Tax by an Individual; and Revenue Memorandum Circular No.
17-98 (dated May 15, 1998) Re: Waiver of Penalties for Self-Employed
Individuals and Professionals Who Failed to Submit Their First Quarter
Income Tax Returns for 1998 on April 15, 1998, but Nonetheless Filed Their
Return on or Before May 15, 1998.
See issuances on transmittal and processing of withholding tax
returns Revenue Memorandum Circular No. 3-2006 (dated January 9,
2006) Re: Required File Structure in the Submission of the Summary Alphalist
of Withholding Agents of Income Payments Subjected to Tax Withheld at
Source (SAWT) as Mandatory Attachments to Tax Returns With Claimed Tax
Credits due to Creditable Withholding Tax At Source and of the Monthly
Alphalist of Payees (MAP) Whose Income Received Have Been Subjected to
Withholding Tax in the Remittance Return Filed by the Withholding
Agent/Payor of Income Payment; Revenue Memorandum Order No. 72-98
(dated July 27, 1998) Re: Revising the Format and Procedures in the
Preparation of the Monthly Report on Registration and Remittance of
Withholding Taxes (BIR Form W-7) and Accomplishment Report on
Pre-audited Withholding Tax Returns (BIR Form W-8), Pursuant to Revenue
Memorandum Order 29-95; Revenue Memorandum Order No. 80-98
(effective November 4, 1998) Re: Prescribing the Procedures in the Transmittal
and Processing of the Annual Information Return on Income Tax Withheld on
Compensation, Expanded and Final Withholding Taxes (BIR Form No.
1743-IR or 1604) and the Monthly Remittance Return of Internal Revenue
Taxes on Government Money Payments (BIR Form No. 750AV or 1600);
Revenue Memorandum Order No. 5-2001 (dated February 5, 2001) Re:
Prescribing the Policies and Procedures in the Receipt, Transmittal and
Processing of the Alphabetical List of Employees/Income Payees as an
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attachment to the Annual Information Return (BIR Form No. 1604-CF and
1604-E) filed in diskette form by Large Taxpayers, Excise Taxpayers and other
Taxpayers/Withholding Agents (WAs) whose number of Employees or Income
Payees are fifty (50) or more and other taxpayers WAs who opted to file in
diskette; and Revenue Regulations No. 7-2000 (dated June 16, 2000) Re:
Amending Revenue Regulations No. 2-98.
See other issuances on compensation income Revenue Regulations
No. 3-2001 (dated April 3, 2001) Re: Granting Moratorium on the Withholding
of Income Tax On the Compensation Income of Public Elementary and
Secondary School Teachers Employed by the National Government; Revenue
Memorandum Circular No. 28-82 (dated December 22, 1982) Re: Treatment
of fixed or variable transportation, representation and other allowances, and
extension of time to furnish BIR Form W-2; Revenue Memorandum
Circular No. 1-83 (dated January 4, 1983) Re: Modification of Revenue
Memorandum Circular No. 28-82 regarding Treatment of Fixed or Variable
Transportation, representation and other allowances; Revenue Memorandum
Circular No. 16-83 (dated May 31, 1983) Re: Treatment of Fixed or Variable
Transportation, Representation/Entertainment and Other Allowances under
Sec. 2(c) of Revenue Regulations No. 6-82; Revenue Memorandum Circular
No. 15-87 (dated April 1, 1987) Re: Tax treatment of subsistence, clothing and
quarters allowances paid to the personnel of the Armed Forces of the
Philippines (AFP); Revenue Memorandum Circular No. 83-91 (dated
November 12, 1991) Re: Publishing the Resolution of the Supreme Court in
the case of "Commissioner of Internal Revenue vs. The Court of Appeals and
Efren P. Castaeda", G.R. No. 96016 promulgated October 17, 1991, Re:
non-taxability of terminal leave pay received by officials/employees retiring
from the government service; Revenue Memorandum Circular No. 50-92
(dated November 25, 1992) Re: Tax Treatment of Loyalty Cash Award;
Revenue Memorandum Circular No. 23-2001 (dated May 22, 2001) Re: An
Act Exempting from Tax Certain Allowances and Benefits Granted to the
Members of the Armed Forces of the Philippines; Revenue Memorandum
Circular No. 21-2010 (dated March 8, 2010) Re: Reiteration of the Applicable
Penalties for Employers Who Fail to Withhold, Remit, Do the Year-End
Adjustment and Refund Employees of the Excess Withholding Taxes on
Compensation; Revenue Memorandum Circular No. 27-2011 (dated July 1,
2011) Re: Revocation of BIR Ruling Nos. 002-99, DA-184-04, DA-569-04 and
DA-087-06; Revenue Memorandum Circular No. 39-2012 (dated August 3,
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2012) Re: Withholding of Income Tax on Backwages, Allowances, and


Benefits Received by Employees through Garnishments of Debts or Credits
Pursuant to a Labor Dispute Award; Revenue Memorandum Circular No.
46-2013 (dated May 26, 2013) Re: Clarification on the Taxability of Benefits
under Collective Negotiations Agreement (CNA) Granted to Government
Employees' Organizations Duly Approved/Accredited by the Civil Service
Commission (CSC); Revenue Memorandum Order No. 36-84 (effective
October 26, 1984) Re: Verification of Gross Compensation Income of
Employees of Private Firms; Revenue Audit Memorandum Order No. 1-87
(dated April 23, 1987) Re: Guidelines in the Verification of Housing, Travel
Representation Entertainment and Advertising Expenses, and other deductions
from taxable income; Revenue Memorandum Order No. 63-98 (effective
July 13, 1998) Re: Prescribing the Form to be Used in the Remittance of Taxes
on Fringe Benefits; Revenue Memorandum Order No. 17-99 (effective
February 22, 1999) Re: Prescribing Policies, Guidelines and Procedures on the
Filing of Tax Returns of Purely Compensation Income Earners Without Cash
or Check Payments (BIR Form No. 1700) and the Processing of Refundable
Income Tax Returns of Employees with Excess Withholding Taxes on
Compensation Income; Revenue Memorandum Order No. 26-2011 (dated
June 13, 2011) Re: Guidelines in the Tax Treatment of Separation Benefits
Received by Officials and Employees on Account of Their Separation from
Employment Due to Death, Sickness or Other Physical Disability and the
Issuance of Certificate of Tax Exemption from Income Tax and from the
Withholding Tax; and Revenue Memorandum Order No. 36-2011 (dated
September 28, 2011) Re: Amendment to Revenue Memorandum Order No.
26-2011 Providing for Guidelines in the Tax Treatment of Separation Benefits
Received by Officials and Employees on Account of Their Separation from
Employment Due to Death, Sickness or Other Physical Disability and the
Issuance of Certificate of Tax Exemption from Income Tax and from the
Withholding Tax.
See issuances on RATA and PERA Revenue Regulation No.
17-2011 (dated October 27, 2011) Re: Implementing the Tax Provisions of
Republic Act No. 9505, Otherwise Known as the "Personal Equity and
Retirement Account (PERA) Act of 2008"; Revenue Memorandum Circular
No. 60-91 (dated July 9, 1991) Re: Tax Treatment of Representation and
Transportation Allowances (RATA) granted to public officer or employee
under the General Appropriations Act; Revenue Memorandum Circular No.
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68-91 (dated July 26, 1991) Re: Grant of Personnel Economic Relief
Allowance (PERA) To All Employees Of The Government; Revenue
Memorandum Circular No. 15-92 (dated March 11, 1992) Re: Tax Treatment
of Personnel Economic Relief Allowance (PERA); Revenue Memorandum
Circular No. 46-92 (dated October 2, 1992) Re: Recomputation of Income
Tax for 1991 for purposes of the credit/refund of excess withholding tax; and
Revenue Memorandum Circular No. 1-95 (dated January 18, 1995) Re:
Second Year Implementation Of The New Salary Schedule In The
Government.
See issuances on private retirement benefit plan Revenue
Regulations No. 1-68 (dated March 25, 1968) Re: Private Retirement Benefit
Plan Regulations; Revenue Regulations No. 1-83 (dated October 28, 1982)
Re: Amendments to Revenue Regulations No. 1-68 or the Private Retirement
Benefit Plan Regulations; Revenue Regulations No. 11-2001 (dated
September 3, 2001) Re: Amendments to Revenue Regulations No. 1-68, as
amended by Revenue Regulations No. 1-83, otherwise known as the Private
Retirement Benefit Plan Regulations; Revenue Memorandum Circular No.
10-83 (dated February 22, 1983) Re: Clarification on the amendments by
Revenue Regulations No. 1-83 of Revenue Regulations No. 1-68 otherwise
known as the Private Retirement Benefit Plan Regulations; Revenue
Memorandum Order No. 9-93 (effective October 15, 1993) Re: Prescribing
the guidelines and procedures in the processing of claims for tax credit or
refund of the then 15%, now 20% final income tax withheld from interest
income/yield from deposit substitute instruments and interest income from
Philippine currency bank deposits of employees' trust/trusteed private
employees retirement plans; and Revenue Memorandum Circular No.
39-2014 (dated May 12, 2014) Re: Clarifying the Tax Treatment of Payouts by
Employee Pension Plans.
See issuances on Special Purpose Vehicle Revenue Regulations No.
6-2004 (dated March 31, 2004) Re: Implementing The Tax Exemptions and
Privileges Granted Under Republic Act No. 9182, Otherwise Known As "The
Special Purpose Vehicle (SPV) Act of 2002"; and Revenue Regulations No.
9-2005 (effective March 19, 2005) Re: Amending Pertinent Provisions of
Revenue Regulations (RR) No. 06-04 Relative to the Tax Exemptions and
Privileges Granted Under Republic Act No. 9182, Otherwise Known As "The
Special Purpose Vehicle (SPV) Act of 2002 (the "Act")".
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See new law and issuances on "Senior Citizens Act" Republic Act
No. 9257 entitled "An Act Granting Additional Benefits and Privileges to
Senior Citizens Amending for the Purpose Republic Act No. 7432, Otherwise
Known as "An Act to Maximize the Contribution of Senior Citizens to Nation
Building, Grant Benefits and Special Privileges and for Other Purposes"
(approved February 26, 2004); Republic Act No. 9994 entitled "An Act
Granting Additional Benefits And Privileges To Senior Citizens, Further
Amending Republic Act No. 7432, As Amended, Otherwise Known As 'An
Act To Maximize The Contribution Of Senior Citizens To Nation Building,
Grant Benefits And Special Privileges And For Other Purposes'" (approved
February 15, 2010); Revenue Regulations No. 4-2006 (dated December 2,
2005) Re: Implementing the Tax Privileges Provisions of Republic Act No.
9257, otherwise known as the "Expanded Senior Citizens Act of 2003", and
Prescribing the Guidelines for the Availment Thereof; Revenue Regulations
No. 1-2007 (dated December 4, 2006) Re: Amending Revenue Regulations No.
4-2006 Implementing the Tax Privileges Provisions of R.A. No. 9257,
Otherwise Known as the expanded Senior Citizens Act of 2003; Revenue
Regulations No. 7-2010 (dated July 20, 2010) Re: Implementing the Tax
Privileges Provisions of Republic Act No. 9994, Otherwise Known as the
"Expanded Senior Citizens Act of 2010", and Prescribing the Guidelines for
the Availment Thereof; Revenue Regulations No. 8-2010 (dated September 3,
2010) Re: Amending Revenue Regulations No. 7-2010 Implementing the Tax
Privileges Provisions of R.A. No. 9994, Otherwise Known as the "Expanded
Senior Citizens Act of 2010"; Revenue Memorandum Circular No. 45-2010
(dated June 2, 2010) Re: Circularizing Section 4 of Republic Act No. 9994, An
Act Granting Additional Benefits and Privileges to Senior Citizens, Further
Amending Republic Act No. 7432, as Amended, Otherwise Known as "An Act
to Maximize the Contribution of Senior Citizens to Nation Building, Grant
Benefits and Special Privileges and for Other Purposes"; and Revenue
Memorandum Circular No. 38-2012 (dated August 3, 2012) Re: Questions
and Answers Further Clarifying the Provisions of Revenue Regulations (RR)
No. 7-2010, as amended by RR No. 8-2010, Implementing the Tax Privileges
Provisions of Republic Act (RA) No. 9994, Otherwise Known as the
"Expanded Senior Citizens Act of 2010".
See issuances on Managerial and Technical Positions of Filipino
personnel employed by Regional or Area Headquarters (RHQs) and
Regional Operating Headquarters (ROHQs) of multinational companies
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Revenue Regulations No. 11-2010 (dated October 26, 2010) Re: Further
Clarifying the Term "Managerial and Technical Positions" Under Section
2.57.1 (D) of Revenue Regulations (RR) No. 2-98, as Amended, by RR No.
12-2001, Implementing Section 25 (C) of the National Internal Revenue Code
of 1997 (Tax Code), as Amended and Modifying for this Purpose Revenue
Memorandum Circular (RMC) No. 41-09 Including Guidelines on Availment
of the Fifteen Percent (15%) Preferential Income Tax Rate for Qualified
Filipino Personnel Employed by Regional or Area Headquarters (RHQs) and
Regional Operating Headquarters (ROHQs) of Multinational Companies;
Revenue Memorandum Circular No. 41-2009 (dated July 23, 2009) Re:
Clarifying the Meaning of the Term "Managerial and Technical Positions"
under Section 25 (C) of the Tax Code of 1997, as Amended, and for Other
Purposes; Revenue Memorandum Circular No. 82-2010 (dated November 5,
2010) Re: Clarification on the Filing of BIR Form No. 1947 Pursuant to the
Provisions of Revenue Regulations No. 11-2010 Dated October 28, 2010
Clarification on the Filing of BIR Form No. 1947 Pursuant to the Provisions of
Revenue Regulations No. 11-2010 Dated October 28, 2010; and Revenue
Memorandum Circular No. 85-2010 (dated November 12, 2010) Re: Grace
Period on Filing of BIR Form No. 1947 Pursuant to the Provisions of Revenue
Regulations No. 11-2010 Dated October 28, 2010 and Revenue Memorandum
Circular No. 82-2010 Dated November 5, 2010.
See issuances related to General Professional Partnerships - Revenue
Memorandum Circular No. 6-2003 (dated January 15, 2003) Re: Clarifying
Certain Issues Relative to the Services Rendered by Individual Professional
Practitioners, General Professional Partnerships, Entertainers, and Professional
Athletes Who Are Subject to the Value-Added Tax or Percentage Tax,
Whichever is Applicable, Beginning January 1, 2003; Revenue Memorandum
Circular No. 3-2012 (dated January 11, 2012) Re: Tax Implications of General
Professional Partnership; Revenue Memorandum Circular No. 89-2012
(dated December 27, 2012) Re: Clarifying the Tax Implications and Recording
of Deposits/Advances Made by Clients of General Professional Partnerships
for Expenses; Revenue Memorandum Circular No. 16-2013 (dated February
8, 2013) Re: Clarifying the Tax Implications and Recording of
Deposits/Advances for Expenses Received by Taxpayers Not Covered by
Revenue Memorandum Circular No. 89-2012; and Revenue Memorandum
Circular No. 60-2014 (dated July 24, 2014) Re: Clarification on the
Applicability of Revenue Memorandum Circular (RMC) No. 8-2014 to
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General Professional Partnership (GPP) in Relation to RMC No. 003-12.


See issuances on Privilege Stores - Revenue Regulations No. 16-2003
(dated March 31, 2003) Re: Implementing the Provisions of Sections 6, 244
and 245 in Relation to Sections 24, 25, 27, 28, 51, 52, 106, 108, 114, 116, and
128 of the National Internal Revenue Code of 1997 (Code), Imposing Advance
Payment of Value-added Tax or Percentage Tax and of Income Tax on
"Privilege-Store" and Prescribing and Reiterating the Obligations of Organizer
or Exhibitor of Space for the Operation of "Privilege-Store," as Well as of the
"Privilege-Store" Operators; Revenue Regulations No. 24-2003 Re:
Amending Pertinent Provisions of Revenue Regulations No. 16-2003 Relating
to the Taxation of Privilege Stores; Revenue Regulations No. 16-2013 (dated
August 22, 2013) Re: Revoking Revenue Regulations Nos. 16-2003 and
24-2003 Relating to Taxation of Privilege Stores and Imposing New Rules; and
Revenue Memorandum Circular No. 80-2007 (dated December 4, 2007) Re:
Prescribing the Establishment of "BIR-On-Wheels " by the Revenue District
Offices Where there are Taxpayers Engaged in the Business of Privilege
Stores/"Tiangges", Bazaars and Like Establishments.
See issuances on Shares of Stock Held as Capital Assets - Revenue
Regulations No. 6-2008 (dated April 22, 2008) Re: Consolidated Regulations
Prescribing The Rules on the Taxation of Sale, Barter, Exchange or Other
Disposition of Shares of Stock Held as Capital Assets; and seusequent
amendments made by Revenue Regulations No. 16-2012 (dated November 7,
2012) Re: Tax Treatment of Sales, Barters, Exchanges or Other Dispositions of
Shares of Stock of Publicly-Listed Companies Whose Public Ownership Levels
Fall Below the Mandatory Minimum Public Ownership (MPO) Level,
Monitoring of These Companies and Their Stock Transactions, and Amending
Revenue Regulations No. 06-08 for the Purpose; and Revenue Regulations
No. 6-2013 (dated April 11, 2013) Re: Amending Certain Provision of
Revenue Regulations No. 06-2008 Entitled Consolidated Regulations
Prescribing the Rules on the Taxation of Sale, Barter, Exchange or Other
Disposition of Shares of Stock Held as Capital Assets; Revenue
Memorandum Circular No. 21-2008 (dated February 29, 2008) Re:
Clarification on the Persons Liable to the Tax Imposed under Section 127 of
the Tax Code and the Crediting of Tax Collection to the Appropriate Office of
the Bureau of Internal Revenue; and Revenue Memorandum Circular No.
37-2012 (dated August 3, 2012) Re: Clarifying Section 11 of Revenue
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Regulations No. 06-08.


See issuances on Election Campaign Funds/Contribution - Revenue
Regulations No. 7-2011 (dated February 16, 2011) Re: Policies in the Tax
Treatment of Campaign Contributions and Expenditures; Revenue
Memorandum Order No. 35-2009 (dated November 11, 2009) Re: Project
"Iboto Mo"; Revenue Memorandum Circular No. 63-2009 (dated October
22, 2009) Re: Primer on Creditable Withholding Tax on Campaign
Expenditures Prescribed in Revenue Regulations No. 8-2009; Revenue
Memorandum Circular No. 40-2010 (dated May 25, 2010) Re: Guidelines in
Registration, Update and Tagging of Registration Information of Political
Parties, Candidates & Campaign Contributors Relative to Revenue
Memorandum Order No. 35-2009 Re: Project "Iboto Mo"; Revenue
Memorandum Circular No. 15-2013 (dated February 12, 2013) Re:
Publishing and Implementing Pertinent Provisions of Resolution No. 9476
Issued by the Commission on Elections (COMELEC) on June 2012; and
Revenue Memorandum Circular No. 48-2013 (dated June 28, 2013) Re: Tax
Compliance Reminders under the May 13, 2013 Midterm Elections.
See other issuances on withholding taxes under Revenue Regulations
No. 2-98 Revenue Memorandum Circular No. 5-98 (dated January 22,
1998) Re: Prescribing the Use of the Revised Withholding Tax Table
Implementing Section 24(A)(1)(c) in Relation to Section 79 of Republic Act
No. 8424; Revenue Memorandum Circular No. 21-98 (dated May 25, 1998)
Re: Circularizing Department (DOF) Order 37-98 dated May 20, 1998
Extending the Grace Period for Compliance of Revenue Regulations 2-98;
Revenue Memorandum Circular No. 4-99 (dated January 7, 1999) Re:
Prescribing the Use of the Revised Withholding Tax Table Implementing
Section 24(A)(1)(c) in Relation to Section 79 of Republic Act No. 8424;
Revenue Memorandum Circular No. 16-2000 (dated October 16, 2000) Re:
Monetization of Leave Credits of Government Officials and Employees;
Revenue Memorandum Circular No. 35-2003 (dated June 16, 2003) Re:
Guidelines Relating to the Filing and Remittance of Taxes Withheld on Income
Payments Made to Suppliers of Agricultural Products, for the Month of June,
Under Section 2.57.2(S) of Revenue Regulations No. 2-98 as amended by
Revenue Regulations No. 17-2003; Revenue Memorandum Circular No.
48-2004 (dated July 19, 2004) Re: Revocation/Cancellation of BIR Ruling
Nos. 076-88 (3/4/88), 004-89 (1/19/89) and 191-89 (9/4/89) Pursuant to CTA
Case No. 5233; Revenue Memorandum Circular No. 72-2004 (dated
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November 16, 2004) Re: Clarification of Issues on the Additional Transactions


Subject to Creditable Withholding Tax under Revenue Regulations No.
17-2003 (RR 17-2003), as amended by RR 30-2003, RR 1-2004 and RR
3-2004; Revenue Memorandum Circular No. 9-2006 (dated January 25,
2006) Re: Clarifying the Amount Subject to VAT and Expanded Withholding
Tax (Income Tax) of Brokers and Others Similarly Situated and the Other
Parties with Whom They Transact Business; Revenue Memorandum
Circular No. 35-2006 (dated June 21, 2006) Re: Clarifying the proper VAT
and EWT treatment of freight and other incidental charges billed by Freight
Forwarders; Revenue Memorandum Circular No. 39-2007 (dated January
22, 2007) Re: Clarifying the Income Tax and VAT Treatment of Agency
Fees/Gross Receipts of Security Agencies Including the Withholding of Taxes
Due thereon; Revenue Memorandum Circular No. 44-2007 (dated July 6,
2007) Re: Clarifying the Taxability of Agricultural Suppliers for Withholding
Tax Purposes In Respect to Sales Made to Top 10,000 Corporations And to the
Government In Relation to Revenue Regulations No. 3-2004 Which Suspended
the Implementation of Withholding Tax on Income Payments Made to
Suppliers of Agricultural Products under Section 2.57.2(S) of Revenue
Regulations (RR) No. 2-98, as Amended; Revenue Memorandum Circular
No. 45-2007 (dated July 6, 2007) Re: Reiteration of the Mandated Duty of
the Top 10,000 Private Corporations and of the Government to Withhold Not
Only on Their Purchase of Goods But Also on their Purchase of Services
Pursuant to Revenue Regulations No. 2-98, as Amended; Revenue
Memorandum Circular No. 34-2008 (dated April 15, 2008) Re: Tax
Treatment of Director's Fees for Income Tax and Business Tax Purposes;
Revenue Memorandum Circular No. 77-2008 (dated November 24, 2008)
Re: Taxability of Director's Fees Received by Directors Who are Not
Employees of the Corporation for VAT or Percentage Tax Purposes as
Espoused under Revenue Memorandum Circular No. 34-2008; Revenue
Memorandum Circular No. 85-2012 (dated December 26, 2012) Re:
Withholding Tax Statement for Taxes Withheld at Source; Revenue
Memorandum Circular No. 63-2013 (dated September 26, 2013) Re:
Clarification on the Taxable Year Covered by Revenue Regulations No.
12-2013; Revenue Memorandum Circular No. 5-2014 (dated January 29,
2014) Re: Clarifying the Provisions of Revenue Regulations No. 1-2014
Pertaining to the Submission of Alphabetical List of Employees/Payees of
Income Payments; Revenue Memorandum Circular No. 8-2014 (dated
February 6, 2014) Re: Presentation of Tax Exemption Certificate or Ruling by
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Exempt Individuals and Entities; Revenue Memorandum Circular No.


73-2014 (dated September 12, 2014) Re: Clarification of Withholding Tax
Rates on Dividend Payments to Philippine Central Depository (PCD)
Nominees; Revenue Memorandum Order No. 4-2004 (dated January 30,
2004) Re: Defining Guidelines Relating to Registration of Agricultural
Supplier as Marginal Income Earners and their Exemption From the 1%
Creditable Withholding Tax on Payments Made by Hotels, Restaurants,
Resorts, Caterers, Food Processors, Canneries, Supermarkets, Livestock,
Poultry, Fish and Marine Product Dealers, Hardwares, Factories, Furniture
Shops and All Other Establishment; and Revenue Memorandum Order No.
47-2004 (dated July 15, 2004) Re: Prescribing Policies and Procedures in
Monitoring, Identification for Inclusions or Deletions of Withholding Agents
Classified as Top 10,000 Private Corporations (TTCs) under Section 2.57.2
(M) of Revenue Regulations No. 2-98, as amended by RR 17-2003, Standard
Format in the Submission of the List of Regular Suppliers and Establishing
Key Performance Indicator (KPI).
See other issuances for additional information Revenue
Regulations No. 13-99 (dated July 26, 1999) Re: Exemption of Certain
Individuals from the Capital Gains Tax on the Sale, Exchange or Disposition of
a Principal Residence under Certain Conditions, and subsequent amendment
made by Revenue Regulations No. 14-2000 (dated November 20, 2000) Re:
Amending Sections 2(2), 3 and 6 of Revenue Regulations No. 13-99 vis-a-vis
sale, exchange or disposition, by a natural person, of his "Principal Residence";
Revenue Regulations No. 19-2001 (dated November 6, 2001) Re: Amendment
to the Agreement Between the Bureau of Internal Revenue and the Authorized
Agent Bank (AAB) Relative to the Collection of Internal Revenue Tax
Liabilities Through the Banking System Pursuant to Executive Order No. 937,
as Implemented by Revenue Regulations No. 5-84, as Amended; Revenue
Regulations No. 2-2005 (dated February 8, 2005) Re: Consolidated Revenue
Regulations Implementing Relevant Provisions of Republic Act No. 7227
otherwise known as "Bases Conversion and Development Act of 1992",
Republic Act 7916 as amended otherwise known as "Special Economic Zone
Act of 1995", Republic Act No. 7903 otherwise known as "Zamboanga City
Special Economic Zone Act of 1995" and Republic Act No. 7922 otherwise
known as "Cagayan Special Economic Zone Act of 1995" Thereby Amending
Revenue Regulations No. 1-95 as amended by Revenue Regulations No. 16-99;
Revenue Regulations No. 11-2005 (effective March 5, 2005) Re: Regulations
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Defining "Gross Income Earned" to Implement the Tax Incentive Provision in


Section 24 of Republic Act No. 7916, otherwise known as "The Special
Economic Zone Act of 1995" Revoking Section 7 of Revenue Regulations No.
2-2005, and Suspending the Effectivity of Certain Provisions of Revenue
Regulations No. 2-2005; Revenue Regulations No. 12-2005 (effective March
5, 2005) Re: Regulations Defining "Gross Income" to Implement the Tax
Incentive Provision under Paragraph (c) of Section 4 of Republic Act No.
7922, otherwise known as "Cagayan Special Economic Zone Act of 1995" and
Paragraph (f) of Section 4 of Republic Act No. 7903, otherwise known as
"Zamboanga City Special Economic Zone Act of 1995", Revoking Section 7 of
Revenue Regulations No. 2-2005 and Suspending the Effectivity of Certain
Provisions of Revenue Regulations No. 2-2005; Revenue Regulations No.
13-2005 (effective March 5, 2005) Re: Regulations Defining "Gross Income
Earned" to Implement the Tax Incentive Provision under Paragraph (c) of
Section 12 of Republic Act No. 7227, otherwise known as "The Bases
Conversion Development Act of 1992" Revoking Section 7 of Revenue
Regulations No. 2-2005, and Suspending the Effectivity of Certain Provisions
of Revenue Regulations No. 2-2005; Revenue Regulations No. 12-2010
(issued October 18, 2010) Re: Regulations Providing for the Policies,
Guidelines and Procedures in the Implementation of the Tax Subsidy to be
Granted by the Fiscal Incentives Review Board to the Millennium Challenge
Account-Philippines for the Philippine Compact Program; Revenue
Regulations No. 16-2010 (issued November 25, 2010) Re: Guidelines, Rules
& Procedures in the Filing of Confidential Information & the Investigation of
Cases Arising Therefrom; Revenue Regulations No. 2-2011 (dated March 1,
2011) Re: Filing of Income Tax Return and/or Annual Information Return by
Individuals, Including Estates and Trusts; Revenue Regulations No. 13-2011
(dated July 25, 2011) Re: Implementing the Tax Provisions of Republic Act
No. 9856 Otherwise Known as "The Real Estate Investment Trust Act of
2009"; Revenue Regulations No. 5-2013 (dated March 21, 2013) Re: Tax
Treatment of Sale of Jewelry, Gold and Other Metallic Minerals to a
Nonresident Alien Individual Not Engaged in Trade or Business within the
Philippines or to a Nonresident Foreign Corporation; Revenue Memorandum
Circular No. 57-97 (dated December 3, 1997) Re: Publishing the Full Text of
the Letter from the Bangko Sentral ng Pilipinas Regarding the Effect of the
Liberalization of BSP Rules on Foreign Exchange and Foreign Trade
Transactions on the Processing of Applications for VAT Refunds; Revenue
Memorandum Circular No. 1-98 (dated January 2, 1998) Re: Salient Features
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of Certain Amendments to the National Internal Revenue Code (NIRC) Made


by R.A. No. 8424, Otherwise Known as the Comprehensive Tax Reform Act of
1997; Revenue Memorandum Circular No. 32-99 (dated May 3, 1999) Re:
Japanese Contractors Undertaking Overseas Economic Cooperation Fund of
Japan (OECF) Funded Project are Exempt From the Eight and One Half
Percent (8.5%) Creditable VAT Imposed Under Section 114 (C) of the Tax
Code of 1997 and to the One Percent (1%) Expanded Withholding Tax
Imposed Under Section 2.57.2 (E) of Revenue Regulations No. 2-98
Implementing Section 57(B) of the Tax Code of 1997; Revenue
Memorandum Circular No. 42-99 (dated June 2, 1999) Re: Amending
Revenue Memorandum Circular No. 32-99; Revenue Memorandum Circular
No. 14-2001 (dated March 12, 2001) Re: Lists of Requirements from
Taxpayers for Issuance of Certain Rulings with Established Precedents
Delegated to Regional Directors and to the Assistant Commissioner, Legal
Service under RMC Nos. 2-2001, 3-2001 and 10-2001; Revenue
Memorandum Circular No. 16-2001 (dated March 23, 2001) Re: Initial
Launching of e-Filing Component of the Automated Data Capture System
(ADCS), Otherwise Known as the e-Filing and e-Payment System for BIR
National Office Personnel; Revenue Memorandum Circular No. 21-2001
(dated March 16, 2001) Re: Publishing the Memorandum of Agreement
entered into by and among the Department of Finance, Bureau of Internal
Revenue, Department of the Interior and Local Government, League of
Provinces of the Philippines, League of Cities of the Philippines, League of
Municipalities of the Philippines and the Liga ng mga Barangay sa Pilipinas re:
commitment of all parties to help one another in the implementation of
strategies to enhance their tax enforcement and collection efforts by utilizing
all available resources necessary in the pursuit of these objectives; Revenue
Memorandum Circular No. 24-2001 (dated May 28, 2001) Re: Enrollment
Procedures Prior to Electronic Filing and Payment System (EFPS); Revenue
Memorandum Circular No. 51-2002 (dated November 14, 2002) Re:
Imposition of the Gross Receipts Tax under Sections 121 and 122 of the Tax
Code on items of gross income subject to final withholding tax and clarifying
the tax base thereof; Revenue Memorandum Circular No. 1-2003 (dated
December 27, 2002) Re: Clarifying Certain Provisions of Revenue Regulations
No. 3-2002 as amended by Revenue Regulations No. 19-2002 amending
Section 2.83 of Revenue Regulations 2-98 in relation to the Substituted Filing
of Income Tax Returns of Qualified Pure Compensation Income Earners;
Revenue Memorandum Circular No. 72-2003 (dated October 20, 2003) Re:
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Tax implications of Electric Cooperatives registered with the National


Electrification Administration and Cooperative Development Authority;
Revenue Memorandum Circular No. 76-2003 (dated November 14, 2003)
Re: Tax Exemptions of Non-Stock, Non-Profit Corporations Section 30, Tax
Code of 1997 and Non-stock, Non-Profit Educational Institutions under
Paragraph 3, Section 4, Article XIV of the Constitution; Revenue
Memorandum Circular No. 77-2003 (dated November 18, 2003) Re:
Classification of Payments for Software for Income Tax Purposes; Revenue
Memorandum Circular No. 72-2004 (dated November 16, 2004) Re:
Clarification of Issues on the Additional Transactions Subject to Creditable
Withholding Tax under Revenue Regulations No. 17-2003 (RR 17-2003), as
amended by RR 30-2003, RR 1-2004 and RR 3-2004; Revenue Memorandum
Circular No. 11-2005 (dated March 30, 2005) Re: Publishing the full text of
DOF Memorandum CVP-0333-DOF/2005 dated March 18, 2005 on the
Suspension of Revenue Regulations No. 2-2005; Revenue Memorandum
Circular No. 32-2005 (dated June 17, 2005) Re: Publishing the full text of
BIR Ruling No. 001-2005 dated June 16, 2005 subjecting the income realized
by enterprises registered under the Bases Conversion and Development Act of
1992 and the Philippine Economic Zone Act of 1995 that is not related to its
registered activity/ies to regular internal revenue taxes; Revenue
Memorandum Circular No. 43-2005 (dated August 30, 2005) Re: Prescribing
the Guidelines on the Proper Treatment of Shares of Stock Disposed of in the
Stock Exchange; Revenue Memorandum Circular No. 44-2005 (effective
September 1, 2005) Re: Taxation of Payments for Software; Revenue
Memorandum Circular No. 46-2005 (dated September 12, 2005) Re:
Prescribing the Guidelines on the Proper Treatment of Shares of Stock
Dispos3ed of in the Stock Exchange; Revenue Memorandum Circular No.
56-2005 (effective October 12, 2005) Re: Revocation of Revenue
Memorandum Circular No. 43-2005 Pertaining to Shares of Stock Disposed of
in the Stock Exchange; Revenue Memorandum Circular No. 30-2008 (dated
April 1, 2008) Re: Clarifying the Taxability of Insurance Companies for MCIT,
Business Tax, and Documentary Stamp Tax Purposes, as subsequently
amended by Revenue Memorandum Circular No. 59-2008 (dated August 23,
2008) Re: Amending Certain Portions of Revenue Memorandum Circular No.
30-2008 on the Subject of the Taxability of Insurance Companies for Minimum
Corporate Income Tax (MCIT), Business Tax and Documentary Stamp Tax
Purposes; Revenue Memorandum Circular No. 22-2009 (dated April 22,
2009) Re: Clarifying the Allowable Claims for Personal and Additional
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Exemptions and Optional Standard Deduction (OSD) Pursuant to Revenue


Regulations Nos. 10-2008 and 16-2008, Respectively; Revenue
Memorandum Circular No. 69-2009 (dated December 7, 2009) Re:
Mandatory Enrollment to and Availment of the Electronic Filing and Payment
System (eFPS) Facility for Selected Taxpayers; Revenue Memorandum
Circular No. 18-2010 (dated March 1, 2010) Re: Clarification on the
Coverage and Taxability of Amusement Places under Section 125 (b) of the
National Internal Revenue Code (Tax Code) of 1997, as Amended; Revenue
Memorandum Circular No. 18-2011 (dated April 12, 2011) Re: Income Tax
Exemption of Interest Income Earnings from Long Term Deposits or
Investment Certificates Under Secs. 24 (B) (1) & 25 (A) (2) of the National
Internal Revenue Code of 1997, as Amended; Revenue Memorandum
Circular No. 63-2012 (dated October 29, 2012) Re: Clarifying the Issues
Affecting Invoicing and Recording of Income Payments for Media Advertising
Placements; Revenue Memorandum Circular No. 91-2012 (dated December
28, 2012) Re: Supplement to Revenue Memorandum Circular No. 63-2012 on
Invoicing and Recording of Income Payments for Media Advertising
Placements; Revenue Memorandum Order No. 52-99 (dated May 17, 1999)
Re: Amendment to Certain Provisions of Revenue Memorandum Order No.
17-99 dated February 22, 1999 and Clarifications on the Processing of Income
Tax Returns with Second Installment and Refundable Returns; Revenue
Memorandum Order No. 75-99 (effective September 9, 1999) Re: Delegation
of Authority to Regional Directors to Issue Certain Rulings with Established
Precedents; Revenue Memorandum Order No. 32-2004 (dated July 2, 2004)
Re: Special Operations on Motels; Revenue Memorandum Order No.
22-2005 (dated August 2, 2005) Re: Prescribing the Guidelines and Procedures
in the Implementation of Revenue Regulation (RR) No. 8-2005 on the
Inclusion as Income Payments Subject to Creditable Withholding Tax the
Manila Electric Company (MERALCO) Refund to Phase IV Customers as
Approved by the Energy Regulatory Board (ERB) and Arising from the
Supreme Court Case G.R. 141314 of April 9, 2003; Revenue Memorandum
Order No. 23-2005 (effective August 17, 2005) Re: Audit/Investigation of
Withholding Tax Liabilities for Taxable Years 2003 and 2004 Including
Withholding Tax on Fringe Benefits; Revenue Memorandum Order No.
24-2005 (dated October 5, 2005) Re: Processing of Claims for Tax Refund of
Japanese Contractors and Nationals Undertaking Projects Funded by the
Overseas Economic Cooperation Fund of Japan (OECF); Revenue Audit
Memorandum Order No. 1-2000 (dated March 17, 2000) Re: Updated
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Handbook on Audit Procedures and Techniques Volume I (Revision Year


2000); and Revenue Audit Memorandum Order No. 2-2000 (dated February
28, 2000) Re: Bank Audit Manual.
See also later VAT issuance Revenue Regulations No. 16-2005
(dated September 1, 2005) Re: Consolidated Value-Added Tax Regulations of
2005.
1

Effective January 1, 1998.

Authority of Secretary of Finance to promulgate rules and regulations.

Withholding of tax at source, Returns and payment of taxes withheld at source,


and Tax on profits collectible from owner or other persons, respectively.

Title II, Chapter XIII, Withholding on Wages.

Return and payment of value-added tax (Withholding of creditable value-added


tax).

Title V, Other Percentage Taxes.

Section 2.57 (B) - Creditable Withholding Tax


7

Individual returns, and Corporation returns, respectively.

Section 2.57.1 - Income Payments Subject to Final Witholding Tax


8

See issuances on taxation of certain income derived from banking activities


Revenue Regulations No. 12-80, and subsequent amendments made by
Revenue Regulations No. 8-81, Revenue Regulations No. 1-84, and
Revenue Regulations No. 3-97; and Revenue Regulations No. 10-98.
See earlier issuances on taxation of interest income derived from deposits
and yield from deposit substitutes Revenue Regulations No. 17-84, and
subsequent amendments made by Revenue Regulations No. 23-84, Revenue
Regulations No. 3-85, and Revenue Regulations No. 10-86; and Revenue
Audit Memorandum Order No. 1-84.
See issuance on taxation of
securities borrowing and lending
transactions- Revenue Regulations No. 5-2007.

Section 2.57.1 (A) - Income Payments to a Citizen or to a Resident Alien Individual


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See amendments made by Section 2, Revenue Regulations No. 6-2001; and


Section 3, Revenue Regulations No. 17-2003.

10

Income tax rates (Rates of income tax on individual citizen and individual
resident alien of the Philippines).

11

See Revenue Regulations No. 10-98.

12

As amended by Section 2, Revenue Regulations No. 17-2003.


Original text:
SECTION 2.57.1. Income Payments Subject to Final Withholding Tax.
The following forms of income shall be subject to final withholding tax at
the rates herein specified;
(A) Income payments to a citizen or to a resident alien individual;
xxx

xxx

xxx

(6) On capital gains presumed to have been realized from the sale,
exchange or other disposition of real property located in the Philippines,
classified as capital assets, including pacto de retro sales and other forms of
conditional sales based on the gross selling price or fair market value as
determined in accordance with Sec. 6(E) of the Code (i.e. the authority of the
Commissioner to prescribe the real property values), whichever is higher Six
percent (6%).
In case of dispositions of real property made by individuals to the
government or any of its political subdivisions or agencies or to
government-owned or controlled corporations, the tax to be imposed shall be
determined either under Section 24(A) of the Code for normal income tax for
individual citizens and residents or under Section 24(D)(1) of the Code for the
final tax on capital gains from sale of property at six percent (6%), at the option
of the taxpayer.
xxx

xxx

xxx

As amended by Revenue Regulations No. 8-98.


SECTION 2.57.1. Income Payments Subject to Final Withholding Tax.
The following forms of income shall be subject to final withholding tax at
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the rates herein specified;


(A) Income payments to a citizen or to a resident alien individual;
xxx

xxx

xxx

(6) The rate of six percent (6%) shall be imposed on capital gains
presumed to have been realized by the seller from the sale, exchange or other
disposition of real properties located in the Philippines, classified as capital
assets, including pacto de retro sales and other forms of conditional sales based
on the gross selling price or fair market value as determined in accordance with
Section 6(E) of the Code (i.e., the authority of the Commissioner to prescribe
the real property values), whichever is higher.
In case of disposition of real property made by individuals to the
government or to any of its political subdivisions or agencies or to
government-owned or -controlled corporations, the tax to be imposed shall be
determined either under the normal income tax rate imposed in Section 24(A)
or under a final capital gains tax of six percent (6%) imposed under
Section 24(D)(1), both of the Tax Code of 1997, at the option of the taxpayer.

13

Power of the Commissioner to make assessments and prescribe additional


requirements for tax administration and enforcement.

14

Income tax rates (Capital gains from sale of real property).

15

See Section 2, Revenue Regulations No. 8-98 and Revenue Memorandum


Order No. 92-98. See also Revenue Memorandum Order No. 66-99,
Revenue Memorandum Order No. 13-2001, and Revenue Regulations No.
4-99.

16

Section 2.57.7 as added by Revenue Regulations No. 6-2001.

Section 2.57.1 (B) - Income Payment to Non-resident Aliens Engaged in Trade or


Business in the Philippines
17

As amended by Revenue Regulations No. 30-2003 and Revenue Regulations


No. 6-2001.

18

Tax on nonresident alien individual (Nonresident alien engaged in trade or


business within the Philippines).

19

Amended by Section 2, Revenue Regulations No. 30-2003.

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Original text of Section 2.57.1 (B)(3):


"Sec. 2.57.1. Income Payments Subject to Final Withholding Tax.
The following forms of income shall be subject to final withholding tax at the
rates herein specified.
xxx

xxx

xxx

(B) Income Payment to Non-resident Aliens Engaged in Trade or


Business in the Philippines. The following forms of income derived from
sources within the Philippines shall be subject to final withholding tax in the
hands of a non-resident alien individual engaged in trade or business within the
Philippines, based on the gross amount thereof and at the rates prescribed
therefor:
xxx

xxx

xxx

(3) On capital gains presumed to have been realized from the sale
exchange or other disposition of real property located in the Philippines,
classified as capital assets, including pacto de retro sales and other forms of
conditional sales based on the gross selling price or fair market value as
determined in accordance with Sec. 6(E) of the Code (i.e. the authority of the
Commissioner to prescribe zonal values), whichever is higher Six percent
(6%).
In case of dispositions of real property made by individuals to
government or any of its political subdivisions or agencies or to
government-owned or controlled corporations, the tax to be imposed shall be
determined either under Section 24(A) of the code for the normal rate of income
tax for individual citizens and residents or under Section 24(D)(1) of the Code
for the final tax on capital gains from sale of property at six percent (6%), at the
option of the taxpayer.

20

See Section 2, Revenue Regulations No. 8-98 and Revenue Memorandum


Order No. 92-98. See also Revenue Memorandum Order No. 66-99,
Revenue Memorandum Order No. 13-2001, and Revenue Regulations No.
4-99.

21

Section 2.57.1 (B)(4) added by Revenue Regulations No. 6-2001.

22

Section 2.57.1 (B)(5) added by Revenue Regulations No. 6-2001.

Section 2.57.1 (C) - Income Derived from All Sources Within the Philippines by a
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Non-resident Alien Individual Not Engaged in Trade or Business Within the Philippines
23

As amended by Section 2, Revenue Regulations No. 30-2003.


Original text of Section 2.57.1 (C) (2):
"Sec. 2.57.1. Income Payments Subject to Final Withholding Tax.
The following forms of income shall be subject to final withholding tax at the
rates herein specified.
xxx

xxx

xxx

(C) Income Derived from All Sources Within the Philippines by a


Non-resident Alien Individual Not Engaged in Trade or Business Within the
Philippines. The following forms of income derived from all sources within
the Philippines shall be subject to a final withholding tax in the hands of a
non-resident alien individual not engaged in trade or business within the
Philippines based on the following amounts and at the rates prescribed therefor:
xxx

xxx

xxx

(2) On capital gains presumed to have been realized from the sale,
exchange or other disposition of real property located in the Philippines,
classified as capital assets, including pacto de retro sales and other forms of
conditional sales based on the gross selling price or fair market value as
determined in accordance with Sec. 6(E) of the Code (i.e. the authority of the
Commissioner to prescribe the real property values), whichever is higher Six
percent (6%).
In case of dispositions of real property made by individuals to
government or any of its political subdivisions or agencies or to
government-owned or controlled corporations, the tax to be imposed shall be
determined either under Sec. 24(a) of the Code for the rates of income tax for
individual citizens and residents or under Sec. 24(D)(1) of the Code for the final
tax on capital gains from sale of property at six percent (6%), at the option of
the taxpayer.

See Section 2, Revenue Regulations No. 8-98 and Revenue


Memorandum Order No. 92-98. See also Revenue Memorandum Order
No. 66-99, Revenue Memorandum Order No. 13-2001, and Revenue
Regulations No. 4-99.
Section 2.57.1 (D) - Income Derived by Alien Individuals Employed by a Regional or
Area Headquarters and Regional Operating Headquarters of Multinational Companies
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24

As amended by Section 2, Revenue Regulations No. 12-2001.


Original text of Section 2.57.1 (D):
"Sec. 2.57.1. Income Payments Subject to Final Withholding Tax.
The following forms of income shall be subject to final withholding tax at the
rates herein specified.
xxx

xxx

xxx

(D) Income Derived by Alien Individuals Employed by Regional or


Area Headquarters and Regional Operating Headquarters of Multinational
Companies. A final withholding tax equivalent to fifteen percent (15%) shall
be withheld by the withholding agent from the gross income received by every
alien individual occupying managerial and technical positions in regional or area
headquarters and regional operating headquarters and representative offices
established in the Philippines by multinational companies as salaries, wages,
annuities, compensation, remuneration, and other emoluments, such as
honoraria and allowances, except income which is subject to the fringe benefits
tax, from such regional or area headquarters and regional operating
headquarters.
The same tax treatment shall apply to Filipinos employed and occupying
the same as those of alien employed by these multinational companies.
The term "multinational company" means a foreign firm or entity
engaged in international trade with its affiliates or subsidiaries or branch offices
in the Asia Pacific Region and other foreign markets.

As amended by Section 2, Revenue Regulations No. 6-2001:


"Sec. 2.57.1. Income Payments Subject to Final Withholding Tax.
The following forms of income shall be subject to final withholding tax at the
rates herein specified.
xxx

xxx

xxx

(D) Income Derived by Alien Individuals Employed by Regional or


Area Headquarters and Regional Operating Headquarters of Multinational
Companies and Those Employed by Offshore Banking Units and Petroleum
Service Contractors and Subcontractors. A final-withholding tax equivalent
to fifteen percent (15%) shall be withheld by the withholding agent from the
gross income received by every alien individual occupying managerial and
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technical positions in regional or area headquarters and regional operating


headquarters established in the Philippines by multinational companies as
salaries, wages, annuities, compensation, remuneration, and other emoluments,
such as honoraria and allowances, except income which is subject to the fringe
benefits tax, from such regional or area headquarters and regional operating
headquarters.
The same tax treatment is applicable to Filipinos employed and
occupying the same positions as those aliens employed by multinational
companies, regardless of whether or not there is an alien executive
occupying the same position, provided, that such Filipinos shall have the
option to be taxed at either 15% of gross income or at the regular tax rate
on their taxable income in accordance with the Tax Code of 1997. In case of
the latter, the withholding tax rates under Sections 2.78 and 2.79 of
Revenue Regulations No. 2-98 shall apply.

See also Republic Act No. 8756 entitled "An Act Providing For The
Terms, Conditions And Licensing Requirements Of Regional Or Area
Headquarters, Regional Operating Headquarters, And Regional Warehouses Of
Multinational Companies, Amending For The Purpose Certain Provisions Of
Executive Order No. 226, Otherwise Known As The Omnibus Investments
Code Of 1987" (dated November 23, 1999).
See futher clarificatory
Regulations No. 11-2010.
25

regulations

onthis

provision,

Revenue

See Revenue Regulations No. 3-98 and subsequent amendments thereto.

Section 2.57.1 (E) - Income Derived by Alien Individuals Employed by Offshore Banking
Units
26

As amended by Section 2, Revenue Regulations No. 6-2001.


Original text:
"Sec. 2.57.1. Income Payments Subject to Final Withholding Tax.
The following forms of income shall be subject to final withholding tax at the
rates herein specified.
xxx

xxx

xxx

(E) Income Derived by Alien Individuals Employed by Offshore


Banking Units. A final withholding tax equivalent to fifteen (15%) shall be
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withheld by the withholding agent from the gross income of alien individuals
occupying managerial or technical positions in offshore banking units
established in the Philippines, as salaries, wages, annuities, compensations,
remuneration and other emoluments such as honoraria and allowances, received
from such offshore banking units.
The same tax treatment shall apply to Filipinos employed and occupying
the same positions as those of aliens who are employed by these offshore
banking units.

Section 2.57.1 (F) - Income of Aliens Employed by Foreign Petroleum Service Contactors
and Subcontractors
27

As amended by Section 2, Revenue Regulations No. 6-2001.


Original text:
"Sec. 2.57.1. Income Payments Subject to Final Withholding Tax.
The following forms of income shall be subject to final withholding tax at the
rates herein specified.
xxx

xxx

xxx

(F) Income of Aliens Employed by Foreign Petroleum Service


Contractors and Subcontractors. A final withholding tax equivalent to
fifteen percent (15%) shall be withheld from the gross income of an alien
individual who is a permanent resident of a foreign country but who is employed
and assigned in the Philippines by a foreign service contractor or by a foreign
service subcontractor who is engaged in petroleum operations in the Philippines.
His gross income includes salaries, wages, annuities, compensation,
remuneration and other emoluments, such as honoraria and allowances, received
from such contractor or subcontractor.
The same tax treatment shall apply to Filipinos who are employed and
occupying the same positions as those of aliens employed by a foreign
petroleum service contractor or subcontractor.

Section 2.57.1 (G) - Income Payment to a Domestic Corporation


28

As amended by Section 2, Revenue Regulations No. 6-2001 and Section 2,


Revenue Regulations No. 17-2003.

29

See Revenue Regulations No. 10-98.

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30

As amended by Section 2, Revenue Regulations No. 17-2003.


Original text of Section 2.57.1 (G) (5):
"Sec. 2.57.1. Income Payments Subject to Final Withholding Tax.
The following forms of income shall be subject to final withholding tax at the
rates herein specified.
xxx

xxx

xxx

G) Income Payment to a Domestic Corporation. The following


items of income shall be subject to a final withholding tax in the hands of a
domestic corporation, based on the gross amount thereof and at the rate of tax
prescribed therefor:
(5) On capital gains presumed to have been realized from the sale,
exchange or other disposition of real property located in the Philippines
classified as capital assets, including pacto de retro sales and other forms of
conditional sales based on the gross selling price or fair market value as
determined in accordance with Sec. 6(E) of the Code, whichever is higher
Six percent (6%).

31

See Revenue Regulations No. 8-98 and Revenue Memorandum Order No.
92-98. See also Revenue Memorandum Order No. 66-99, Revenue
Memorandum Order No. 13-2001; and Revenue Regulations No. 4-99.

32

Added by Section 2, Revenue Regulations No. 6-2001.

Section 2.57.1 (H) - Income Payment to a Resident Foreign Corporation


33

See amendment made by Section 2, Revenue Regulations No. 6-2001.

34

See Revenue Regulations No. 10-98.

35

See Section 28(A)(5), NIRC of 1997.

36

See Revenue Regulations No. 10-98.

37

See Revenue Regulations No. 10-98.

38

Added by Section 2, Revenue Regulations No. 6-2001.

Section 2.57.1 (J) - Fringe Benefits Granted to the Employee (Except Rank and File
Employee)
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39

See Revenue Regulations No. 3-98 and subsequent amendments made by


Revenue Regulations Nos. 8-2000; 10-2000; 5-2008; and 5-2011.

Section 2.57.2 - Income Payment Subject to Creditable Withholding Tax and Rates
Prescribed Thereon
40

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See amendments made by Revenue Regulations No. 8-98 (dated August 25,
1998) Re: Revenue Regulations Amending Pertinent Portions of Revenue
Regulations Nos. 11-96 and 2-98 Relative to the Tax Treatment on the Sale,
Transfer or Exchange of Real Property and for this Purpose Revising the Time
and Place of Payment of the Capital Gains Tax Due Thereon; Revenue
Regulations No. 12-98 (dated August 14, 1998) Re: Amending Section 2.57.2
of Revenue Regulations No. 2-98; Revenue Regulations No. 3-99 (dated
January 22, 1999) Re: Further Amending Section 2 of Revenue Regulations
No. 12-98; Revenue Regulations No. 6-2001 (dated July 31, 2001) Re:
Amending Pertinent Provisions of Revenue Regulations Nos. 1-98, 2-98, as
Amended, and 7-95, as Amended, and Revenue Memorandum Circular No.
1-98 Relative to the Inclusion of Additional Taxpayers to be Subject to Final
Withholding Tax, Revision of the Withholding Tax Rates on Certain Income
Payments Subject to Creditable Withholding Tax, Time for the Filing of
Various Tax Returns and Payment of the Taxes Due Thereon And Others;
Revenue Regulations No. 12-2001 (issued September 7, 2001) Re:
Amendment to the Pertinent Provisions of Revenue Regulations No. 1-98, as
Amended, Revenue Regulations No. 2-98, as Amended, and Revenue
Regulations No. 6-2001, Relative to the Revision of Withholding Tax Rates on
Certain Income Payments Subject to Withholding Tax, the Deferment of the
New Deadline Dates For Filing Selected Tax Returns, the Reporting
Requirements for Recipients of Talent Fees, and for Other Purposes; Revenue
Regulations No. 14-2002 (dated September 9, 2002) Re: Amending Further
Pertinent Provisions of Revenue Regulations No. 2-98, as amended; Revenue
Regulations No. 19-2002 (dated October 11, 2002) Re: Amending Revenue
Regulations No. 3-2002 and Further Amending Section 2.83 of Revenue
Regulations No. 2-98 as Amended, Relative to Substituted Filing of Income
Tax Return of Employees Receiving Purely Compensation Income from Only
One Employer for One Taxable Year Whose Tax Due is Equal to Tax Withheld
and Individual-Payees Whose Compensation Income is Subject to Final
Withholding Tax; Revenue Regulations No. 17-2003 (dated March 31, 2003)
Re: Amending Further Pertinent Provisions of Revenue Regulations No. 2-98,
as Amended, Providing for Additional Transactions Subject to Creditable
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Withholding Tax; Re-Establishing the Policy that the Capital Gains Tax on the
Sale, Exchange or Other Disposition of Real Property Classified as Capital
Assets Shall be Collected as a Final Withholding Tax, Thereby Further
Amending Revenue Regulations Nos. 8-98 and 13-99, as Amended by
Revenue Regulations No. 14-2000; and for Other Purposes; Revenue
Regulations No. 30-2003 (dated November 12, 2003) Re: Amending Further
Pertinent Provisions of Revenue Regulations No. 2-98, as Last Amended by
Revenue Regulations No. 17-2003, and Revenue Regulations No. 8-98, as
Amended, Providing for the Imposition of Final Withholding Tax on the Sale,
Exchange or Other Disposition of Real Property Classified as Capital Assets by
Non-resident Aliens, Increasing the Withholding Tax Rates on Certain Income
Payments, Inclusion of Certain Income Payments, Sanctions to be Imposed on
Payees Who Refuse the Withholding of Tax on Their Income/Receipts, and for
Other Purposes; Revenue Regulations No. 1-2004 (dated January 14, 2004)
Re: Amending Further Sec. 2.57.2(S) of Revenue Regulations No. 2-98, as
Last Amended By Revenue Regulations No. 30-2003, Exempting Marginal
Income Earners From Creditable Withholding Tax on Payments Made By
Hotels, Restaurants, Resorts, Caterers, Food Processors, Canneries,
Supermarkets, Livestock, Poultry, Fish and Marine Product Dealers,
Hardwares, Factories, Furniture Shops, and All Other Establishments;
Revenue Regulations No. 3-2004 (dated March 1, 2004) Re: Suspending the
implementation of withholding tax on income payments made to suppliers of
agricultural products under Section 2.57.2(S) of Revenue Regulations 2-98, as
amended by RR 17-2003, further amended by RR 30-2003 and 1-2004;
Revenue Regulations No. 8-2005 (dated February 23, 2005) Re: Amending
further pertinent provisions of Revenue Regulations No. 2-98, as last amended
by Revenue Regulations 3-2004, as Amended, providing for the inclusion of
Income Payments subject to Creditable Withholding Tax under Section
2.57.2(U) on Manila Electric Company (MERALCO) Refund arising from
Supreme Court Case G.R. No. 14814 of April 9, 2003 to Customers under
Phase IV as approved by Energy Regulatory Commission (ERC); Revenue
Regulations No. 2-2009 (dated February 4, 2009) Re: Amending Further Secs.
2.57.2 and 2.58 of Revenue Regulations No. 2-98, as Amended, Subjecting to
Creditable Withholding Tax the Interest Portion of the Refund of Meter
Deposits by MERALCO and Other Distribution Utilities to Residential and
Non-Residential Electricity Consumers/Customers; Revenue Regulations No.
8-2009 (dated October 22, 2009) Re: Amending Further Secs. 2.57.2 and
2.57.3 of Revenue Regulations No. 2-98, as Amended, Subjecting to Creditable
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Withholding Tax the Income Payments Made by Political Parties and


Candidates of Local and National Elections of All Their Campaign
Expenditures and Income Payments Made by an Individual or Juridical Person
Forming Part of Their Campaign Contributions to Candidates of Local and
National Elections and to Political Parties; and Revenue Regulations No.
13-2011 (dated July 25, 2011) Re: Implementing the Tax Provisions of
Republic Act No. 9856 Otherwise Known as "The Real Estate Investment
Trust Act of 2009".
See prior issuances on expanded withholding tax Revenue
Regulations No. 6-85 and subsequent amendments made by Revenue
Regulations Nos. 8-85, 13-86, 1-89, 12-89, 1-90, 8-90, 2-91, 4-91, 6-94, 7-94,
8-94, 12-94, and 16-94.
Section 2.57.2 (A) - Professional Fees, Talent Fees, etc. for Services Rendered by
Individuals
41

As amended by Section 3, Revenue Regulations No. 6-2001; Section 3,


Revenue Regulations No. 12-2001; Section 3, Revenue Regulations No.
30-2003; and Section 2, Revenue Regulations No. 10-2013.
Original text:
Section 2.57.2. Income Payments Subject to Creditable Withholding Tax
and Rates Prescribed Thereon. Except as herein otherwise provided, there
shall be withheld a creditable income tax at the rates herein specified for each
class of payee from the following items of income payments to persons residing
in the Philippines:
(A) Professional fees, talent fees, etc., for services rendered by
individuals On the gross professional, promotional and talent fees or any
other form of remuneration for the services of the following individuals Ten
percent (10%);
(1)

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Those individually engaged in the practice of professions or


callings: lawyers; certified public accountants; doctors of
medicine; architects; civil, electrical, chemical, mechanical,
structural, industrial, mining, sanitary, metallurgical and geodetic
engineers; marine surveyors; doctors of veterinary science;
dentist; professional appraisers; connoisseurs of tobacco;
actuaries; and interior decorators;

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(2)

Professional entertainers such as but not limited to actors and


actresses, singers and emcees;

(3)

Professional athletes including basketball players, pelotaris and


jockeys;

(4)

All directors involved in movies, stage, radio, television and


musical productions;

(5)

Insurance agents and insurance adjusters;

(6)

Management and technical consultants;

(7)

Bookkeeping agents and agencies;

(8)

Other recipients of talent fees;

(9)

Fees of directors who are not employees of the company paying


such fees, whose duties are confined to attendance at and
participation in the meetings of the board of directors.

The amounts subject to withholding under this paragraph shall include


not only fees, but also per diems, allowances and any other form of income
payments. In the case of professional entertainers, athletes, and all recipient of
talent fees, the amount subject to withholding tax shall also include amounts
paid to them in consideration for the use of their names or pictures in print,
broadcast, or other media or for public appearances, for purposes of
advertisements or sales promotion.
xxx

xxx

xxx

As amended by Section 2, Revenue Regulations No. 10-2013:


Section 2.57.2. Income payments subject to creditable withholding tax
and rates prescribed thereon. . . .
(A) Professional fees, talent fees, etc., for services rendered by
individuals. On the gross professional, promotional and talent fees or any
other form of remuneration for the services of the following individuals
Fifteen percent (15%), if the gross income for the current year exceeds
P720,000; and Ten percent (10%), if otherwise:
(1) Those individually engaged in the practice of profession or
callings: . . . designers, real estate service practitioners (RESPs), (i.e., real
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estate consultants, real estate appraisers and real estate brokers) requiring
government licensure examination given by the Real Estate Service
pursuant to Republic Act No. 9646 and all other profession requiring
government licensure examination regulated by the Professional Regulations
Commission, Supreme Court, etc. . . .
xxx

xxx

xxx

As amended by Section 3, Revenue Regulations No. 30-2003:


Sec. 2.57.2. Income payments subject to creditable withholding tax and
rates prescribed thereon. . . .
(A) Professional fees, talent fees, etc., for services rendered by
individuals. On the gross professional, promotional and talent fees or any
other form of remuneration for the services of the following individuals
Fifteen percent (15%), if the gross income for the current year exceeds
P720,000; and Ten percent (10%), if otherwise;

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(1)

Those individually engaged in the practice of professions or


callings; lawyers; certified public accountants; doctors of
medicine; architects; civil, electrical, chemical, mechanical,
structural, industrial, mining, sanitary, metallurgical and geodetic
engineers; marine surveyors; doctors of veterinary science;
dentist; professional appraisers; connoisseurs of tobacco;
actuaries; interior decorators, designers and all other
profession requiring government licensure examinations
and/or regulated by the Professional Regulations
Commission, Supreme Court, etc.

(2)

Professional entertainers, such as, but not limited to, actors and
actresses, singers, lyricist, composers and emcees;

(3)

Professional athletes, including basketball players, pelotaris and


jockeys;

(4)

All directors and producers involved in movies, stage, radio,


television and musical productions;

(5)

Insurance agents and insurance adjusters;

(6)

Management and technical consultants;

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(7)

Bookkeeping agents and agencies;

(8)

Other recipient of talent fees;

(9)

Fees of directors who are not employees of the company paying


such fees, whose duties are confined to attendance at and
participation in the meetings of the board of directors.
xxx

xxx

xxx

Furthermore, in order to determine the applicable tax rate (10% or 15%)


to be applied/withheld by the withholding agent, every individual
professional/talent/corporate directors herein enumerated, shall periodically
disclose his gross income for the current year to the Bureau of Internal Revenue
(BIR) by submitting a notarized sworn declaration attached as Annex "A"
hereof in three (3) copies (two (2) copies for the BIR and one (1) copy for
the taxpayer), copy furnished all the current payors of the declaration duly
stamped received by the BIR (Collection Division of the Regional Office
having jurisdiction over the place where the income earner is
registered/Large Taxpayers Collection Division for large taxpayers in
Metro Manila/LTDO for large taxpayers outside Metro-Manila). Sworn
declaration may likewise be filed by the income payor on behalf of the
professionals/talents/directors whose services were being rendered
exclusively to the aforesaid payor. The disclosure should be filed on June 30
of each year or within fifteen (15) days after the end of the month the
professional/talent/director's income reaches P720,000, whichever comes
earlier. In case his total gross income is less than P720,000 as of June 30, he/she
shall submit a second disclosure within fifteen (15) days after the end of the
month that his/her gross income for the current year to date reaches P720,000.
The payee professional/talent/director shall furnish each payor a copy of
the BIR duly stamped received sworn declaration not later than five (5)
days from the date of receipt by the BIR. In case of failure to submit the June
30 annual declaration/disclosure to the BIR, and to furnish the payor/s a copy
thereof, the payor shall withhold the tax at the rate of 15%.
The Collection Division/Large Taxpayers Collection Division/LTDO
shall transmit one (1) copy of the duly submitted notarized sworn
declaration, to the Withholding Tax Division within five (5) days from
receipt thereof. The remaining copy shall be the file copy of the concerned
Regional Office/Large Taxpayer Service/LTDO for monitoring purposes.
These requirements shall likewise apply to taxable juridical persons
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(sworn declaration shall be executed by the president/managing partner of


the corporation/company), partners of general professional partnerships
and medical practitioners stated under sub-sections (B), (H) and (I) hereof.
Notwithstanding the foregoing, if an individual recipient receives
professional fees/talent fees/directors fees in addition to salaries from the same
payor, the said fees shall be considered as supplemental compensation and, thus
be subject to the withholding tax on compensation.
xxx

xxx

xxx

As amended by Section 3, Revenue Regulations No. 12-2001:


Section 2.57.2. Income payment subject to creditable withholding tax
and rates prescribed thereon. Except as herein otherwise provided, there
shall be withheld a creditable income tax at the rates herein specified for each
class of payee from the following items of income payments to persons residing
in the Philippines.
(A) Professional fees, talent fees, etc. for services rendered by
individuals. On the gross professional, promotional and talent fees or any
other form of remuneration for the services of the following individuals
xxx

xxx

(2)

Professional entertainers, such as, but not limited to, actors and
actresses, singers and emcees Twenty percent (20%), if the
professional entertainer's gross income for the current year
exceeds P720,000; and Ten percent (10%), if otherwise;

(3)

Professional athletes, including basketball players, pelotaris and


jockeys Twenty percent (20%), if the professional athlete's
gross income for the current year exceeds P720,000; and Ten
percent (10%), if otherwise;

(4)

All directors involved in movies, stage, radio, television and


musical productions Twenty percent (20%), if the director's
gross income for the current year exceeds P720,000; and Ten
Percent (10%); if otherwise;
xxx

(8)
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xxx

xxx

xxx

Other recipients of talent fees Twenty percent (20%), if the


recipient's gross income for the current year exceeds

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49

P720,000; and Ten percent (10%), if otherwise.


xxx

xxx

xxx

The amounts subject to withholding tax under this paragraph shall


include not only fees, but also per diems, allowances and any other form of
income payments not subject to withholding tax on compensation.
In the case of professional entertainers, professional athletes,
directors involved in movies, stage, radio, television and musical
productions and other recipients of talent fees, the amounts subject to
withholding tax shall also include amounts paid to them in consideration
for the use of their names or pictures in print, broadcast, or other media or
for public appearances, for purposes of advertisements or sales proportion.
Furthermore, in order to determine the applicable tax rate (10% or
20%) to be applied/withheld by the withholding agent, every professional
entertainer, professional athlete, director involved in movies, stage radio,
television and musical productions and other recipients of talent fees shall
annually disclose his gross incomes for the current year to the Bureau of
Internal Revenue (BIR), by submitting a notarized sworn declaration
thereof, copy furnished all the current payors of the declaration duly
stamped received by the BIR (Withholding Tax Division of the National
Office). The disclosure should be filed on June 30 of each year or within
fifteen (15) days after the end of the month the talent's income reaches
P720,000, whichever comes earlier. In case his total gross income is less
than P72,000 as June 30, he/she shall submit a second disclosure within
fifteen (15) days after the end of the month that his/her gross income for
the current year to date reaches P720,000. The initial disclosure after the
effectivity or these Regulations shall be filed on or before September 30,
2001 or within fifteen (15) days after the effectivity of these Regulations,
whichever comes later. In case of failure to submit the annual
declaration/disclosure to the BIR, the payor shall withhold the tax at the
rate of 20%.
Notwithstanding the foregoing, if an individual recipient receives
talent fees in addition to salaries from the same payor, the said talent fees
shall be considered as supplemental compensation and, thus, be subject to
the withholding tax on compensation.
xxx

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CD Technologies Asia, Inc. and Accesslaw, Inc.

xxx

xxx

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50

As amended by Section 3, Revenue Regulations No. 6-2001:


SEC. 2.57.2. Income payment subject to creditable withholding tax and
rates prescribed thereon. Except as herein otherwise provided, there shall be
withheld a creditable income tax at the rates herein specified for each class of
payee from the following items of income payments to persons residing in the
Philippines:
(A) Professional fees, talent fees, etc. for services rendered by
individuals On the gross professional, promotional and talent fees or any
other form of remuneration for the services of the following individuals
(1)

Those individually engaged in the practice of professions or


callings; lawyers; certified public accountants; doctors of
medicine; architects; civil, electrical, chemical, mechanical,
structural, industrial, mining, sanitary, metallurgical and geodetic
engineers; marine surveyors; doctors of veterinary science;
dentists; professional appraisers; connoisseurs of tobacco;
actuaries; and interior decorators Ten percent (10%)

(2)

Professional entertainers, such as, but not limited to, actors and
actresses, singers and emcees Twenty percent (20%)

(3)

Professional athletes, including basketball players, pelotaris and


jockeys Twenty percent (20%)

(4)

All directors involved in movies, stage, radio, television and


musical productions Twenty percent (20%)

(5)

Insurance agents and insurance adjusters Ten percent (10%)

(6)

Management and technical consultants Ten percent (10%)

(7)

Bookkeeping agents and agencies Ten percent (10%)

(8)

Other recipients of talent fees Twenty percent (20%)

(9)

Fees of directors, who are not employees of the company paying


such fees, whose duties are confined to attendance at and
participation in the meetings of the board of directors Twenty
percent (20%)

The amounts subject to withholding under this paragraph shall include


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Philippine Taxation Encyclopedia 2014

51

not only fees, but also per diems, allowances and any other form of income
payments. In the case of professional entertainers, athletes, and all recipients of
talent fees, the amounts subject to withholding tax shall also include amounts
paid to them in consideration for the use of their names or pictures in print,
broadcast, or other media or for public appearances, for purposes of
advertisements or sales promotion;
xxx

xxx

xxx

Section 2.57.2 (B) - Professional Fees, Talent Fees, etc. for Services of Taxable Juridical
Persons
42

As amended by Section 3, Revenue Regulations No. 30-2003.


Original text:
Section 2.57.2. Income Payments Subject to Creditable Withholding Tax
and Rates Prescribed Thereon. Except as herein otherwise provided, there
shall be withheld a creditable income tax at the rates herein specified for each
class of payee from the following items of income payments to persons residing
in the Philippines:
xxx

xxx

xxx

(B) Professional fees, talent fees, etc. for services of taxable juridical
persons On the gross professional, promotional and talents fees, or any other
form of remuneration enumerated in the preceding subparagraph for the services
of taxable juridical persons Five percent (5%).
xxx

xxx

xxx

As amended by Section 3, Revenue Regulations No. 6-2001.


Section 2.57.2. Income Payments Subject to Creditable Withholding Tax
and Rates Prescribed Thereon. Except as herein otherwise provided, there
shall be withheld a creditable income tax at the rates herein specified for each
class of payee from the following items of income payments to persons residing
in the Philippines:
xxx

xxx

xxx

(B) Professional fees, talent fees, etc. for services of taxable juridical
persons On the gross professional, promotional and talents fees, or any other
form of remuneration enumerated in the preceding subparagraph for the services
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52

of taxable juridical persons Ten percent (10%)

Section 2.57.2 (C) - Rentals


43

As amended by Section 3, Revenue Regulations No. 17-2003.


Original text:
Section 2.57.2. Income Payments Subject to Creditable Withholding Tax
and Rates Prescribed Thereon. Except as herein otherwise provided, there
shall be withheld a creditable income tax at the rates herein specified for each
class of payee from the following items of income payments to persons residing
in the Philippines:
xxx

xxx

xxx

(C) Rentals On gross rental for the continued use or possession of


real property used in business which the payor or obligor has not taken or is not
taking title, or in which he has no equity Five percent (5%).
xxx

xxx

xxx

As amended by Section 2, Revenue Regulations No. 14-2002.


Section 2.57.2. Income Payments Subject to Creditable Withholding Tax
and Rates Prescribed Thereon. Except as herein otherwise provided, there
shall be withheld a creditable income tax at the rates herein specified for each
class of payee from the following items of income payments to persons residing
in the Philippines:
xxx

xxx

xxx

(C) Rentals
(1) Real properties. On gross rental for the
continued use or possession of real property used in business
which the payor or obligor has not taken or is not taking title,
or in which he has no equity Five percent (5%);
(2) Personal properties. On gross rental or lease
in excess of Ten Thousand Pesos (P10,000.00) per payment
for the continued use or possession of personal property
used in business which the payor or obligor has not taken
or is not taking title, or in which he has no equity which
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53

include, but not limited to the following: land transport


equipment, water transport equipment, air transport
equipment, industrial equipment, commercial equipment,
scientific equipment, agricultural machinery and
equipment, construction/civil engineering machinery and
equipment,
telecommunication
equipment,
office
furniture/machines/equipment, main frame computer and
all other computer machines/equipment, materials
handling equipment and auxiliary equipment Five
percent (5%);
However, the Ten Thousand Pesos (P10,000.00)
threshold shall not apply when the accumulated gross
rental or lease paid by the lessee to the same lessor exceeds
or is reasonably expected to exceed P10,000.00 within the
year. In which case, the lessee shall withhold the five
percent (5%) withholding tax on the entire amount.
(3) Poles, satellites and transmission facilities.
On gross rentals or lease for the use of poles, satellites
and/or transponder and transmission facilities which
include but not limited to the following: switchboards, land
lines/aerial cables, underground cables and submarine
cables Five percent (5%);
(4) Billboards. On gross rentals or lease of
spaces used in posting advertisements in the form of
billboards and/or structures similar thereto, posted in
public places such as, but not limited to, buildings, vehicles,
amusement places, malls, street posts, etc. Five percent
(5%)
xxx

xxx

xxx

See earlier provisions on rentals under Section 1(c), Revenue


Regulations No. 6-85, and subsequent amendment made by Revenue
Regulations No. 8-90.
Section 2.57.2 (E) - Income Payments to Certain Contractors
44

Copyright 2015

As amended by Section 3, Revenue Regulations No. 6-2001, Section 2,


Revenue Regulations No. 14-2002 and Section 3, Revenue Regulations No.
17-2003.
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Philippine Taxation Encyclopedia 2014

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Original text:
Section 2.57.2. Income Payments Subject to Creditable Withholding Tax
and Rates Prescribed Thereon. Except as herein otherwise provided, there
shall be withheld a creditable income tax at the rates herein specified for each
class of payee from the following items of income payments to persons residing
in the Philippines:
xxx

xxx

xxx

(E) Income payments to certain contractors On gross payments to


the following contractors, whether individual or corporate One percent (1%).
(1) General engineering contractors Those whose principal
contracting business in connection with fixed works requiring specialized
engineering knowledge and skill including the following divisions or subjects:

(2)
Copyright 2015

(a)

Reclamation works;

(b)

Railroads;

(c)

Highways, streets and roads;

(d)

Tunnels;

(e)

Airports and airways;

(f)

Waste reduction plants;

(g)

Bridges, overpasses, underpasses and other similar works;

(h)

Pipelines and other systems for the transmission of


petroleum and other liquid or gaseous substances;

(i)

Land leveling;

(j)

Excavating;

(k)

Trenching;

(l)

Paving; and

(m)

Surfacing work.

General

Building

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contractors

Those

Philippine Taxation Encyclopedia 2014

whose

principal
55

contracting business is in connection with any structure built, for the support,
shelter and enclosure of persons, animals, chattels, or movable property of any
kind, requiring in its construction the use of more than two unrelated building
trades or crafts, or to do or superintend the whole or any part thereto. Such
structure includes sewers and sewerage disposal plants and systems, parks,
playgrounds, and other recreational works, refineries, chemical plants and
similar industrial plants requiring specialized engineering knowledge and skills,
powerhouse, power plants and other utility plants and installation, mines and
metallurgical plants, cement and concrete works in connection with the
above-mentioned fixed works.
(3) Specialty Contractors Those whose operations pertain to the
performance of construction work requiring special skill and whose principal
contracting business involves the use of specialized building trades or crafts.
cdasia

(4)

Copyright 2015

Other contractors
(a)

Filling, demolition and salvage work contractors and


operators of mine drilling apparatus;

(b)

Operators of dockyards;

(c)

Persons engaged in the installation of water system, and


gas or electric light, heat or power;

(d)

Operators of stevedoring, warehousing or forwarding


establishments;

(e)

Transportation contractors which include common


carriers for the carriage of goods and merchandise of
whatever kind by land, air or water, where the gross
payments by the payor to the same payee amounts to at
least two thousand pesos (P2,000) per month, regardless
of the number of shipments during the month;

(f)

Printers, bookbinders, lithographers and publishers except


those principally engaged in the publication or printing of
any newspaper, magazine, review or bulletin which
appears at regular intervals, with fixed prices for
subscription and sale;

(g)

Messengerial, janitorial, private detective and/or security


agencies, credit and/or collection agencies and other

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Philippine Taxation Encyclopedia 2014

56

business agencies;
(h)

Advertising agencies, exclusive of gross payments to


media;

(i)

Independent producers of television, radio and stage


performances or shows;

(j)

Independent producers of "jingles";

(k)

Labor recruiting agencies;

(l)

Persons engaged in the installation of elevators, central


air conditioning units, computer machines and other
equipment and machineries and the maintenance services
thereon;

(m)

Persons engaged in the sale of computer services;

(n)

Persons engaged in landscaping services;

(o)

Persons engaged in the collection and disposal of


garbage;

(p)

TV and radio station operators on sale of TV and radio


airtime; and

(q)

TV and radio blocktimers on sale of TV and radio


commercial spots.
xxx

xxx

xxx

As amended by Section 3, Revenue Regulations No. 17-2003:


Section 2.57.2. Income Payments Subject to Creditable Withholding Tax
and Rates Prescribed Thereon. Except as herein otherwise provided, there
shall be withheld a creditable income tax at the rates herein specified for each
class of payee from the following items of income payments to persons residing
in the Philippines:
xxx

xxx

xxx

(E) Income payments to certain contractors On gross payments to


the following contractors, whether individual or corporate Two percent
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Philippine Taxation Encyclopedia 2014

57

(2%)
xxx
(3)

Other contractors
xxx

xxx

xxx

(1)
xxx

xxx

(k) Labor recruiting agencies and/or "labor-only" contractors. For


this purpose, any person who undertakes to supply workers to an
employer shall be deemed to be engaged in "labor-only" contracting
where such person does not have substantial capital or investment in the
form of tools, equipment, machineries, work premises and other
materials and the workers recruited and placed by such person are
performing activities which are directly related to the principal business
or operations of the employer which the workers are habitually
employed;
STcHDC

xxx

xxx

xxx

As amended by Revenue Regulations No. 14-2002:


Section 2.57.2. Income Payments Subject to Creditable Withholding Tax
and Rates Prescribed Thereon. Except as herein otherwise provided, there
shall be withheld a creditable income tax at the rates herein specified for each
class of payee from the following items of income payments to persons residing
in the Philippines:
xxx

xxx

xxx

(E) Income payments to certain contractors. On gross payments to


the following contractors, whether individual or corporate Two percent (2%)
xxx
(4)

xxx

xxx

Other contractors
xxx

xxx

xxx

(m) Persons engaged in the sale of computer services,


computer
programmers,
software/program
developer/designer, internet service providers, web page
designing, computer data processing, conversion or base
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58

services and other computer related activities;


xxx

xxx

xxx

As amended by Section 3, Revenue Regulations No. 6-2001:


Section 2.57.2. Income Payments Subject to Creditable Withholding Tax
and Rates Prescribed Thereon. Except as herein otherwise provided, there
shall be withheld a creditable income tax at the rates herein specified for each
class of payee from the following items of income payments to persons residing
in the Philippines:
xxx

xxx

xxx

(E) Income payments to certain contractors On gross payments to


the following contractors, whether individual or corporate Two percent
(2%)
(1) General engineering contractors Those whose principal
contracting business in connection with fixed works requiring specialized
engineering knowledge and skill, including the following divisions or subjects:

Copyright 2015

(a)

Reclamation works;

(b)

Railroads;

(c)

Highways, streets and roads;

(d)

Tunnels;

(e)

Airports and airways;

(f)

Waste reduction plants;

(g)

Bridges, overpasses, underpasses and other similar works;

(h)

Pipelines and other systems for the transmission of petroleum


and other liquid or gaseous substances;

(i)

Land leveling;

(j)

Excavating;

(k)

Trenching;

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Philippine Taxation Encyclopedia 2014

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(l)

Paving; and

(m)

Surfacing work.

(2) General building contractors Those whose principal contracting


business is in connection with any structure built, for the support, shelter and
enclosure of persons, animals, chattels, or movable property of any kind,
requiring in its construction the use of more than two unrelated building trades
or crafts, or to do or superintend the whole or any part thereto. Such structure
includes sewers and sewerage disposal plants and systems, parks, playgrounds,
and other recreational works, refineries, chemical plants and similar industrial
plants requiring specialized engineering knowledge and skills, powerhouse,
power plants and other utility plants and installation, mines and metallurgical
plants, cement and concrete works in connection with the above-mentioned
fixed works.
(3) Specialty Contractors Those whose operations pertain to the
performance of construction work requiring special skill and whose principal
contracting business involves the use of specialized building trades or crafts.
(4)

Copyright 2015

Other contractors

(a)

Filling, demolition and salvage work contractors and operators


of mine drilling apparatus;

(b)

Operators of dockyards;

(c)

Persons engaged in the installation of water system, and gas or


electric light, heat or power;

(d)

Operators of stevedoring,
establishments;

(e)

Transportation contractors which include common carriers for


the carriage of goods and merchandise of whatever kind by
land, air or water, where the gross payments by the payor to the
same payee amounts to at least two thousand pesos (P2,000)
per month, regardless of the number of shipments during the
month;

(f)

Printers, bookbinders, lithographers and publishers except


those principally engaged in the publication or printing of any
newspaper, magazine, review or bulletin which appears at

CD Technologies Asia, Inc. and Accesslaw, Inc.

warehousing

Philippine Taxation Encyclopedia 2014

or

forwarding

60

regular intervals, with fixed prices for subscription and sale;


(g)

Messengerial, janitorial, private detective and/or security


agencies, credit and/or collection agencies and other business
agencies;

(h)

Advertising agencies, exclusive of gross payments to media;

(i)

Independent producers
performances or shows;

(j)

Independent producers of "jingles";

(k)

Labor recruiting agencies;

(l)

Persons engaged in the installation of elevators, central air


conditioning units, computer machines and other equipment
and machineries and the maintenance services thereon;

(m)

Persons engaged in the sale of computer services;

(n)

Persons engaged in landscaping services;

(o)

Persons engaged in the collection and disposal of garbage;

(p)

TV and radio station operators on sale of TV and radio airtime;


and

(q)

TV and radio blocktimers on sale of TV and radio commercial


spots.

of

television,

radio

and

stage

45

See earlier provisions under Section 1(e)2(e), Revenue Regulations No. 6-85,
and subsequent amendments made by Revenue Regulations Nos. 8-85 and
13-86.

46

See amendment made by Section 3, Revenue Regulations No. 17-2003.

47

See amendment made by Section 2, Revenue Regulations No. 14-2002.

Section 2.57.2 (F) - Income Distribution to the Beneficiaries


48

Estates and trusts (Imposition of tax).

Section 2.57.2 (G) - Income Payments to Certain Brokers and Agents

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49

As amended by Section 3, Revenue Regulations No. 10-2013


Original text:
Section 2.57.2. Income Payments Subject to Creditable Withholding Tax
and Rates Prescribed Thereon. Except as herein otherwise provided, there
shall be withheld a creditable income tax at the rates herein specified for each
class of payee from the following items of income payments to persons residing
in the Philippines:
xxx

xxx

xxx

(G) Income payments to certain brokers and agents. On gross


commissions of customs, insurance, real estate and commercial brokers and fees
of agents of professional entertainers Five percent (5%);
xxx

xxx

xxx

As amended by Section 3, Revenue Regulations No. 17-2003:


Section 2.57.2. Income Payments Subject to Creditable Withholding Tax
and Rates Prescribed Thereon. Except as herein otherwise provided, there
shall be withheld a creditable income tax at the rates herein specified for each
class of payee from the following items of income payments to persons residing
in the Philippines:
xxx

xxx

xxx

(G) Income payments to certain brokers and agents. On gross


commissions or service fees of customs, insurance, stock, real estate,
immigration and commercial brokers and fees of agents of professional
entertainers. Ten percent (10%);
xxx

xxx

xxx

As amended by Section 2, Revenue Regulations No. 14-2002:


Section 2.57.2. Income Payments Subject to Creditable Withholding Tax
and Rates Prescribed Thereon. Except as herein otherwise provided, there
shall be withheld a creditable income tax at the rates herein specified for each
class of payee from the following items of income payments to persons residing
in the Philippines:

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Philippine Taxation Encyclopedia 2014

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xxx

xxx

xxx

(G) Income payments to certain brokers and agents. On gross


commissions of customs, insurance, stock, real estate, immigration and
commercial brokers, and fees of agents of professional entertainers. Ten
percent (10%)
xxx

xxx

xxx

As amended by Section 3, Revenue Regulations No. 6-2001:


Section 2.57.2. Income Payments Subject to Creditable Withholding Tax
and Rates Prescribed Thereon. Except as herein otherwise provided, there
shall be withheld a creditable income tax at the rates herein specified for each
class of payee from the following items of income payments to persons residing
in the Philippines:
xxx

xxx

xxx

(G) Income payments to certain brokers and agents On gross


commissions of customs, insurance, real estate and commercial brokers and fees
of agents of professional entertainers Ten percent (10%)
xxx

xxx

xxx

Section 2.57.2 (H) - Income Payments to Partners of General Professional Partnerships


50

As amended by Section 3, Revenue Regulations No. 30-2003.


Original text:
Section 2.57.2. Income Payments Subject to Creditable Withholding Tax
and Rates Prescribed Thereon. Except as herein otherwise provided, there
shall be withheld a creditable income tax at the rates herein specified for each
class of payee from the following items of income payments to persons residing
in the Philippines:
xxx

xxx

xxx

(H) Income payments to partners of general professional partnerships.


Income payments made periodically or at the end of the taxable year by a
general professional partnership to the partners, such as drawings, advances,
sharings, allowances, stipends, etc. Ten percent (10%);

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xxx

xxx

xxx

See earlier provisions under Section 1(h), Revenue Regulations No.


6-85, and subsequent amendment made by Revenue Regulations No. 1-89.
Section 2.57.2 (I) - Professional Fees Paid to Medical Practitioners
51

As last amended by Section 2, Revenue Regulations No. 14-2013.


Original text:
Section 2.57.2. Income Payments Subject to Creditable Withholding Tax
and Rates Prescribed Thereon. Except as herein otherwise provided, there
shall be withheld a creditable income tax at the rates herein specified for each
class of payee from the following items of income payments to persons residing
in the Philippines:
xxx

xxx

xxx

(I) Professional fees paid to medical practitioners. Any amount


collected for and paid to medical practitioners by hospitals and clinics or paid by
patients to the medical practitioners through the hospital or clinic Ten
percent (10%);
xxx

xxx

xxx

As amended by Section 3, Revenue Regulations No. 30-2003:


Section 2.57.2. Income Payments Subject to Creditable Withholding Tax
and Rates Prescribed Thereon. Except as herein otherwise provided, there
shall be withheld a creditable income tax at the rates herein specified for each
class of payee from the following items of income payments to persons residing
in the Philippines:
xxx

xxx

xxx

(I) Professional fees paid to medical practitioners. Any amount


collected for and paid to medical practitioners (includes doctors of medicine,
doctors of veterinary science and dentists) by hospitals and clinics, or paid
directly to the medical practitioners by patients who were admitted and
confined' to such Hospitals or Clinics, or paid directly to such medical
practitioners by health maintenance organizations (HMOs) and/or similar
establishments which is likewise covered by Section 2.57.2(A)(1) Fifteen
percent (15%), if the income payments to the medical practitioner for the
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Philippine Taxation Encyclopedia 2014

64

current year exceeds P720,000; and Ten percent (10%), if otherwise.


a) It shall be the duty and responsibility of the hospital, clinic or
HMO to remit taxes withheld from the following:
1. Professional fees paid by HMOs to medical
practitioners.
2. Professional fees paid by patients to medical
practitioners thru the hospitals or clinics.
3. Professional fees paid by patients directly to
medical practitioners where the 10% or 15% expanded
withholding tax, whichever is applicable, shall in turn be given
by medical practitioners directly to the Accounting Office of
the hospitals or clinics

c)

xxx

xxx

xxx

xxx

xxx

xxx

...

(ii) Medical practitioners whose professional fee was paid to them


directly by the patients and the 10% or 15% withholding tax, whichever is
applicable, was given by such practitioners to the Accounting Office of the
hospital or clinic
(iii) Medical practitioners whose professional fee was paid to them
directly by the patients but the 10% or 15% withholding tax, whichever is
applicable, was not given by such practitioners to the Accounting Office of the
hospital or clinic.
xxx

xxx

xxx

(e) Hospitals and clinics shall be responsible for the accurate


computation of taxes to be withheld on professional fees paid by patients thru
the hospitals and clinics, in the same way that HMOs shall be responsible for
the computation of taxes to be withheld from the professional fees paid by
them to the medical practitioners, and timely remittance of the 10% or 15%
expanded withholding tax, whichever is applicable.
The list of all income recipients-payees in this Subsection shall be
included in the Alphalist of Payees Subject to Expanded Withholding Tax
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Philippine Taxation Encyclopedia 2014

65

attached to BIR Form No. 1604-E (Annual Information Return of


Creditable Income Taxes Withheld (Expanded)/Income Payments Exempt
from Withholding Tax).
Likewise, the hospitals, clinics or HMOs shall issue a Certificate of
Creditable Tax Withheld at Source (BIR Form No. 2307) to medical
practitioners who are subjected to withholding, every 20th day following the
close of the taxable quarter or upon request of the payee.
xxx

xxx

xxx

As amended by Section 3, Revenue Regulations No. 17-2003:


Section 2.57.2. Income Payments Subject to Creditable Withholding Tax
and Rates Prescribed Thereon. Except as herein otherwise provided, there
shall be withheld a creditable income tax at the rates herein specified for each
class of payee from the following items of income payments to persons residing
in the Philippines:
xxx

xxx

xxx

(I) Professional fees paid to medical practitioners. Any amount


collected for and paid to medical practitioners (includes doctors of medicine,
doctors of veterinary science and dentists) by hospitals and clinics, or paid
directly to the medical practitioners by patients who were 'admitted and
confined' to such Hospitals or Clinics, or paid directly to such medical
practitioners by health maintenance organizations (HMOs) and/or similar
establishments which is likewise covered by Section 2.57.2 (A)(1). Ten
percent (10%);
xxx

xxx

xxx

d) For this purpose, the term 'medical practitioners' shall likewise


include medical technologists, allied health workers (e.g., occupational
therapists, physical therapists, speech therapists, nurses, etc.) and other
medical practitioners who are not under an employer-employee relationship
with the hospital, clinic or HMO and other similar establishments.
xxx

xxx

xxx

As amended by Section 2, Revenue Regulations No. 14-2002:


Section 2.57.2. Income Payments Subject to Creditable Withholding Tax
and Rates Prescribed Thereon. Except as herein otherwise provided, there
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shall be withheld a creditable income tax at the rates herein specified for each
class of payee from the following items of income payments to persons residing
in the Philippines:
xxx

xxx

xxx

(I) Professional fees paid to medical practitioners. Any amount


collected for and paid to medical practitioners (includes doctors of medicine,
doctors of veterinary science and dentists) by hospitals and clinics or paid
directly to the medical practitioners by patients who were 'admitted and
confined' to such Hospitals or Clinics. Ten percent (10%)
a) It shall be the duty and responsibility of the
Hospital or Clinic to remit taxes withheld from the following:
IaCHTS

xxx

xxx

xxx

b) Exception The withholding tax herein


prescribed shall not apply whenever there is proof that no
professional fee has in fact been charged by the medical
practitioner and paid by his patient. Provided, however, that
this fact is shown in a sworn declaration jointly executed by
the medical practitioner, and the patient or his duly
authorized representative, in case the patient is a minor or
otherwise incapacitated. This sworn declaration, to be
executed in the form presented in Annex "A" of these
Regulations, shall form part of the records of the hospital or
clinic and shall constitute as part of its records and shall be
made readily available to any duly authorized Revenue
Officer for tax audit purpose. Provided, further, that the said
administrator of the hospital or clinic shall inform the
Revenue District Office having jurisdiction over such
hospital or clinic about any medical practitioner who fails or
refuses to execute the sworn statement herein prescribed,
within ten (10) days from the occurrence of such event.
c) Hospitals and Clinics shall submit the names and
addresses of medical practitioners in the following
classifications, every 15th day after the end of each calendar
quarter, to the Collection Division of the Revenue Region for
non-large taxpayers and at the Large Taxpayers Document
Processing and Quality Assurance Division (LTDP&QAD)
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in the National Office or Large Taxpayers District Office


(LTDO) in the Region for large taxpayers, where such
hospital or clinic is registered, using the prescribed format.
xxx

xxx

xxx

d) For this purpose, the term 'medical


practitioners' includes, medical technologists, allied health
workers (e.g., occupational therapists, physical therapists,
speech therapists, nurses etc.) and other medical practitioners
who are not under an employer-employee relationship with
the hospital or clinic.
e) Hospitals and clinics shall be responsible for the
accurate computation of professional fees paid directly to
hospitals and clinics and timely remittance of 10% expanded
withholding tax. The list of all income recipients-payees in
this Subsection shall be included in the Alphalist of Payees
Subject to Expanded Withholding Tax attached to BIR Form
No. 1604-E (Annual Information Return of Creditable
Income Taxes Withheld (Expanded)/Income Payments
Exempt from Withholding Tax).
xxx

xxx

xxx

As amended by Section 3, Revenue Regulations No. 6-2001:


Section 2.57.2. Income Payments Subject to Creditable Withholding Tax
and Rates Prescribed Thereon. Except as herein otherwise provided, there
shall be withheld a creditable income tax at the rates herein specified for each
class of payee from the following items of income payments to persons residing
in the Philippines:
xxx

xxx

xxx

(I) Professional fees paid to medical practitioners Any amount


collected for and paid to medical practitioners (includes doctors of medicine,
doctors of veterinary science and dentists) by hospitals and clinics or paid
directly to the medical practitioners by patients who were admitted and
confined to such hospitals or clinics Ten percent (10%)
a)

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It shall be the duty and responsibility of the hospital or clinic to remit


taxes withheld from the following:

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1.

Professional fees paid directly to hospitals or clinics by


patients.

2.

Professional fees paid by patients directly to medical


practitioners where the 10% expanded withholding tax shall in
turn be given by medical practitioners directly to the
Accounting Office of the hospitals or clinics.

b)

Exception The withholding tax herein prescribed shall not apply


whenever no professional fee has been charged by the medical
practitioner and paid by his patient.

c)

Hospitals and clinics shall submit the names and addresses of medical
practitioners in the following classifications, every 15th day after the
end of each calendar quarter, to the Collection Division of the Revenue
Region where such hospital or clinic is located, using "Annex A" [i.e.,
as indicated in Revenue Regulations No. 3-99]:
(i)

Medical practitioners whose professional fee was paid by


patients directly to the hospital or clinic.

(ii)

Medical practitioners whose professional fee was paid to them


directly by the patients and the 10% withholding tax was given
by such practitioners to the Accounting Office of the hospital
or clinic.
ITScAE

(iii)

Medical practitioners whose professional fee was paid to them


directly by the patients but the 10% withholding tax was not
given by such practitioners to the Accounting Office of the
hospital or clinic.

(iv)

Medical practitioners who did not charge any professional fee


from their patients.

d)

The rules herein prescribed shall likewise apply to rendering of


medical services by medical practitioners through a duly registered
professional partnership for the practice of the medical profession.

e)

Hospitals or clinics shall be responsible for the accurate computation


of professional fees paid directly to hospitals and clinics and timely
remittances of the 10% expanded withholding taxes.
Likewise, the hospitals or clinics shall issue a Certificate of Creditable

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Tax Withheld at Source (BIR Form No. 2307) to medical practitioners who
were subjected to withholding, every 20th day following the close of the taxable
quarter. The names of medical practitioners shall be included in the
Alphabetical List of Income Recipients attached to the Annual Information
Return (BIR Form No. 1604).

As amended by Section 2, Revenue Regulations No. 3-99:


"SEC. 2. Amendment. Income payments subject to creditable
withholding tax and rates prescribed thereon. Except as otherwise
provided, there shall be withheld a creditable income tax at the rates herein
specified for each class of payee from the following items of income payments
to persons residing in the Philippines:
"xxx
"I.

xxx

xxx

Professional fees paid to medical practitioners. Any amount


collected for and paid to medical practitioners by hospitals and clinics
or paid directly to the medical practitioners by patients who were
admitted and confined to such Hospitals or Clinics.
"a)

"b)

It shall be the duty and responsibility of the hospital or


clinic to remit taxes withheld from the following:
"1.

Professional fees paid directly to Hospitals or


Clinics by patients.

"2.

Professional fees paid by patients directly to


medical practitioners where the 10%
expanded withholding tax shall in turn be
given by medical practitioners directly to the
Accounting Office of the Hospitals or Clinics.

Exception The withholding tax herein prescribed


shall not apply whenever no professional fee has been
charged by the medical practitioner and paid by his
patient.
cdll

"c)

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Hospitals and Clinics shall submit the names and


addresses of medical practitioners in the following
classifications, every 15th day after the end of each
calendar quarter, to the Collection Division of the
Revenue Region where such Hospital or Clinic is

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located, using "Annex A":

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"i.

Medical Practitioners whose professional fee


was paid by patients directly to the hospital
or clinic.

"ii.

Medical Practitioners whose professional fee


was paid to them directly by the patients and
the 10% withholding tax was given by such
practitioner to the Accounting Office of the
Hospital or Clinic.

"iii.

Medical Practitioners whose professional fee


was paid to them directly by the patients but
the 10% withholding tax was not given by
such practitioners to the Accounting Office of
the Hospital or Clinic.

"iv.

Medical Practitioners who did not charge


any professional fee from their patients.

"d)

The rules herein prescribed shall likewise apply to


rendering of medical services by medical practitioners
through a duly registered professional partnership for
the practice of the medical profession, provided,
however, that the rate of the withholding tax to be
imposed shall be at five percent (5%) pursuant to the
provisions of this Section."

"e)

Hospitals or clinics shall be responsible for the


accurate computation of professional fees paid
directly to hospitals and clinic and timely remittance
of the 10% expanded withholding taxes. The
deadline of the remittance of the withholding tax
collected whether paid directly to hospitals or clinic
or directly to medical practitioners is on or before
the 10th day of the following month from January to
November and January 25th for the month of
December, to the accredited agent Bank (AAB) of
the Bureau of Internal Revenue. Failure to remit the
same at the prescribed dates shall be subjected to
penalties prescribed by the NIRC.

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Likewise, the hospitals or clinics shall issue a Certificate of


Creditable Tax Withheld at Source (BIR Form No. 2307), to medical
practitioners who were subjected to withholding, every 20th day
following the close of the taxable quarter. The names of medical
practitioners shall be included in the Alphabetical List of Income
Recipients attached to the Annual Information Return (BIR Form No.
1604).

As amended by Section 2, Revenue Regulations No. 12-98:


"Sec. 2.57.2. Income payments subject to creditable withholding tax and
rates prescribed thereon. Except as herein otherwise provided, there shall be
withheld a creditable income tax at the rates herein specified for each class of
payee from the following items of income payments to persons residing in the
Philippines:
"xxx

xxx

xxx

"(I) Professional fees paid to medical practitioners Any amount


collected for and paid to medical practitioners by hospitals and clinics or paid by
patients to the medical practitioners through the hospital or clinic Ten
Percent (10%).
"(a) It shall be the duty and responsibility of the hospital or clinic
to collect from any patient admitted by such hospital or clinic, the
professional fee of the attending medical practitioner and to withhold the
tax herein prescribed. It is the intent of these Regulations that the hospital
or clinic shall, at all times, collect the professional fee for and in behalf of
the medical practitioner and to withhold therefrom the tax herein
prescribed.
"(i) In general. It shall be presumed that the
hospital or clinic has collected the professional fee of the
said medical practitioner and shall, accordingly, be liable
for the withholding of the tax vis-a-vis each and every
patient admitted into the hospital or clinic under the care
of the said medical practitioner.
"(ii) Exception. The withholding tax herein
prescribed shall not apply whenever there is proof that no
professional fee has in fact been charged by the medical
practitioner and paid by his patient, Provided, however,
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that this fact is shown in a sworn declaration (ANNEX A


hereof) jointly executed by the medical practitioner, the
patient or his duly authorized representative, and the
administrator of the hospital or clinic. This sworn
declaration shall form part of the records of the hospital or
clinic and shall constitute as part of its records and shall be
made readily available to any duly authorized Revenue
Officer for tax audit purpose, Provided, further, that the
said administrator of the hospital or clinic shall inform the
Revenue District Office having jurisdiction over such
hospital or clinic about any medical practitioner who fails
or refuses to execute the sworn statement herein
prescribed, within ten (10) days from the occurrence of
such event.
cda

"(b) The rules herein prescribed shall likewise apply to rendering of


medical services by medical practitioners through a duly registered
professional partnership for the practice of the medical profession
provided, however, that the rate of the withholding tax to be imposed shall
be at five percent (5%), pursuant to the provisions of Sub-section (B) of this
Section."

See earlier provision under Section 1(i), Revenue Regulations No 6-85,


and subsequent amendment made by Revenue Regulations No. 1-89.
Section 2.57.2 (J) - 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
52

As last amended by Section 3, Revenue Regulations No. 17-2003.


Original text:
Section 2.57.2. Income Payments Subject to Creditable Withholding Tax
and Rates Prescribed Thereon. Except as herein otherwise provided, there
shall be withheld a creditable income tax at the rates herein specified for each
class of payee from the following items of income payments to persons residing
in the Philippines:
xxx

xxx

xxx

(J) Gross selling price or total amount of consideration or its


equivalent paid to the seller/owner for the sale, exchange or transfer of. Real
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property, other than capital assets, sold by an individual, corporation, estate,


trust, trust fund or pension fund and the seller/transferor is habitually engaged in
the real estate business in accordance with the following schedule
Those which are exempt from a withholding
tax at source as prescribed in Sec. 2.57.5 of
these regulations

Exempt

With a selling price of five hundred thousand


pesos (P500,000.00) or less

1.5%

With a selling price of more than five hundred


thousand pesos (P500,000.00) but not more
than two million pesos (P2,000,000.00)

3.0%

With selling price of more than two million pesos


(P2,000,000.00)

5.0%

A seller/transferor must show proof of registration with HLURB or


HUDCC to be considered as habitually engaged in the real estate business.
Real property, other than capital asset, by an individual, estate, trust,
trust fund or pension fund or by a corporation who is not habitually engaged in
the real estate business Seven and one-half percent (7.5%).
LLphil

Gross selling price shall mean the consideration stated in the sales
document or the fair market value determined in accordance with Section 6 (E)
of the Code, as amended, whichever is higher. In an exchange, the fair market
value of the property received in exchange, as determined in the Income Tax
Regulations shall be used.
Where the consideration or part thereof is payable on installment, no
withholding of tax is required to be made on the periodic installment payments
where the buyer is an individual not engaged in trade or business. In such a case,
the applicable rate of tax based on the entire consideration shall be withheld on
the last installment or installments to be paid to the seller.
However, if the buyer is engaged in trade or business, whether a
corporation or otherwise, the tax shall be deducted and withheld by the buyer on
every installment.
xxx

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xxx

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As amended by Section 3, Revenue Regulations No. 6-2001:


Section 2.57.2. Income Payments Subject to Creditable Withholding Tax
and Rates Prescribed Thereon. Except as herein otherwise provided, there
shall be withheld a creditable income tax at the rates herein specified for each
class of payee from the following items of income payments to persons residing
in the Philippines:
xxx

xxx

xxx

(J) 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 A creditable withholding tax based
on the gross selling price/total amount of consideration or the fair market
value determined in accordance with Section 6(E) of the Code, whichever is
higher, paid to the seller/owner for the sale, transfer or exchange of real
property, other than capital asset, shall be imposed upon the withholding
agent/buyer, in accordance with the following schedule:
A.

Where the seller/transferor is exempt from creditable withholding


tax in accordance with Sec 2.57.5 of these regulations
Exempt
B.

Upon the following values of real property, where the


seller/transferor is habitually engaged in the real estate business:
With a selling price of Five Hundred Thousand Pesos
(P500,000.00) or less

1.5%
With a selling price of more than Five Hundred Thousand Pesos
(P500,000.00) but not more than Two Million Pesos
(P2,000,000.00)
3.0%
With a selling price of more than Two Million Pesos
(P2,000,000.00)
5.0%
C.

Where the seller/transferor is not habitually engaged in the


real estate business

6.0%
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Registration with the HLURB or HUDCC shall be sufficient for a


seller/transferor to be considered as habitually engaged in the real estate
business. If the seller/transferor is not registered with HLURB or HUDCC,
he/it may prove that he/it is engaged in the real estate business by offering
other satisfactory evidence (for example, he/it consummated during the
preceding year at least six taxable real estate transactions, regardless of
amount). Notwithstanding the foregoing, for purposes of these Regulations,
banks shall not be considered as habitually engaged in the real estate
business.
Gross selling price shall mean the consideration stated in the sales
document or the fair market value determined in accordance with Section 6 (E)
of the Code, whichever is higher. In an exchange, the fair market value of the
property received in exchange shall be considered as the consideration.
If the buyer is an individual not engaged in trade or business, the
following rules shall apply:
(i) If the sale is a sale of property on the installment plan (that is,
payments in the year of sale do not exceed 25% of the selling price), no
withholding of tax is required to be made on the periodic installment
payments. In such a case, the applicable rate of tax based on the gross selling
price or fair market value of the property, whichever is higher, shall be
withheld on the last installment or installments to be paid to the seller until
the tax is fully paid.
(ii) If, on the other hand, the sale is on a "cash basis" or is a
"deferred-payment sale not on the installment plan" (that is, payments in the
year of sale exceed 25% of the selling price), the buyer shall withhold the tax
based on the gross selling price or fair market value of the property,
whichever is higher, on the first installment.
However, if the buyer is engaged in trade or business, whether a
corporation or otherwise, these rules shall apply:
(i) If the sale is a sale of property on the installment plan (that is,
payments in the year of sale do not exceed 25% of the selling price), the tax
shall be deducted and withheld by the buyer on every installment.
(ii) If, on the other hand, the sale is on a "cash basis" or is a
"deferred-payment sale not on the installment plan" (that is, payments in the
year of sale exceed 25% of the selling price), the buyer shall withhold the tax
based on the gross selling price or fair market value of the property,
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whichever is higher, on the first installment.


In any case, no Certificate Authorizing Registration (CAR) shall be
issued to the buyer unless the creditable withholding tax due on the sale,
transfer or exchange of real property other than capital asset has been fully
paid.

See also Section 4, Revenue Regulations No. 8-98.


See earlier provision under Section 1(j), Revenue Regulations No. 6-85,
and subsequent amendments made by Revenue Regulations No. 12-89, 1-90,
6-94, 7-94, 8-94, and 12-94.
See also issuances on Republic Act No. 7279, otherwise known as the
"Urban Development and Housing Act of 1992" Revenue Regulations No.
9-93; Revenue Regulations No. 11-97; Revenue Regulations No. 17-2001;
Revenue Memorandum Circular No. 3-2001; Revenue Memorandum
Circular No. 42-2001; and Revenue Memorandum Circular No. 43-2001.
See further Revenue Memorandum Order No. 66-99, Revenue
Memorandum Order No. 13-2001 and Revenue Regulations No. 4-99.
Section 2.57.2 (K) - Additional income payments to government personnel from
importers, shipping and airline companies, or their agents
53

See earlier provision under Section 1(l), Revenue Regulations No. 6-85, and
subsequent amendments made by Revenue Regulations Nos. 4-91, 6-94, 7-94,
8-94, and 12-94.

Section 2.57.2 (L) - Certain Income Payments Made by Credit Card Companies
54

As amended by Section 3, Revenue Regulations No. 6-2001.


Original text:
Section 2.57.2. Income Payments Subject to Creditable Withholding Tax
and Rates Prescribed Thereon. Except as herein otherwise provided, there
shall be withheld a creditable income tax at the rates herein specified for each
class of payee from the following items of income payments to persons residing
in the Philippines:
xxx

xxx

xxx

(L) Certain income payments made by credit card companies. On


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the gross amounts paid by any credit card company in the Philippines to any
business entity, whether a natural or juridical person, representing the sales of
goods/services made by the aforesaid business entity to cardholders One half
percent (1/2%);
xxx

xxx

xxx

See earlier provision under Section 1(m), Revenue Regulations No. 6-85,
and subsequent amendments made by Revenue Regulations Nos. 6-94, 7-94,
8-94, 12-94, and 16-94.
Section 2.57.2 (M) - Income Payments Made by the Top Twenty Thousand (20,000)
Corporations
55

Now as amended by Section 2, Revenue Regulations No. 11-2014 and as last


amended by Section 2, Revenue Regulations No. 6-2009.
Original text:
Section 2.57.2. Income Payments Subject to Creditable Withholding Tax
and Rates Prescribed Thereon. Except as herein otherwise provided, there
shall be withheld a creditable income tax at the rates herein specified for each
class of payee from the following items of income payments to persons residing
in the Philippines:
xxx

xxx

xxx

(M) Income payments made by the top five thousand (5,000)


corporations. Income payments made by any of the top five thousand (5,000)
corporations, as determined by the Commissioner, to their local supplier of
goods One percent (1%);

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(1)

The term "goods" pertains to tangible personal property. It does


not include intangible personal property as well as real property.

(2)

The term "local suppliers of goods" pertains to a supplier from


whom any of the top five thousand (5,000) corporations, as
determined by the Commissioner, regularly makes its purchases
of goods. As a general rule, this term does not include a casual
purchase of goods, that is, purchases made from non-regular
suppliers and oftentimes involving single purchases. However, a
single purchase which involves one hundred thousand pesos
(P100,000.00) or more shall be subject to a withholding tax.

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(3)

A corporation shall not be considered a withholding agent for


purposes of this Section, unless such corporation has been
determined and duly notified in writing by the Commissioner
that it has been selected as one of the top five thousand (5,000)
corporations.

(4)

The withholding agent shall submit on a semestral basis a list of


its regular suppliers of goods to the Revenue District Office
(RDO) having jurisdiction over the withholding agent's principal
place of business on or before July 31 and January 31 of each
year.
xxx

xxx

xxx

As amended by Section 2, Revenue Regulations No. 6-2009.


Section 2.57.2. Income Payments Subject to Creditable Withholding Tax
and Rates Prescribed Thereon. Except as herein otherwise provided, there
shall be withheld a creditable income tax at the rates herein specified for each
class of payee from the following items of income payments to persons residing
in the Philippines:
xxx

xxx

xxx

(M) Income payments made by the top twenty thousand (20,000) private
corporations to their local/resident supplier of goods and local/resident
supplier of services other than those covered by other rates of withholding tax.
Income payments made by any of the top 20,000 private corporations, as
determined by the Commissioner, to their local/resident supplier of goods and
local/resident supplier of services, including non-resident aliens engaged in
trade or business in the Philippines. Provided, however, that for purchases
involving 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.
Supplier of goods

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One percent (1%)

Supplier of services

Two percent (2%)

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Top 20,000 private corporations shall include a corporate taxpayer who


has been determined and notified by the Bureau of Internal Revenue (BIR) as
having satisfied any of the following criteria:
a.
Classified and duly notified by the Commissioner as a large
taxpayer under Revenue Regulations 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

d.

Total percentage tax paid of at least P100,000 for the preceding

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

g.

Total excise tax payment of at least P100,000 for the preceding

year;

year;

year;

year.
Illustrative example for agricultural products:
Question: How do we compute the 1% expanded withholding tax
(EWT) on purchases of palay, an agricultural product, made by ABC
Corporation, included in the BIR's list of Top 20,000 Private Corporations,
from Mr. Ben Soriano, a small supplier/planter based on the following
information:
Number of
Transactions Year

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Purchase Amount

One

2009

P 90,000.00

Two

2010

320,000.00

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One

2011

400,000.00

One

2012

90,000.00

Answer:
1.
In 2009, the transaction is exempt from the 1% EWT since the
amount is less than P300,000.00.
2.
In 2010, only the amount in excess of P300,000.00 or
P20,000.00 shall be subject to the 1% EWT. Thus, the 1% EWT shall be
P200.00 (P20,000.00 x 1%).
3.
In 2011, the amount of P100,000.00 shall be subject to the 1%
EWT since the amount is in excess of the P300,000.00 threshold. Therefore,
the amount of P1,000.00 shall be withheld (P100,000.00 x 1%).
4.
In 2012, the transaction is exempt from the 1% EWT since the
amount involved is only P90,000.00 which is below the P300,000.00
threshold.
xxx

xxx

xxx

As amended by Section 2, Revenue Regulations No. 14-2008:


"Sec. 2.57. Withholding of Tax at Source.
"Sec. 2.57.2. Income payment subject to creditable withholding tax and
rates prescribed thereon. Except as herein otherwise provided, there shall be
withheld a creditable income tax at the rates herein specified for each class of
payee from the following items of income payments to persons residing in the
Philippines.
"xxx

xxx

xxx

"(M) Income payments made by the top twenty thousand (20,000)


private corporations to their local/resident supplier of goods and local/resident
supplier of services other than those covered by other rates of withholding tax.
Income payments made by any of the top twenty thousand (20,000) private
corporations, as determined by the Commissioner, to their local/resident
supplier of goods and local/resident supplier of services, including non-resident
alien engaged in trade or business in the Philippines

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Supplier of goods One percent (1%)


Supplier of services Two percent (2%)
"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:
CHaDIT

(a) Classified and duly notified by the Commissioner


as a large taxpayer under Revenue Regulations 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) Any taxpayer with net VAT paid or payable for
the preceding year of at least P100,000;
(c) Any taxpayer with annual income tax paid or
payable for the preceding year of at least P200,000;
(d) Any taxpayer with percentage taxes for the
preceding year of at least P100,000;
(e) Any taxpayer whose gross sales for the preceding
year is over P10,000,000;
HScaCT

(f) Any taxpayer whose gross purchases for the


preceding year is over P5,000,000.
"The term "goods" pertains to tangible personal property. It does not
include intangible personal property, as well as real property.
"The term "local/resident suppliers of goods" pertains to a supplier from
whom any of the top twenty thousand (20,000) private corporations, as
determined by the Commissioner, regularly makes its purchases of goods. As a
general rule, this term does not include a casual purchase of goods, that is,
purchase made from a non-regular supplier and oftentimes involving a single
purchase. However, a single purchase which involves Ten thousand pesos
(P10,000.00) or more shall be subject to a withholding tax. The term "regular
suppliers" refers to suppliers who are engaged in business or exercise of
profession/calling with whom the taxpayer-buyer has transacted at least six (6)
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transactions, regardless of amount per transaction, either in the previous year or


current year. The same rules apply to local/resident supplier of services other
than those covered by separate rates of withholding tax.
"A corporation shall not be considered a withholding agent for purposes
of this Section, unless such corporation has been determined and duly notified in
writing by the Commissioner that it has been selected as one of the top twenty
thousand (20,000) private corporations.
"Any corporation which has been duly classified and notified as large
taxpayer by the Commissioner pursuant to RR 1-98, as amended, shall be
automatically considered one of the top twenty thousand (20,000) private
corporations, provided, however, that its authority as a withholding agent shall
be effective only upon receipt of written notice from the Commissioner that it
has been classified as a large taxpayer, as well as one of the top twenty
thousand (20,000) private corporations, for purposes of these regulations.
"Any corporation shall remain a withholding agent for purposes of these
regulations, unless the Commissioner notifies it in writing that it shall cease to
be one. The following, however, are some of the reasons that a taxpayer shall
automatically cease to be a withholding agent, and therefore no prior written
notice, for purposes of these regulations, is required, to wit:
IcTCHD

(a) closure/cessation of business/dissolution


taxpayer with notice of dissolution given to the BIR);

(for

(b) merger/consolidation (for dissolved or absorbed


corporation);
(c) any other form of business combination wherein
by operation of law a corporate taxpayer loses its juridical
personality.
"The withholding agent shall submit on a semestral basis a list of its
regular suppliers of goods and/or services to the Large Taxpayers Assistance
Division/Large Taxpayers District Office in the case of large taxpayers duly
notified as such pursuant to RR 1-98, as amended, or Revenue District Office
(RDO) having jurisdiction over the withholding agent's principal place of
business on or before July 31 and January 31 of each year.
"A government-owned or -controlled corporation previously classified as
one of the top five thousand (5,000) corporations under RR 12-94, as amended,
shall cease to be a withholding agent or included in the top twenty thousand
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(20,000) private corporations for purposes of these regulations but rather shall
be treated as one under the succeeding sub-section (N) since it is already
withholding 1% or 2% of the amount paid for the purchase of goods/services
from local/resident suppliers.
TAIESD

"The Commissioner of Internal Revenue may recommend to the


Secretary of Finance the amendment/modification to any or all of the criteria in
the determination and selection of taxpayers forming part of the top twenty
thousand (20,000) private corporations after considering such factors as
inflation, volume of business, and similar factors. Provided, however, that the
Commissioner is empowered to conduct periodic review as to the number of
taxpayers who ceased to qualify under the category of top twenty thousand
(20,000) private corporations for purposes of delisting them or excluding them
from the list and to identify taxpayers to be added to the list of top twenty
(20,000) private corporations.
"All taxpayers previously included in the list of top 5,000 private
corporations under RR 12-94, as amended, and those who qualified as top ten
thousand (10,000) private corporations under RR 17-2003 shall continue to
withhold one percent (1%) for supplier of goods and 2% for supplier of services
upon the effectivity of these Regulations, unless any of the following situations
occur: (a) the Commissioner communicates in writing that they have ceased to
qualify as taxpayers includible in the list of top twenty thousand (20,000)
private corporations, or (b) those officially identified to have ceased business
operations, or undergone any of the business combinations wherein by operation
of law the juridical personality of said taxpayers ceased."

As amended by Section 3, Revenue Regulations No. 17-2003:


"Sec. 2.57.2. Income payments subject to creditable withholding tax
and rates prescribed thereon. Except as herein otherwise provided, there
shall be withheld a creditable income tax at the rates herein specified for each
class of payee from the following items of income payments to persons
residing in the Philippines:
xxx

xxx

xxx

(M) Income payments made by the top ten thousand (10,000) private
corporations to their local/resident supplier of goods and local/resident
supplier of services other than those covered by other rates of withholding
tax. Income payments made by any of the top ten thousand (10,000)
private corporations, as determined by the Commissioner, to their
local/resident supplier of goods and local/resident supplier of services,
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including non-resident alien engaged in trade or business in the Philippines


Supplier of goods One percent (1%)
Supplier of services Two percent (2%)
Top ten thousand (10,000) 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
Regulations No. 1-98, as amended (automatic inclusion);
b) Any taxpayer with net VAT paid or payable for
the preceding year of at least P100,000.00;
c) Any taxpayer with annual income tax paid or
payable for the preceding year of at least P200,000.00;
d) Any taxpayer with percentage taxes for the
preceding year of at least P100,000.00;
e) Any taxpayer whose gross sales for the
preceding year is over P10,000,000.00; or
f)
Any taxpayer whose gross purchases for the
preceding year is over 5,000,000.00.
The term "goods" pertains to tangible personal property. It does not
include intangible personal property as well as real property.
The term "local/resident supplier of goods" pertains to a supplier from
whom any of the top ten thousand (10,000) private corporations, as
determined by the Commissioner, regularly makes its purchases of goods. As
a general rule, this term does not include a casual purchase of goods, that
is, purchases made from non-regular suppliers and oftentimes involving
single purchases. However, a single purchase which involves ten thousand
pesos (P10,000.00) or more shall be subject to a withholding tax. The term
"regular suppliers" refers to suppliers who are engaged in business or
exercise of profession/calling with whom the taxpayer-buyer has transacted
at least six (6) transactions, regardless of amount per transaction, either in
the previous year or current year. The same rules apply to local/resident
supplier of services other than those covered by separate rates of
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withholding tax.
A corporation shall not be considered a withholding agent for purposes
of this Section, unless such corporation has been determined and duly
notified, in writing, by the Commissioner that it has been selected as one of
the top ten thousand (10,000) private corporations.
Any corporation which has been duly classified and notified as large
taxpayer by the Commissioner pursuant to RR 1-98, as amended, shall be
automatically considered one of the top ten thousand (10,000) private
corporations, provided, however, that its authority as a withholding agent
shall be effective only upon receipt of written notice from the Commissioner
that it has been classified as a large taxpayer, as well as one of the top ten
thousand (10,000) private corporations, for purposes of these regulations.
Any corporation shall remain a withholding agent for purposes of
these regulations, unless the Commissioner notifies it in writing that it shall
cease to be one. The following, however, are some of the reasons that a
taxpayer shall automatically cease to be a withholding agent, and therefore
no prior written notice, for purposes of these Regulations, is required, to
wit:
a) closure/cessation of business/dissolution (for
taxpayer with notice of dissolution given to the BIR),
b) merger/consolidation (for dissolved or absorbed
corporation);
c) any other form of business combination wherein
by operation of law a corporate taxpayer loses its juridical
personality.
The withholding agent shall submit on a semestral basis a list of
regular suppliers of goods and/or services to the Large Taxpayers Assistance
Division/Large Taxpayers District Office in the case of large taxpayers duly
notified as such pursuant to RR 1-98, as amended, or Revenue District Office
having jurisdiction over the withholding agent's principal place of business on
or before July 31 or January 31 of each year.
A government-owned or controlled corporation previously classified
as one of the top five thousand (5,000) corporations under RR 14-94, as
amended, shall cease to be a withholding agent or included in the top ten
thousand (10,000) private corporations for purposes of these regulations but
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rather shall be treated as one under the succeeding sub-section (N) since it
is already withholding two percent (2%) of the amount paid for the
purchase of goods/services from local/resident suppliers.
The Commissioner of Internal Revenue may recommend to the
Secretary of Finance the amendment/modification to any or all of the
criteria in the determination and selection of taxpayers forming part of the
top ten thousand (10,000) private corporations after considering such
factors as inflation, volume of business, and similar factors. Provided,
however, That the Commissioner is empowered to conduct periodic review
as to the number of taxpayers who ceased to qualify under the category of
top ten thousand private corporations for purposes of delisting them or
excluding them from the list and to identify taxpayers to be added to the list
of top 10,000 private corporations. The top ten thousand (10,000) private
corporations will be announced through the issuance of a Revenue
Memorandum Circular to be issued for this purpose.
All taxpayers previously included in the list of Top 5,000
Corporations under RR 12-94, as amended, shall continue to withhold the
one percent (1%) withholding tax (which shall become 1% for supplier of
goods and 2% for supplier of services upon the effectivity of these
Regulations) unless any of the following situations occur: (a) the
Commissioner communicates in writing that they have ceased to qualify as
taxpayers includible in the list of top ten thousand private corporations, or
(b) those officially identified to have ceased business operations, or
undergone any of the business combinations wherein by operation of law
the juridical personality of said taxpayers ceased.
xxx

xxx

xxx

As amended by Section 3, Revenue Regulations No. 6-2001:


"SEC. 2.57.2. Income payment subject to creditable withholding tax and
rates prescribed thereon Except as herein otherwise provided, there shall be
withheld a creditable income tax at the rates herein specified for each class of
payee from the following items of income payments to persons residing in the
Philippines:
xxx

xxx

xxx

(M) Income payments made by the top five thousand (5,000)


corporations. Income payments made by any of the top five thousand (5,000)
corporations, as determined by the Commissioner, to their local supplier of
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goods One percent (1%)


(1) The term "goods" pertains to tangible personal property. It does not
include intangible personal property as well as real property.
(2) The term "local suppliers of goods" pertains to a supplier from
whom any of the top five thousand (5,000) corporations, as determined by
the Commissioner, makes its purchases of goods.
(3) A corporation shall not be considered a withholding agent for
purposes of this Section, unless such corporation has been determined and duly
notified in writing by the Commissioner that it has been selected as one of the
top five thousand (5,000) corporations.
(4) The withholding agent shall submit on a semestral basis of its
regular suppliers of goods to the Revenue District Office (RDO) having
jurisdiction over the withholding agent's principal place of business on or before
July 31 and January 31 of each year."

See earlier provision under Section 1(n), Revenue Regulations No. 6-85,
and subsequent amendments made by Revenue Regulations Nos. 6-94, 7-94,
8-94, and 12-94.
See also Revenue Memorandum Circular No. 28-94 (dated January 29,
1994) Re: Creditable Withholding Tax on Income Payments by Top 5,000
Corporations.
Section 2.57.2 (N) - Income Payments Made by the Government to Its Local/Resident
Supplier of Goods and Local/Resident Supplier of Services Other than those Covered by
Other Rates of Withholding Tax
56

As last amended by Section 3, Revenue Regulations No. 30-2003.


Original text:
Section 2.57.2. Income Payments Subject to Creditable Withholding Tax
and Rates Prescribed Thereon. Except as herein otherwise provided, there
shall be withheld a creditable income tax at the rates herein specified for each
class of payee from the following items of income payments to persons residing
in the Philippines:
xxx

xxx

xxx

(N) Income payments by government. Income payments, except any


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single purchase which is P10,000 and below, which are made by a government
office, national or local, including government-owned or controlled
corporations, on their purchases of goods from local suppliers One percent
(1%);
A government-owned or controlled corporation which is listed as one of
the top five thousand (5,000) corporations shall withhold the tax in its capacity
as a government-owned or controlled corporation rather than as one of the top
five thousand (5,000) corporations.
cdasia

xxx

xxx

xxx

As amended by Section 3, Revenue Regulations No. 17-2003:


"Sec. 2.57.2. Income payments subject to creditable withholding tax
and rates prescribed thereon. Except as herein otherwise provided, there
shall be withheld a creditable income tax at the rates herein specified for each
class of payee from the following items of income payments to persons
residing in the Philippines:
xxx

xxx

xxx

(N) Income payments made by the government to its local/resident


supplier of goods and local/resident supplier of services other than those
covered by other rates of withholding tax. Income payments, except any
casual or single purchase of P10,000.00 and below, which are made by a
government office, national or local, including barangays, or their attached
agencies or bodies, and government-owned or controlled corporations, on
their purchases of goods and purchases of services from local/resident
suppliers Two per cent (2%).
A government-owned and controlled corporation shall withhold the
tax in its capacity as a government-owned and controlled corporation rather
than as a corporation stated in Subsection (M) hereof.
xxx

xxx

xxx

As amended by Section 2, Revenue Regulations No. 14-2002:


"Sec. 2.57.2.
Except as herein otherwise provided, there shall be
withheld a creditable income tax at the rates herein specified for each class of
payee from the following items of income payments to persons residing in the
Philippines:
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xxx

xxx

xxx

(N) Income payments by government. Income payments, except any


casual or single purchase of P10,000.00 and below, which are made by a
government office, national or local including barangays, or their attached
agencies or bodies, and government-owned or controlled corporations, on their
purchases of goods from local suppliers Two percent (2%);
A government-owned or controlled corporation shall withhold the tax in
its capacity as a government-owned or controlled corporation rather than as a
corporation stated in Subsection (M) hereof.
xxx

xxx

xxx

See earlier provision under Section 1(n), Revenue Regulations No. 6-85,
and subsequent amendments made by Revenue Regulations Nos. 6-94, 7-94,
8-94, and 12-94.
Section 2.57.2 (O) - Commissions of Independent and/or Exclusive Sales
Representatives, and Marketing Agents of Companies
57

As amended by Section 3, Revenue Regulations No. 17-2003.


As added by Section 2, Revenue Regulations No. 14-2002:
"Sec. 2.57.2.
Except as herein otherwise provided, there shall be
withheld a creditable income tax at the rates herein specified for each class of
payee from the following items of income payments to persons residing in the
Philippines:
xxx

xxx

xxx

(O) Commissions of independent and exclusive distributors,


medical/technical and sales representatives, and marketing agents of
multi-level marketing companies. On gross commissions paid by
multi-level marketing companies to independent and exclusive distributors,
medical/technical and sales representatives, and marketing agents and
sub-agents on their sale of goods or services by way of direct selling or
similar arrangements. Ten percent (10%);
'Multi-level marketing' is a system of direct selling in which
consumer products are sold by individuals where consumer products and
services are supplied by an established multi-level marketing company who
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encourages the distributor to build and manage his own sales force by
recruiting, motivating, and training others to sell the product or service. A
percentage on the sales of the distributor's sales force would be his
compensation in addition to his personal sales.
'Multi-level marketing companies' means any entity that is engaged
in the sale of its products or services through individual that directly sell
such products or services to the consumers."
xxx

xxx

xxx

Section 2.57.2 (P) - Tolling Fees Paid to Refineries


58

Added by Section 2, Revenue Regulations No. 14-2002.

Section 2.57.2 (Q) - Payments Made by Pre-need Companies to Funeral Parlors


59

Added by Section 2, Revenue Regulations No. 14-2002.

Section 2.57.2 (R) - Payments Made to Embalmers


60

Added by Section 2, Revenue Regulations No. 14-2002.

Section 2.57.2 (S) - Income Payments Made to Suppliers of Agricultural Products


61

Now as amended by Section 2, Revenue Regulations No. 11-2014 and as last


amended by Section 1, Revenue Regulations No. 1-2004.
See, however, Revenue Regulations No. 3-2004 suspending the
implementation of withholding tax on income payments made to suppliers of
agricultural products under Section 2.57.2(S) of Revenue Regulations 2-98, as
amended by RR 17-2003, further amended by RR 30-2003 and 1-2004.
As added by Section 3, Revenue Regulations No. 17-2003:
(S) Income payments made to suppliers of agricultural products.
Income payments made to regular agricultural suppliers such as those,
but not limited to, payments made by hotels, restaurants, resorts, caterers,
food processors, canneries, supermarkets, livestock, poultry, fish and
marine food products dealers and all other establishments, except for
income payments to casual agricultural suppliers where the annual gross
purchases therefrom do not exceed P20,000 One Percent (1%)
The term "regular agricultural suppliers" refers to suppliers with
whom the taxpayer has transacted at least six (6) transactions, regardless of
amount per transaction, either in the previous or current year. The term

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"casual agricultural supplier" refers to suppliers who did not qualify as


regular agricultural supplier as defined in the preceding statement.
The term "agricultural suppliers" refers to suppliers/sellers of
agricultural and marine food products, livestock and poultry of a kind
generally used as, or yielding or producing foods for human consumption;
and breeding stock and genetic materials therefor. "Livestock" shall
include cows, bulls and calves, pigs, sheep, goats and other animals similar
thereto. "Poultry" shall include fowls, ducks, geese, turkey and others
similar thereto. "Marine food products" shall include fish and crustaceans,
such as but not limited to, eels, trout, lobsters, shrimps, prawns, oysters,
mussels and clams.
Meat, fruits, fish, vegetables and other agricultural and marine food
products, even if they have undergone the simple processes of preparation
or preservation for the market, such as freezing, drying salting, smoking or
stripping, including those using advanced technological means of
packaging, such as shrink wrapping in plastics, vacuum packing, tetra-pak
and other similar packaging method, shall still be covered by this
subsection.
Polished and/or husked rice, corn grits, locally produced raw cane
sugar and ordinary salt shall be considered as agricultural food products.

As amended by Section 3, Revenue Regulations No. 30-2003:


(S) Income payments made to suppliers of agricultural products.
Income payments made to regular agricultural suppliers such as those, but not
limited to, payments made by hotels, restaurants, resorts, caterers, food
processors, canneries, supermarkets, livestock, poultry, fish and marine products
dealers, hardwares, factories, furniture shops and all other establishments,
except for income payments to casual agricultural suppliers where the annual
gross purchases therefrom do not exceed P20,000 One percent (1%)
xxx

xxx

xxx

The term "agricultural suppliers" refers to suppliers/sellers of


agricultural, forest and marine food and non food products, livestock and
poultry of a kind generally used as, or yielding or producing foods for human
consumption; and breeding stock and genetic materials therefor. "Livestock"
shall include cows, bulls and calves, pigs, sheep, goats and other animals similar
thereto. "Poultry" shall include fowls, ducks, geese, turkey and others similar
thereto. "Marine products" shall include fish and crustaceans, such as but not
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limited to, eels, trout, lobsters, shrimps, prawns, oysters, mussels and clams,
shells and other aquatic products.
xxx

xxx

xxx"

As amended by Section 2, Revenue Regulations No. 1-2004:


(S) Income payments made to suppliers of agricultural products.
Income payments made to agricultural suppliers such as those, but not limited
to, payments made by hotels, restaurants, resorts, caterers, food processors,
canneries, supermarkets, livestock, poultry, fish and marine products dealers,
hardwares, factories, furniture shops and all other establishments, except for
income payments to marginal income earners which, as defined in Revenue
Regulations 11-2000 dated December 12, 2000, refer to individuals not
otherwise deriving compensation as an employee under an
employee-employer relationship, but who are self-employed and deriving
gross sales/receipts not exceeding P100,000.00 during any 12-month period.
One percent (1%)
The term "agricultural suppliers" refers to suppliers/sellers of
agricultural, forest and marine food and non food products, livestock and
poultry of a kind generally used as, or yielding or producing foods for
human consumption; and breeding stock and genetic materials therefor.
"Livestock" shall include cows, bulls and calves, pigs, sheep, goats and
other animals similar thereto. "Poultry" shall include fowls, ducks, geese,
turkey and others similar thereto. "Marine products" shall include fish
and crustaceans such as but not limited to, eels, trout, lobsters, shrimps,
prawns, oysters, mussels and clams, shells and other aquatic products.
Meat, fruits, fish, vegetables and other agricultural and marine food
products, even if they have undergone the simple processes of preparation
or preservation for the market, such as freezing, drying salting, smoking or
stripping, including those using advanced technological means of
packaging, such as shrink wrapping in plastics, vacuum packing, tetra-pak
and other similar packaging method, shall still be covered by this
subsection.
Polished and/or husked rice, corn grits, locally produced raw cane
sugar and ordinary salt shall be considered as agricultural food products.

Section 2.57.2 (T) - Income Payments on Purchases of Minerals, Mineral Products and
Quarry Resources as Defined and Discussed in Section 151 of the Code

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62

As amended by Section 3, Revenue Regulations No. 6-2012.


As added by Section 3, Revenue Regulations No. 17-2003:
(T) Income payments on purchases of minerals, mineral products
and quarry resources as defined and discussed in Section 151 of the Code.
Income payments on purchases of minerals, mineral products, and quarry
resources such as but not limited to silver, gold, marble, granite, gravel, sand,
boulders and other materials/products One percent (1%)

As amended by Section 4, Revenue Regulations No. 7-2008:


xxx

xxx

xxx.

Section 2.57.2 (T) of Rev. Regs. No. 2-98, as amended by Rev. Regs.
No. 17-2003, is hereby further amended to read as follows:
"(T) Income payments on purchases of minerals,
mineral products and quarry resources as defined and
discussed in Section 151 of the Code. Income payments on
purchases of minerals, mineral products and quarry resources
such as but not limited to silver, gold, marble, granite, gravel,
sand, boulders and other materials/products Ten percent
(10%)"

Section 2.57.2 (U) - Meralco Payments


63

As amended by Section 2, Revenue Regulations No. 2-2009.


As added by Section 2, Revenue Regulations No. 8-2005:
"Sec. 2.57.2. Income payments subject to creditable tax and rates
prescribed thereon. Except as herein otherwise provided, there shall be
withheld a creditable income tax at the rates herein specified for each class of
payee from the following items of income payments to persons residing in the
Philippines:
xxx

xxx

xxx

(U) MERALCO Refund arising from Supreme Court Case G.R. No.
14814 of April 9, 2003 to customers under Phase IV as approved by ERC
On gross amount of refund given by MERALCO to Customers with active
contracts as classified by MERALCO Twenty Five Percent (25%); To
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Customers with terminated contracts Thirty Two Percent (32%);

Section 2.57.2 (V) - Interest Income on the Refund Paid either through Direct Payment or
Application Against Customers' Billings by Other Electric Distribution Utilities (DUs)
64

Added by Section 2, Revenue Regulations No. 2-2009.

Section 2.57.2 (W) - Income Payments Made by the Top Five Thousand (5,000)
Individual Taxpayers to Their Local/Resident Suppliers of Goods and Local/Resident
Suppliers of Services Other than those Covered by Other Rates of Withholding Tax
65

As amended by Section 2, Revenue Regulations No. 11-2014.


Original text as added by Section 2, Revenue Regulations No. 6-2009:
(W) Income payments made by the top five thousand (5,000)
Individual Taxpayers to their local/resident suppliers of goods and
local/resident suppliers of services other than those covered by other rates of
withholding tax. Income payments made by the Top 5,000 Individual
Taxpayers engaged in trade or business in the Philippines, as determined
by the Commissioner of Internal Revenue, to their local/resident
suppliers of goods and local/resident suppliers of services other than
those covered by other rates of withholding tax, including non-resident
aliens engaged in trade or business in the Philippines. Provided, however,
that for purchases involving agricultural products in their original state,
the tax required to be withheld under this sub-section shall only apply to
purchases in excess of the cumulative amount of Three Hundred
Thousand Pesos (P300,000) within the same year. For this purpose,
agricultural products in their original state as used in these regulations,
shall only include corn, coconut, copra, palay, rice, cassava, sugar cane,
coffee, fruits, vegetables, marine food products, poultry and livestocks.
xxx

xxx

xxx

See Section 2, Revenue Regulations No. 10-2009, clarifying that that


sub-paragraph (W) as issued under Section 2 of Revenue Regulations No.
8-2009 should be sub-paragraph (X).
Section 2.57.2 (X) - Income Payments Made by Political Parties and Candidates of Local
and National Elections of All Their purchase of Goods and Services
66

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As amended by Section 2, Revenue Regulations No. 10-2009, which also


clarified that sub-paragraph (W) as issued under Revenue Regulations No.
8-2009 should be sub-paragraph (X).
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As added by Section 2, Revenue Regulations No. 08-2009:


"Sec. 2.57.2. Income payments subject to creditable tax and rates
prescribed thereon. Except as herein otherwise provided, there shall be
withheld a creditable income tax at the rates herein specified for each class of
payee from the following items of income payments to persons residing in the
Philippines:
xxx

xxx

xxx

"(W)
(2) 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 Five percent (5%).

Section 2.57.2 (Y) - Interest Income Derived from Any Other Debt Instruments
67

Added by Section 7, Revenue Regulations No. 14-2012.

Section 2.57.2 (Z) - Income payments to Real Estate Investment Trust (REIT)
67-a Added by Section 2, Revenue Regulations No. 11-2014.
Section 2.57.2 (AA) - Income payments on locally produced raw sugar
67-b Added by Section 2, Revenue Regulations No. 11-2014.
Section 2.57.3 - Persons Required to Deduct and Withhold
68

As last amended by Section 3, Revenue Regulations No. 8-2009.


Original text:
SECTION 2.57.3. Persons Required to Deduct and Withhold. The
following persons are hereby constituted as withholding agents for purposes of
the creditable tax required to be withheld on income payments enumerated in
Section 2.57.2:

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(A)

In general, any juridical person, whether or not engaged in trade


or business;

(B)

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

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are not engaged in trade or business are also constituted as


withholding agents;
(C)

All government offices including government-owned or


controlled corporations, as well as provincial, city and municipal
governments.

As amended by Section 3, Revenue Regulations No. 8-2009:


"Sec. 2.57.3. Persons required to deduct and withhold. The
following persons are hereby constituted as withholding agents for purposes
of the creditable tax required to be withheld on income payments enumerated
in Section 2.57.2:
xxx

xxx

xxx

"(D) 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.

As amended by Section 5, Revenue Regulations No. 30-2003:


"Sec. 2.57.3. Persons required to deduct and withhold. . . .
xxx

xxx

xxx

Agents, employees or any person purchasing goods or services/paying


for and in behalf of the aforesaid withholding agents shall likewise withhold
in their behalf, provided that the official receipts of payment/sales invoice
shall be issued in the name of the person whom the former represents and the
corresponding certificate of taxes withheld (BIR Form No. 2307) shall
immediately be issued upon withholding of the tax.
All income payments which are required to be subjected to
withholding tax shall be subject to the corresponding withholding tax rate to
be withheld by the person having control over the payment and who, at the
same time, claims the expenses, [e.g. payments to utility companies which are
required to be subjected to withholding tax shall likewise be subjected to
withholding tax even if the meter or billing statement (e.g. electric or water
meter or the telephone bill) is not in the name of the payor, as long as valid
proof that payment of a particular expense is being shouldered by the
aforementioned payor (i. e. contract between the registered user of the meter
and the payor); payments made by persons who are sharing portion of the bill
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which is in the name of another person as long as he is a duly constituted


withholding agent and shall only withhold on the portion of the expense being
shouldered by him].
DaAETS

Income payments made thru brokers or agents or other person


authorized to collect/receive payments for and on behalf of the payee, whether
for consideration or otherwise, shall likewise be subject to the corresponding
withholding tax rates to be withheld by the payor/person having control over
the payment with the corresponding issuance of certificate of taxes withheld
in the name of the payee whom the agent represents.
The obligation to withhold is imposed upon the buyer-payor of income
although the burden of tax is really upon the seller-income earner hence,
unjustifiable refusal of the latter to be subjected to withholding shall be a
ground for the mandatory audit of his income tax liabilities (including
withholding tax) upon verified complaint of the buyer-payor."

As amended by Section 4, Revenue Regulations No. 17-2003:


"Sec. 2.57.3. Persons required to deduct and withhold. The
following persons are hereby constituted as withholding agents for purposes
of the creditable tax required to be withheld on income payments enumerated
in Section 2.57.2:
(A) . . .
(B) An individual, with respect to payments made in connection with
his trade or business.
However, insofar as taxable sales, exchanges or transfers of real
property are concerned, the buyers, whether or not engaged in trade or
business, are constituted as withholding agents. In any case, no Certificate
Authorizing Registration (CAR)/Tax Clearance Certificate (TCL) shall be
issued to the buyer unless the withholding tax due on the sale, transfer or
exchange of real property has been duly paid."
Since the tax herein involved and being withheld is income tax, the
burden of the tax is really upon the seller although the mode of payment of
the tax is through withholding by the buyer. As such, the tax withheld is
considered a part of the consideration agreed between the seller and buyer
resulting, therefore, to a net take to the seller of only the difference between
the agreed consideration/selling price and the tax withheld.

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(C) . . ."

As amended by Section 3, Revenue Regulations No. 14-2002:


"Sec. 2.57.3. Persons required to deduct and withhold. The
following persons are hereby constituted as withholding agents for purposes of
the creditable tax required to be withheld on income payments enumerated in
Section 2.57.2:
(A) In general, any juridical person, whether or not engaged in trade or
business;
(B) 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;
(C) All government offices including government-owned or controlled
corporations, as well as provincial, city and municipal governments and
barangays."

See earlier provision under Section 2, Revenue Regulations No. 6-85,


and subsequent amendments made by Revenue Regulations Nos. 1-90, 8-90,
6-94, 7-94, 8-94, and 12-94.
69

See Executive Order No. 651 entitled "Requiring Government Offices,


Agencies and Instrumentalities to Comply Strictly with the Laws and
Regulations on Withholding Taxes" (dated February 16, 1981).
See issuances designating personnel of government offices as withholding
agents Revenue Regulations No. 1-87, and subsequent amendments made
by Revenue Regulations No. 6-96, and Revenue Regulations No. 10-97;
Revenue Memorandum Circular No. 40-2001; Revenue Memorandum
Order No. 14-98; and Revenue Memorandum Order No. 70-98.
See also Revenue Regulations No. 8-98, Revenue Regulations No.
4-99, Revenue Memorandum Order No. 66-99, and Revenue Memorandum
Order No. 13-2001.

Section 2.57.4 - Time of Withholding


70
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As amended by Section 4, Revenue Regulations No. 12-2001.


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Original text:
SECTION 2.57.4. Time of Withholding. The obligation of the payor
to deduct and withhold the tax under Section 2.57 of these regulations arises at
the time an income is paid or payable, whichever comes first, the term "payable"
refers to the date the obligation become due, demandable or legally enforceable.

See earlier provision under Section 3, Revenue Regulations No. 6-85 and
subsequent amendments thereto.
Section 2.57.5 - Exemption from Withholding
71

As amended by Section 4, Revenue Regulations No. 14-2002.


Original text:
SECTION 2.57.5. Exemption from Withholding. The withholding of
creditable withholding tax prescribed in these Regulations shall not apply to
income payments made to the following:
(A) National government and
provincial, city or municipal governments;

its

instrumentalities,

including

(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:

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(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

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(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.

See earlier provision under Section 4, Revenue Regulations No. 6-85,


and subsequent amendment made by Revenue Regulations No. 12-94; and
Revenue Memorandum Circular No. 30-85 (dated July 25, 1985) Re:
Nullification of Section 4(a) of Revenue Regulations No. 6-85 or the Revised
and Consolidated Expanded Withholding Tax Regulations.
72

Entitled "An Act to Provide for a Comprehensive and Continuing Urban


Development and Housing Program, Establish the Mechanism for its
Implementation, and for Other Purposes" (dated March 24, 1992).
See issuances on RA 7279, otherwise known as the "Urban Development
and Housing Act of 1992" Revenue Regulations No. 9-93; Revenue
Regulations No. 11-97; Revenue Regulations No. 17-2001; Revenue
Memorandum Circular No. 3-2001; Revenue Memorandum Circular No.
42-2001; and Revenue Memorandum Circular No. 43-2001.

73

Entitled "An Act Providing for the Legal Framework and Mechanisms for the
Creation, Operation, Administration, and Coordination of Special Economic
Zones in the Philippines, Creating for this Purpose, the Philippine Economic
Zone Authority (PEZA), and for Other Purposes" (effective February 24,
1995).

74

EO 226 entitled "The Omnibus Investments Code Of 1987" (effective July 16,
1987).

75

Exemptions from tax on corporations.

Section 2.58 - Returns and Payment of Taxes Withheld at Source


76

See earlier provision under Section 2, Revenue Regulations No. 5-85, and
subsequent amendments made by Revenue Regulations Nos. 3-93 and 18-93;
and Revenue Memorandum Circular No. 42 -85.
See also Section 5, Revenue Regulations No. 8-98, Revenue

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Regulations No. 1-98 and Revenue Regulations No. 9-2001.


Section 2.58 (A) - Returns and Payment of Taxes Withheld at Source; Monthly Return
and Payment of Taxes Withheld at Source
77

As last amended by Section 3, Revenue Regulations No. 10-2009.


Original text:
SECTION 2.58. Returns and Payment of Taxes Withheld at Source.
(A) Monthly return and payment of taxes withheld at source
(1) WHERE TO FILE Creditable and final withholding taxes
deducted and withheld by the withholding agent shall be paid upon filing a
return in duplicate with the authorized agent banks located within the Revenue
District Office (RDO) having jurisdiction over the residence or principal place
of business of the withholding agent. In places where there is no authorized
agent banks, the return shall be filed directly with the Revenue District Officer,
Collection Officer or the duly authorized Treasurer of the city or municipality
where the withholding agent's residence or principal place of business is located,
or where the withholding agent is a corporation, where the principal office is
located except in cases where the Commissioner otherwise permits.
(2)

WHEN TO FILE

(a)

The withholding tax return, whether creditable or final, shall be


filed and payments should be made within ten (10) days after the
end of each month except for taxes withheld for December which
shall be filed on or before January 25 of the following year.

(b)

For large taxpayers , the filing of the return and the payment of
tax shall be made within twenty five (25) days after the end of
each month.

(c)

The return for final withholding taxes on interest from any


currency bank deposit and yield or any other monetary benefit
from deposit substitutes and from trust funds and similar
arrangements shall be filed and the payment made within twenty
five (25) days from the close of each calendar quarter.

(B) Withholding tax statement for taxes withheld Every payor


required to deduct and withhold taxes under these regulations shall furnish each
payee, whether individual or corporate, with a withholding tax statement, using
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the prescribed form (BIR Form 2307) showing the income payments made and
the amount of taxes withheld therefrom, for every month of the quarter within
twenty (20) days following the close of the taxable quarter employed by the
payee in filing his/its quarterly income tax return. Upon request of the payee,
however, the payor must furnish such statement to the payee simultaneously
with the income payment. For final withholding taxes, the statement should be
given to the payee on or before January 31 of the succeeding year.
(C) Annual information return for income tax withheld at source.
The payor is required to file with the Commissioner, Revenue Regional
Director, Revenue District Officer, Collection Agent in the city or municipality
where the payor has his legal residence or principal place of business, where the
government office is located in the case of a government agency, on or before
January 31 of the following year in which payments were made, an Annual
Information Return of Income Tax Withheld at Source (Form No. 1604),
showing among others the following information:
(1)

Name, address and taxpayer's, identification number (TIN); and

(2)

Nature of income payments, gross amount and amount of tax


withheld from each payee and such other information as may be
required by the Commissioner.

If the payor is the Government of the Philippines or any political


subdivision or agency thereof, or any government-owned or controlled
corporation, the return shall be made by the officer or employee having control
of the payments or by any designated officer or employee.

As amended by Section 3, Revenue Regulations No. 2-2009:


"Sec. 2.58. Returns and Payment of Taxes Withheld at Source.
"(A) Monthly return and payment of taxes withheld at source
"(1) WHERE TO FILE
xxx

xxx

xxx

xxx

xxx

"(2) WHEN TO FILE


xxx

"MERALCO and other Distribution Utilities (DUs) required to


withhold taxes pursuant to Sec. 2.57.2 (U) and (V) above shall submit a
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Monthly Alphalist of Payees (MAP) (Annex "A") for each calendar quarter,
which shall be electronically attached to the monthly remittance return of the
calendar quarter (e.g., BIR Form 1601-E for the quarter ending March with
attached MAP for January, February, March). It shall contain an alphalist of
customers from whom taxes have been withheld for the return period and in
whose behalf, the taxes were remitted under BIR Form No. 1601-E showing
the total amount of income and taxes withheld and remitted.
"xxx

xxx

xxx"

As amended by Section 3, Revenue Regulations No. 2-2006:


"Section 2.58.
RETURNS
WITHHELD AT SOURCE.
A.

AND PAYMENT OF TAXES

Monthly return and payment of taxes withheld at source.

(1) WHERE TO FILE Creditable withholding taxes (Expanded


Withholding Tax) deducted and withheld by the withholding agent shall be
remitted by accomplishing the Monthly Remittance Return of Creditable
Income Taxes Withheld (BIR Form No. 1601-E) and for final taxes
Monthly Remittance Return of Final Taxes Withheld (BIR Form No.
1601-F) in triplicate copies with Monthly Alphalist of Payees (MAP), the
tax base and the amount withheld paid upon filing the return with the
authorized agent banks under the jurisdiction of the Revenue District
Office (RDO)/Large Taxpayers District Office (LTDO) where the
withholding agent is required to register and file the return. In places
where there is no authorized agent bank, the return shall be filed directly with
the Revenue Collection Officer or the duly authorized Municipal/City
treasurer of the Revenue District Office where the withholding agent is
required to register or file the return, except in cases where the
Commissioner otherwise permits.
xxx

xxx

xxx"

As amended by Section 3, Revenue Regulations No. 8-2005:


"Sec. 2.58. RETURNS AND PAYMENT OF TAXES WITHHELD
AT SOURCE.
(A.) Monthly return and payment of taxes withheld at source
(1)
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xxx
(2)

xxx

xxx

xxx

xxx

WHEN TO FILE
xxx

MERALCO shall submit a Monthly Alphalist of


Payees (MAP) Annex "A" for each calendar quarter, which
shall be electronically attached to the monthly remittance
return of the calendar quarter (e.g. BIR Form 1601-E for
the quarter ending March with attached MAP for January,
February, March). It shall contain an alphalist of
customers from whom taxes have been withheld for the
return period and in whose behalf, the taxes were remitted
under BIR Form No. 1601-E showing the total amount of
income and taxes withheld and remitted.
SECHIA

xxx

xxx

xxx

As amended by Section 5, Revenue Regulations No. 17-2003:


"Sec. 2.58. RETURNS AND PAYMENT OF TAXES WITHHELD
AT SOURCE.
(A) Monthly return and payment of taxes withheld at source.
(1)

...

(2)

WHEN TO FILE

(a) For both large and non-large taxpayers, the withholding tax
return, whether creditable or final (including final withholding taxes on
interest from any currency bank deposit and yield or any other monetary
benefit from deposit substitutes and from trust funds and similar
arrangements) shall be filed and payments should be made, within ten (10)
days after the end of each month, except for taxes withheld for the month of
December of each year, which shall be filed on or before January 15 of the
following year; and except for the final capital gains tax on the sale or other
onerous disposition of real property considered as capital asset which must
be taken/withheld from the seller by the buyer and remitted within thirty
(30) days from the date of notarization of the transfer document to the
collecting agent of the RDO having jurisdiction over the place where the
property is located.
TCaEIc

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Nonetheless, in case of disposition of real property classified as


capital asset by an individual to the government, the tax to be imposed shall
be determined either under the normal income tax rate imposed in Sec.
24(A) or under a final capital gains tax of six percent (6%) imposed under
Sec. 24(D)(1) of the Code, at the option of the taxpayer-seller. Thus, if the
seller chooses the first option, the buyer does not have to withhold the six
percent (6%) final capital gains tax but no Certificate Authorizing
Registration shall be issued for the transaction until the seller or the buyer
shows the seller's filed income tax return reflecting the result of the subject
real estate transaction.
(b) With respect, however, to taxpayers, whether large or non-large,
who availed of the electronic filing and payment system (EFPS), the deadline
for electronically filing the applicable withholding tax returns and paying the
taxes due thereon via the EFPS shall be five (5) days later than the deadlines
set above, unless the EFPS regulations provide for different deadline dates
and except for the final capital gains tax on the sale, barter or exchange of
real property where the law fixes a definite deadline for the payment
thereof."

As amended by Section 4(1), Revenue Regulations No. 6-2001:


"SEC. 2.58. RETURNS AND PAYMENT OF TAXES WITHHELD
AT SOURCE.
(A) Monthly return and payment of taxes

xxx
(2)

xxx

xxx

WHEN TO FILE

(a) For both large and non-large taxpayers, the withholding tax
return, whether creditable or final (including final withholding taxes on
interest from any currency bank deposit and yield or any other monetary
benefit from deposit substitutes and from trust funds and similar
arrangements) shall be filed and payments should be made, within ten (10)
days after the end of each month, except for taxes withheld for the month of
December of each year, which shall be filed on or before January 15 of the
following year.
(b) With respect, however, to taxpayers, whether large or non-large,
who availed of the electronic filing and payment (EFPS), the deadline for
electronically filing the applicable withholding tax returns and paying the
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taxes due thereon via the EFPS shall be five (5) days later than the deadlines
set above."

78

See Revenue Memorandum Order No. 48-2000 (dated October 23, 2000)
Re: Re-classification of Status of Taxpayers Previously Classified as Large
Taxpayers Under Revenue Regulations No. 12-93, as Amended by Revenue
Regulations No. 3-94; Revenue Regulations No. 1-98; Revenue Regulations
No. 6-2001; Revenue Regulations No. 9-2001; and Revenue Regulations No.
12-2001.

Section 2.58 (B) - Returns and Payment of Taxes Withheld at Source; Withholding Tax
Statements for Taxes Withheld
79

As amended by Section 1, Revenue Regulations No. 3-2002.


Original text:
SECTION 2.58. Returns and Payment of Taxes Withheld at Source.
xxx

xxx

xxx

(B) Withholding tax statement for taxes withheld Every payor


required to deduct and withhold taxes under these regulations shall furnish each
payee, whether individual or corporate, with a withholding tax statement, using
the prescribed form (BIR Form 2307) showing the income payments made and
the amount of taxes withheld therefrom, for every month of the quarter within
twenty (20) days following the close of the taxable quarter employed by the
payee in filing his/its quarterly income tax return. Upon request of the payee,
however, the payor must furnish such statement to the payee simultaneously
with the income payment. For final withholding taxes, the statement should be
given to the payee on or before January 31 of the succeeding year.
xxx

xxx

xxx

See earlier provision under Section 6, Revenue Regulations No. 6-85 and
subsequent amendment made by Revenue Regulations No. 12-94.
Section 2.58 (C) - Returns and Payment of Taxes Withheld at Source; Annual
Information Return for Income Tax Withheld at Source
80

As last amended by Section 3, Revenue Regulations No. 10-2009.


Original text:

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SECTION 2.58. Returns and Payment of Taxes Withheld at Source.


xxx

xxx

xxx

(C) Annual information return for income tax withheld at source.


The payor is required to file with the Commissioner, Revenue Regional
Director, Revenue District Officer, Collection Agent in the city or municipality
where the payor has his legal residence or principal place of business, where the
government office is located in the case of a government agency, on or before
January 31 of the following year in which payments were made, an Annual
Information Return of Income Tax Withheld at Source (Form No. 1604),
showing among others the following information:
(1)

Name, address and taxpayer's, identification number (TIN); and

(2)

Nature of income payments, gross amount and amount of tax


withheld from each payee and such other information as may be
required by the Commissioner.

If the payor is the Government of the Philippines or any political


subdivision or agency thereof, or any government-owned or controlled
corporation, the return shall be made by the officer or employee having control
of the payments or by any designated officer or employee.
xxx

xxx

xxx

As amended by Section 1, Revenue Regulations No. 3-2002.


"Section 2.58. RETURNS AND PAYMENT OF TAXES WITHHELD AT
SOURCE.

xxx

xxx

xxx

(C) Annual information return for income tax withheld at source.


The payor is required to file with the BIR-Large Taxpayers Assistance
Division, Large Taxpayers District Office or the Excise Taxpayers Assistance
Division, or the Revenue District Office where the payor/employer is
registered as Withholding Agent, on or before March 1 of the following year
in which payments were made, an Annual Information Return of Creditable
Income Taxes Withheld (Expanded)/Income Payments Exempt from
Withholding Tax (BIR Form No. 1604-E) and on or before January 31 of
the said year an Annual Information Return of Income Taxes Withheld on
Compensation and Final Withholding Taxes (BIR Form No. 1604-CF),
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showing among others, the following information:


xxx

xxx

xxx

An individual whose sole income has been subjected to final


withholding tax provided under Section 57(A) shall not be required to file an
income tax return pursuant to Section 51(A)(2)(c) of the Tax Code. For
purposes of documentation, as may be required by other agencies in the
government (including, but not limited to, the Bureau of Immigration as well
as for purposes of establishing financial capacity for bank loans or credit card
application in private and public entities and other purposes, BIR Form No.
2306 duly signed by the employer and the employee shall suffice. The term
"an individual whose compensation income has been subjected to final
withholding tax" shall include aliens or Filipino citizens occupying the same
positions as the alien employees, as the case may be, who are employed by
regional operating headquarters, regional or area headquarters, offshore
banking units, petroleum service contractors and sub-contractors, pursuant to
pertinent provisions of Sections 25(C), (D), (E) and 57(A) of the Tax Code of
1997, Republic Act No. 8756, Presidential Decree No. 1354, and other
pertinent laws."

See also Revenue Regulations No. 7-2000.


See earlier provision under Section 3, Revenue Regulations No. 5-85 and
subsequent amendments thereto; and Section 5(b), Revenue Regulations No.
6-85 and subsequent amendments thereto.
Section 2.58.1 - Income of Recipient
81

Authority of the Commissioner to Compromise, Abate, and Refund or Credit


Taxes.

82

Payment and assessment of income tax for individual and corporations.

Section 2.58.2 - Registration with the Register of Deeds


83

As amended by Section 5, Revenue Regulations No. 14-2002.


Original text:
SECTION 2.58.2. Registration with the Register of Deeds. Deeds of
conveyances of land or land and building/improvement thereon arising from
sales, barters, or exchanges subject to the creditable expanded withholding tax
shall not be recorded by the Register of Deeds unless the Commissioner or his
duly authorized representative has certified that such transfers and conveyances

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have been reported and the expanded withholding tax, inclusive of the
documentary stamp tax, due thereon have been fully paid, pursuant to the
provisions of Sections 57 and 196 of the Code , respectively.

See Revenue Regulations No. 11-96; Revenue Regulations No. 8-98;


Revenue Memorandum Order No. 66-99; and Revenue Memorandum
Order No. 13-2001.
84

Withholding of Tax at Source, and Stamp Tax on Deeds of Sale and


Conveyance of Real Property, respectively.

85

Returns and payment of taxes withheld at source (Registration with Register of


Deeds).

86

Violations Committed by Government Enforcement Officers

Section 2.58.3 - Claim for Tax Credit or Refund


87

See earlier provision under Section 10, Revenue Regulations No. 6-85, and
subsequent amendment made by Revenue Regulations No. 12-94.

Section 2.58.3 (C) - Income of Recipient


88

Authority of the Commissioner to Compromise, Abate, and Refund or Credit


Taxes, and Recovery of Tax Erroneously or Illegally Collected, respectively.

Section 2.58.4 - Verification of Returns and Statement


89

See earlier provision under Section 7, Revenue Regulations No. 6-85, and
subsequent amendments thereto.

Section 2.58.5 - Requirement for Deductibility


90

As last amended by Section 6, Revenue Regulations No. 17-2003.


Original text:
SECTION 2.58.5. Requirement for Deductibility. Any income
payment which is otherwise deductible under the Code shall be allowed as a
deduction from the payor's gross income only if it is shown that the income tax
required to be withheld has been paid to the Bureau in accordance with Secs. 57
and 58 of the Code.
A deduction will also be allowed in the following cases where no
withholding of tax was made:

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(A) The payee reported the income and the withholding agent/taxpayer
pays the tax, including the interest incident to the failure to withhold the tax, and
surcharges, if applicable, at the time of the original audit and investigation;
(B) The recipient/payee failed to report the income on the due date
thereof, but the withholding agent/taxpayer pays the tax, including the interest
incident to the failure to withhold the tax and surcharges, if applicable, at the
time of the original audit and investigation;
(C) The withholding agent erroneously underwithheld the tax but pays
the difference between the correct amount and the amount of tax withheld,
including the interest, incident to such error, and surcharges, if applicable, at the
time of the original audit and investigation.

As amended by Section 6, Revenue Regulations No. 14-2002:


"Sec. 2.58.5. Requirements for Deductibility. Any income payment
which is otherwise deductible under the Code shall be allowed as a deduction
from the payor's gross income only if it is shown that the income tax required to
be withheld has been paid to the Bureau in accordance with Secs. 57 and 58 of
the Code.
A deduction will also be allowed in the following cases where no
withholding of tax was made:
(A) The payee reported the income and pays the tax due thereon and
the withholding agent pays the tax including the interest incident to the failure to
withhold the tax, and surcharges, if applicable, at the time of the audit
investigation or reinvestigation/reconsideration.
(B) The recipient/payee failed to report the income on the due date
thereof, but the withholding agent/taxpayer pays the tax, including the interest
incident to the failure to withhold the tax, and surcharges, if applicable, at the
time of the audit/investigation or reinvestigation/reconsideration.
(C) The withholding agent erroneously underwithheld the tax but pays
the difference between the correct amount and the amount of tax withheld,
including the interest, incident to such error, and surcharges, if applicable, at the
time of the audit/investigation or reinvestigation/reconsideration."

See earlier provision under Section 9, Revenue Regulations No. 6-85,


and subsequent amendment made by Revenue Regulations No. 8-90.
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91

Withholding Tax at Source, and Returns and Payment of Taxes Withheld at


Source, respectively.

Section 2.78.1 (A) - Withholding of Income Tax on Compensation Income;


Compensation Income
92

As last amended by Section 1, Revenue Regulations No. 8-2012.


Original text:
SECTION 2.78.1.
Income.

Withholding of Income Tax on Compensation

(A) Compensation Income Defined. In general, the term


"compensation" means all remuneration for services performed by an employee
for his employer under an employer-employee relationship, unless specifically
excluded by the Code.
The name by which the remuneration for services is designated is
immaterial. Thus, salaries, wages, emoluments and honoraria, allowances,
commissions (e.g. transportation, representation, entertainment and the like);
fees including director's fees, if the director is, at the same time, an employee of
the employer/corporation; taxable bonuses and fringe benefits except those
which are subject to the fringe benefits tax under Sec. 33 of the Code; taxable
pensions and retirement pay; and other income of a similar nature constitute
compensation income.
The basis upon which the remuneration is paid is immaterial in
determining whether the remuneration constitutes compensation. Thus, it may
be paid on the basis of piece-work, or a percentage of profits; and may be paid
hourly, daily, weekly, monthly or annually.
Remuneration for services constitutes compensation even if the
relationship of employer and employee does not exist any longer at the time
when payment is made between the person in whose employ the services had
been performed and the individual who performed them.
(1) Compensation paid in kind. Compensation may be paid in
money or in some medium other than money, as for example, stocks, bonds or
other forms of property. If services are paid for in a medium other than money,
the fair market value of the thing taken in payment is the amount to be included
as compensation subject to withholding. If the services are rendered at a
stipulated price, in the absence of evidence to the contrary, such price will be
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presumed to be the fair market value of the remuneration received. If a


corporation transfers to its employees its own stock as remuneration for services
rendered by the employee, the amount of such remuneration is the fair market
value of the stock at the time the services were rendered.
(2) Living quarters or meals. If a person receives a salary as
remuneration for services rendered, and in addition thereto, living quarters or
meals are provided, the value to such person of the quarters and meals so
furnished shall be added to the remuneration paid for the purpose of determining
the amount of compensation subject to withholding. However, if living quarters
or meals are furnished to an employee for the convenience of the employer, the
value thereof need not be included as part of compensation income.
(3) Facilities and privileges of a relatively small value. Ordinarily,
facilities and privileges (such as entertainment, medical services, or so called
"courtesy" discounts on purchases), furnished or offered by an employer to his
employees generally, are not considered as compensation subject to withholding
if such facilities or privileges are of relatively small value and are offered or
furnished by the employer merely as a means of promoting the health, goodwill,
contentment, or efficiency of his employees.
Where compensation is paid in property other than money, the employer
shall make necessary arrangements to ensure that the amount of the tax required
to be withheld is available for payment to the Commissioner.
(4) Tips and gratuities. Tips or gratuities paid directly to an
employee by a customer of the employer which are not accounted for by the
employee to the employer are considered as taxable income but not subject to
withholding.
(5) Pensions, retirement and separation pay. Pensions, retirement
and separation pay constitute compensation subject to withholding, except those
provided under Subsection B of this section.
(6) Fixed or variable transportation, representation and other
allowances
(a)

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IN GENERAL, fixed or variable transportation, representation


and other allowances which are received by a public officer or
employee or officer or employee of a private entity, in addition to
the regular compensation fixed for his position or office, is
compensation subject to withholding.

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(b)

Any amount paid specifically, either as advances or


reimbursements for travelling, representation and other bonafide
ordinary and necessary expenses incurred or reasonably expected
to be incurred by the employee in the performance of his duties
are not compensation subject to withholding, if the following
conditions are satisfied:
(i)

It is for ordinary and necessary travelling and


representation or entertainment expenses paid or incurred
by the employee in the pursuit of the trade, business or
profession; and

(ii)

The employee is required to account/liquidate for the


foregoing expenses in accordance with the specific
requirements of substantiation for each category of
expenses pursuant to Sec. 34 of the Code. The excess of
actual expenses over advances made shall constitute
taxable income if such amount is not returned to the
employer.
Reasonable
amounts
of
reimbursements/advances for travelling and entertainment
expenses which are pre-computed on a daily basis and are
paid to an employee while he is on an assignment or duty
need not be subject to the requirement of substantiation
and to withholding.

(7) Vacation and sick leave allowances. Amounts of "vacation


allowances or sick leave credits" which are paid to an employee constitute
compensation. Thus, the salary of an employee on vacation or on sick leave,
which are paid notwithstanding his absence from work, constitutes
compensation. However, the monetized value of unutilized vacation leave
credits of ten (10) days or less which were paid to the employee during the year
are not subject to income tax and to the withholding tax .
(8) Deductions made by employer from compensation of employee.
Any amount which is required by law to be deducted by the employer from the
compensation of an employee including the withheld tax is considered as part of
the employee's compensation and is deemed to be paid to the employee as
compensation at the time the deduction is made.
(9) Remuneration for services as employee of a nonresident alien
individual or foreign entity. The term "compensation" includes remuneration
for services performed by an employee of a nonresident alien individual, foreign
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partnership or foreign corporation, whether or not such alien individual or


foreign entity is engaged in trade or business within the Philippines. Any person
paying compensation on behalf of a non-resident alien individual, foreign
partnership, or foreign corporation which is not engaged in trade or business
within the Philippines is subject to all provisions of law and regulations
applicable to an employer.
(10) Compensation for services performed outside the Philippines.
Remuneration for services performed outside the Philippines by a resident
citizen for a domestic or a resident foreign corporation or partnership, or for a
non-resident corporation or partnership, or for a non-resident individual not
engaged in trade or business in the Philippines shall be treated as compensation
which is subject to tax.
A non-resident citizen as defined in these regulations is taxable only on
income derived from sources within the Philippines. In general, the situs of the
income whether within or without the Philippines, is determined by the place
where the service is rendered.
xxx

xxx

xxx

As amended by Section 2, Revenue Regulations No. 5-2011:


"Sec. 2.78.1. Withholding of Income Tax on Compensation Income.
(A) . . .
(1)

...
xxx

(3)

xxx

xxx

Facilities and privileges of relatively small value. . . .


xxx

xxx

xxx

The following shall be considered as "de minimis" benefits not subject


to income tax as well as withholding tax on compensation income of both
managerial and rank and file employees:

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(a)

Monetized unused vacation leave credits of private employees


not exceeding ten (10) days during the year;

(b)

Monetized value of vacation and sick leave credits paid to


government officials and employees;

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(c)

Medical cash allowance to dependents of employees, not


exceeding P750 per employee per semester or P125 per month;
DIAcTE

(d)

Rice subsidy of P1,500 or one (1) sack of 50 kg. rice per month
amounting to not more than P1,500;

(e)

Uniform and Clothing allowance not exceeding P4,000 per


annum;

(f)

Actual medical assistance, e.g., medical allowance to cover


medical and healthcare needs, annual medical/executive
check-up, maternity assistance, and routine consultations, not
exceeding P10,000.00 per annum;

(g)

Laundry allowance not exceeding P300 per month;

(h)

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;

(i)

Gifts given during Christmas and major anniversary celebrations


not exceeding P5,000 per employee per annum;

(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;

All other benefits given by employers which are not included in


the above enumeration shall not be considered as "de minimis" benefits,
and hence, shall be subject to income tax as well as withholding tax on
compensation income.
xxx

xxx

xxx"

As amended by Section 2, Revenue Regulations No. 10-2008:


"Sec. 2.78.1. Withholding of Income Tax on Compensation Income.
(A) Compensation Income Defined. . . .
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xxx

xxx

xxx

(3) Facilities and privileges of relatively small value. Ordinarily,


facilities, and privileges (such as entertainment, medical services, or so-called
"courtesy" discounts on purchases), otherwise known as "de minimis
benefits," furnished or offered by an employer to his employees, are not
considered as compensation subject to income tax and consequently to
withholding tax, if such facilities or privileges are of relatively small value
and are offered or furnished by the employer merely as means of promoting
the health, goodwill, contentment, or efficiency of his employees.
ADSIaT

The following shall be considered as "de minimis" benefits not subject


to income tax, hence, not subject to withholding tax on compensation income
of both managerial and rank and file employees:
(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;
CAaSED

Copyright 2015

(b)

Medical cash allowance to dependents of employees not


exceeding P750.00 per employee per semester or P125 per
month;

(c)

Rice subsidy of P1,500.00 or one (1) sack of 50-kg. rice per


month amounting to not more than P1,500.00;

(d)

Uniforms and clothing allowance not exceeding P4,000.00 per


annum;

(e)

Actual yearly medical benefits not exceeding P10,000.00 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 P10,000.00 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 celebrations


not exceeding P5,000.00 per employee per annum;

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(i)

Flowers, fruits, books, or similar items given to employees under


special circumstances, e.g., on account of illness, marriage, birth
of a baby, etc.; and

(j)

Daily meal allowance for overtime work not exceeding twenty


five percent (25%) of the basic minimum wage.

The amount of 'de minimis' benefits conforming to the ceiling herein


prescribed shall not be considered in determining the P30,000.00 ceiling of
'other benefits' excluded from gross income under Section 32 (b) (7) (e) of the
Code. Provided that, 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. Provided, further, that MWEs
receiving 'other benefits' exceeding the P30,000.00 limit shall be taxable on
the excess benefits, as well as on his salaries, wages and allowances, just
like an employee receiving compensation income beyond the SMW.
DcAEIS

Any amount given by the employer as benefits to its employees,


whether classified as "de minimis" benefits or fringe benefits, shall constitute
as deductible expense upon such employer.
Where compensation is paid in property other than money, the
employer shall make necessary arrangements to ensure that the amount of the
tax required to be withheld is available for payment to the Bureau of Internal
Revenue.
ScaHDT

xxx

xxx

xxx

As amended by Section 1, Revenue Regulations No. 5-2008:


"Sec. 2.78.1. Withholding of Income Tax on Compensation Income.
(A) . . .
(1)

...
xxx

(3)

xxx

xxx

Facilities and privileges of relatively small value. . . .


xxx

xxx

xxx

The following shall be considered as "de minimis" benefits not subject to


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income tax as well as withholding tax on compensation income of both


managerial and rank and file employees:
(a)

...
xxx

xxx

xxx

(c) Rice subsidy of P1,500.00 or one (1) sack of 50 kg. rice per month
amounting to not more than P1,500.00;
(d)

Uniform and Clothing allowance not exceeding P4,000.00 per

annum;
xxx

xxx

xxx

As amended by Section 1, Revenue Regulations No. 10-2000:


"Sec. 2.78.1. Withholding of Income Tax on Compensation Income.
"(A) . . .
"(1) Compensation paid in kind. . . .
"xxx

xxx

xxx

"(3) Facilities and privileges of relatively small value.


"xxx

xxx

xxx

"The following shall be considered as "de minimis" benefits not subject


to INCOME TAX AS WELL AS withholding tax on compensation income of
both managerial and rank and file employees:
(a) Monetized unused vacation leave credits of PRIVATE 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 to dependents of employees not exceeding
P750.00 per employee per semester or P125 per month;
(c) Rice subsidy of P1,000.00 or one (1) sack of 50-kg. rice per month
amounting to not more than P1,000.00;

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(d)

Uniform and clothing allowance not exceeding P3,000 per annum;

(e)

Actual yearly medical benefits not exceeding P10,000 per annum;

(f)

Laundry allowance not exceeding P300 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 celebrations
not exceeding P5,000 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 a baby, etc.,
and
(j) Daily meal allowance for overtime work not exceeding twenty five
percent (25%) of the basic minimum wage."
"xxx

xxx

xxx

"(6) Fixed or variable transportation, representation and other


allowances
"xxx

xxx

xxx

"(b) . . .
"(i) . . .
"(ii) The employee is required to account/liquidate for the expenses in
accordance with the specific requirements of substantiation for each category of
expenses pursuant to Sec. 34 of the Code. The excess of ADVANCES MADE
over ACTUAL EXPENSES shall constitute taxable income if such amount is
not returned to the employer. Reasonable amounts of reimbursements/advances
for travelling and entertainment expenses which are pre-computed on a daily
basis and are paid to an employee while he is on an assignment or duty need not
be subject to the requirements of substantiation and to withholding."
"(iii) . . .
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"(7) Vacation and sick leave allowances. Amounts of "vacation


allowances or sick leave credits" which are paid to an employee constitute
compensation. Thus, the salary of an employee on vacation or on sick leave,
which IS paid notwithstanding his absence from work constitutes compensation.
However, the monetized value of unutilized vacation leave credits of ten (10)
days or less which ARE paid to PRIVATE employees during the year AND
THE MONETIZED VALUE OF LEAVE CREDITS PAID TO
GOVERNMENT OFFICIALS AND EMPLOYEES SHALL NOT BE
SUBJECT TO INCOME TAX AND CONSEQUENTLY TO
WITHHOLDING TAX."
aTEScI

"xxx

xxx

xxx

As amended by Section 1, Revenue Regulations No. 8-2000:


"Sec. 2.78.1. Withholding of Income Tax on Compensation Income.
"(A) . . .
"(1) Compensation paid in kind. . . .
''Where compensation is paid in property other than money, the
employer shall make necessary arrangements to ensure that the amount of
the tax required to be withheld is available for payment to the Commissioner.
"(3) Facilities and privileges of relatively small value. Ordinarily,
facilities and privileges (such as entertainment, medical services, or so-called
"courtesy discounts" on purchases), otherwise known as "de minimis benefits,"
furnished or offered by an employer to his employees, are not considered as
compensation subject to INCOME TAX AND CONSEQUENTLY TO
withholding tax, if such facilities are offered or furnished by the employer
merely as means of promoting the health, goodwill, contentment, or efficiency
of his employees.
"THE FOLLOWING SHALL BE CONSIDERED AS "DE
MINIMIS" BENEFITS NOT SUBJECT TO WITHHOLDING TAX ON
COMPENSATION INCOME OF BOTH MANAGERIAL AND RANK AND
FILE EMPLOYEES:
(a)

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MONETIZED UNUSED VACATION LEAVE CREDITS


OF EMPLOYEES NOT EXCEEDING TEN (10) DAYS
DURING THE YEAR;

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(b)

MEDICAL CASH ALLOWANCE TO DEPENDENTS OF


EMPLOYEES
NOT
EXCEEDING
P750.00
PER
EMPLOYEE PER SEMESTER OR P125 PER MONTH;

(c)

RICE SUBSIDY OF P1,000.00 OR ONE (1) SACK OF


50-KG. RICE PER MONTH AMOUNTING TO NOT
MORE THAN P1,000.00.

(d)

UNIFORMS AND CLOTHING ALLOWANCE


EXCEEDING P3,000 PER ANNUM;

NOT

(e)

ACTUAL YEARLY MEDICAL


EXCEEDING P10,000 PER ANNUM;

NOT

(f)

LAUNDRY ALLOWANCE NOT EXCEEDING P300 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 P10,000.00 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 CELEBRATIONS NOT EXCEEDING
P5,000 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 A BABY, ETC.; AND

(j)

DAILY MEAL ALLOWANCE FOR OVERTIME WORK


NOT EXCEEDING TWENTY FIVE PERCENT (25%) OF
THE BASIC MINIMUM WAGE.

BENEFITS

THE AMOUNT OF "DE MINIMIS' BENEFITS CONFORMING


TO THE CEILING HEREIN PRESCRIBED SHALL NOT BE
CONSIDERED IN DETERMINING THE P30,000 CEILING OF
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"OTHER BENEFITS" PROVIDED UNDER SECTION 32(B)(7)(e) OF


THE CODE. HOWEVER, IF THE EMPLOYER PAYS MORE THAN
THE CEILING PRESCRIBED BY THESE REGULATIONS, THE
EXCESS SHALL BE TAXABLE TO THE EMPLOYEE RECEIVING
THE BENEFITS ONLY IF SUCH EXCESS IS BEYOND THE P30,000.00
CEILING. PROVIDED, FURTHER, THAT ANY AMOUNT GIVEN BY
THE EMPLOYER AS BENEFITS TO ITS EMPLOYEES, WHETHER
CLASSIFIED AS DE MINIMIS BENEFITS OR FRINGE BENEFITS,
SHALL CONSTITUTE AS DEDUCTIBLE EXPENSE UPON SUCH
EMPLOYER.
"(4) . . .
(5)

..

"(6) Fixed or variable transportation, representation and other


allowances.
"(a)

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IN GENERAL, fixed or variable transportation, representation


and other allowances which are received by a public officer or
employee of a private entity, in addition to the regular
compensation fixed for his position or office, is compensation
subject to withholding. PROVIDED, HOWEVER, THAT
REPRESENTATION
AND
TRANSPORTATION
ALLOWANCE (RATA) GRANTED TO PUBLIC
OFFICERS AND EMPLOYEES UNDER THE GENERAL
APPROPRIATIONS ACT AND THE PERSONNEL
ECONOMIC RELIEF ALLOWANCE (PERA) WHICH
ESSENTIALLY CONSTITUTE REIMBURSEMENT FOR
EXPENSES INCURRED IN THE PERFORMANCE OF
GOVERNMENT PERSONNEL'S OFFICIAL DUTIES
SHALL NOT BE SUBJECT TO INCOME TAX AND
CONSEQUENTLY TO WITHHOLDING TAX. PROVIDED
FURTHER, THAT PURSUANT TO E.O. 219 WHICH
TOOK EFFECT ON JANUARY 1, 2000, ADDITIONAL
COMPENSATION ALLOWANCE (ACA) GIVEN TO
GOVERNMENT PERSONNEL SHALL NOT BE SUBJECT
TO WITHHOLDING TAX PENDING ITS FORMAL
INTEGRATION
INTO
THE
BASIC
PAY.
CONSEQUENTLY, AND EFFECTIVE FOR THE
TAXABLE YEAR 2000, ACA SHALL BE CLASSIFIED AS
PART OF THE "OTHER BENEFITS" UNDER SECTION

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32(B)(7)(e) OF THE CODE WHICH ARE EXCLUDED


FROM GROSS COMPENSATION INCOME PROVIDED
THE TOTAL AMOUNT OF SUCH BENEFITS DOES NOT
EXCEED P30,000.00.
ADETca

"(b)

Any amount paid specifically, either as advances or


reimbursements for traveling, representation and other bona fide
ordinary and necessary expenses incurred or reasonably expected
to be incurred by the employee in the performance of his duties
are not compensation subject to withholding, if the following
conditions are satisfied:
"(i)

It is for ordinary and necessary traveling and


representation or entertainment expenses paid or incurred
by the employee in the pursuit of the trade, business or
profession; and

"(ii)

The employee is required to account/liquidate for the


foregoing expenses in accordance with the specific
requirements of substantiation for each category of
expenses pursuant to Sec. 34 of the Code. The excess of
actual expenses over advances made shall constitute
taxable income if such amount is not returned to the
employer.
Reasonable
amounts
of
reimbursements/advances for traveling and entertainment
expenses which are pre-computed on a daily basis and are
paid to an employee while he is on an assignment or duty
need not be subject to the requirements of substantiation
and to withholding."
"xxx

xxx

xxx

See earlier provision under Section 2, Revenue Regulations No. 6-82,


and subsequent amendments made by Revenue Regulations Nos. 9-83 and
12-86.
See earlier issuances on compensation income Revenue
Memorandum Circular No. 28-82; Revenue Memorandum Circular No.
1-83; Revenue Memorandum Circular No. 16-83; Revenue Memorandum
Circular No. 15-87; Revenue Memorandum Circular No. 23-2001;
Revenue Memorandum Order No. 36-84; and Revenue Audit
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Memorandum Order No. 1-87.


93

Special Treatment of Fringe Benefit. See Revenue Regulations No. 3-98 and
subsequent amendments thereto.

94

See amendment made by Section 2, Revenue Regulations No. 8-2000.

95

See also Executive Order No. 291 entitled "Monetization of Leave Credits of
Government Officials and Employees" (effective September 27, 2000); and
Revenue Memorandum Circular No. 16-2000.

95-a As added by Section 1, Revenue Regulations No. 1-2015.


96

See Executive Order No. 291 and Revenue Memorandum Circular No.
16-2000.

97

See issuances on RATA and PERA Revenue Memorandum Circular No.


60-91; Revenue Memorandum Circular No. 68-91; Revenue Memorandum
Circular No. 15-92; Revenue Memorandum Circular No. 46-92; and
Revenue Memorandum Circular No. 1-95.

97-a Entitled "Grant Of Salary Adjustment To All Government Personnel"


(effective January 1, 2000).
98

Deductions from gross income.

99

See amendment made by Section 1, Revenue Regulations No. 10-2000.

100

See amendment made by Section 1, Revenue Regulations No. 10-2000.


See also EO 291; and Revenue Memorandum Circular No. 16-2000.
See further X,B,4,4.3.2,d,d.1, Revenue Audit Memorandum Order No.
1-2000 (dated March 17, 2000) Re: Updated Handbook on Audit Procedures
and Techniques Volume I (Revision - Year 2000); Revenue Memorandum
Circular No. 76-89 (dated December 8, 1989) Re: Publishing the Resolution
of the Supreme Court in the case of Commissioner of Internal Revenue vs.
Oscar R. Victoriano and the Court of Tax Appeals re: taxability of terminal
leave pay of retiring official/employee in the government service; Revenue
Memorandum Circular No. 83-91 (dated November 12, 1991) Re: Publishing
the Resolution of the Supreme Court in the case of "Commissioner of Internal

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125

Revenue vs. The Court of Appeals and Efren P. Castaeda", G.R. No. 96016
promulgated October 17, 1991, re: non-taxability of terminal leave pay
received by officials/employees retiring from the government service; Revenue
Memorandum Circular No. 3-2001 (dated January 13, 2001) Re: Delegation
of Authority to Regional Directors to Issue Certain Rulings with Established
Precedents; Revenue Memorandum Circular No. 14-2001 (dated March 12,
2001) Re: Lists of Requirements from Taxpayers for Issuance of Certain
Rulings with Established Precedents Delegated to Regional Directors and to
the Assistant Commissioner, Legal Service under RMC Nos. 2-2001, 3-2001
and 10-2001; Revenue Memorandum Circular No. 17-2001 (dated March
20, 2001) Re: Adoption of Fiscal Discipline Measures in the Public Sector for
FY 2001; and Revenue Memorandum Order No. 75-99 (dated September 9,
1999) Re: Delegation of Authority to Regional Directors to Issue Certain
Rulings with Established Precedents.
Section 2.78.1 (B) - Withholding of Income Tax on Compensation Income
101

As last amended by Section 2, Revenue Regulations No. 10-2008.


Original text:
SECTION 2.78.1.
Income.
xxx

Withholding of Income Tax on Compensation

xxx

xxx

(B) Exemptions from withholding tax on compensation. The


following income payments are exempted from the requirement of withholding
tax on compensation:
(1)
(a)

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Remunerations received as an incident of employment, as follows:


Retirement benefits received under Republic Act under 7641 and
those received by officials and employees of private firms,
whether individual or corporate, under a reasonable private
benefit plan maintained by the employer which meet the
following requirements:
(i)

The plan must be reasonable;

(ii)

The benefit plan must be approved by the Bureau;

(iii)

The retiring official or employee must have been in the

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service of the same employer for at least ten (10) years


and is not less than fifty (50) years of age at the time of
retirement; and
(iv)

(b)

The retiring official or employee should not have


previously availed of the privilege under the retirement
benefit plan of the same or another employer.

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.
The phrase "for any cause beyond the control of the said
official or employee" connotes involuntariness on the part of the
official or employee. The separation from the service of the
official or employee must not be asked for or initiated by him.
The separation was not of his own making. Whether or not the
separation is beyond the control of the official or employee,
being essentially a question of fact, shall be determined on the
basis of prevailing facts and circumstances. It shall be duly
established by the employer by competent evidence which should
be attached to the monthly return for the period in which the
amount paid due to the involuntary separation was made.
Amounts received by reason of involuntary separation
remain exempt from income tax even if the official or the
employee, at the time of separation, had rendered less than ten
(10) years of service and/or is below fifty (50) years of age.
Any payment made by an employer to an employee on
account of dismissal, constitutes compensation regardless of
whether the employer is legally bound by contract, statute, or
otherwise, to make such payment.

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(c)

Social security benefits, retirement gratuities, pensions and other


similar benefits received by residents or non-resident citizens of
the Philippines or aliens who come to reside permanently in the
Philippines from foreign government agencies and other
institutions private or public;

(d)

Payments of benefits due or to become due to any person residing

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127

in the Philippines under the law of the United States


administered by the United States Veterans Administration;
(e)

Payments of benefits made under the Social Security System Act


of 1954 as amended; and

(f)

Benefits received from the GSIS Act of 1937, as amended , and


the retirement gratuity received by government officials and
employees.

(2)

Remuneration paid for agricultural labor

(a)

Remuneration for services which constitute agricultural labor and


paid entirely in products of the farm where the labor is performed
is not subject to withholding. In general, however, the term,
"agricultural labor" does not include services performed in
connection with forestry, lumbering or landscaping.

(b)

Remuneration paid entirely in products of the farm where the


labor is performed by an employee of any person in connection
with any of the following activities is excepted as remuneration
for agricultural labor:

(c)

(i)

The cultivation of soil;

(ii)

The raising, shearing, feeding, caring for, training, or


management of livestock, bees, poultry, or wildlife; or

(iii)

The raising or harvesting of any other agricultural or


horticultural commodity. The term "farm" as used in this
subsection includes, but is not limited to stock, dairy,
poultry, fruits and truck farms, plantations, ranches,
nurseries ranges, orchards, and such greenhouse and other
similar structures as are used primarily for the raising of
agricultural or horticultural commodities.

The remuneration paid entirely in products of the farm where


labor is performed for the following services in the employ of the
owner or tenant or other operator of one or more farms is not
considered as remuneration for agricultural labor, provided the
major part of such services is performed on a farm:
(i)

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Services performed in connection with the operation,


management, conservation, improvement, or maintenance

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of any such farms or its tools or equipments; or


(ii)

Services performed in salvaging timber, or clearing land


brush and other debris left by a hurricane or typhoon.

The services described in (i) above may include for


example, services performed by carpenters, painters, mechanics,
farm supervisors, irrigation engineers, bookkeepers, and other
skilled or semi-skilled workers, which contribute in any way to
the conduct of the farm or farms, as such, operated by the person
employing them, as distinguished from any other enterprise in
which such person may be engaged. Since the services described
in this paragraph must be performed in the employ of the owner
or tenant or other operator of the farm, the exception does not
extend to remuneration paid for services performed by employees
of a commercial painting concern, for example, which contracts
with a farmer to renovate his farm properties.
(d)

(e)

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Remuneration paid entirely in products of the farm where labor is


performed by an employee in the employ of any person in
connection with any of the following operations is not considered
as remuneration for agricultural labor without regard to the place
where such services are performed:
(i)

The making of copra, stripping of abaca, etc.;

(ii)

The hatching of poultry;

(ii)

The raising of fish;

(iv)

The operation or maintenance of ditches, canals,


reservoirs, or waterways used exclusively for supplying or
storing water for farming purposes; and

(v)

The production or harvesting of crude gum from a living


tree or the processing of such crude gum into gum spirits
or turpentine and gum resin, provided such processing is
carried on by the original producer of such crude gum.

Remuneration paid entirely in products of the farm where labor is


performed by an employee in the employ of a farmer or a
farmer's cooperative, organization or group in the handling,
planting, drying, packing, packaging, processing, freezing,

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grading, storing or delivering to storage or to market or to carrier


for transportation to market, of any agricultural or horticultural
commodity, produced by such farmer or farmer-members of such
organization or group, is excepted as remuneration for
agricultural labor. Services performed by employees of such
farmer or farmer's organization or group in handling, planting,
drying, packaging, processing, freezing, grading, storing, or
delivering to storage or to market or to carrier for transportation
to market of commodities produced by persons other than such
farmer or members of such farmer's organization or group are not
performed "as an incident to ordinary farming operation".
All payments made in cash or other forms other than products of
the farm where labor is performed, for services constituting
agricultural labor as explained above, are not within the
exception.
(3) Remuneration for domestic services. Remuneration paid for
services of a household nature performed by an employee in or about the private
home of the person by whom he is employed is not subject to withholding.
However, the services of household personnel furnished to an employee (except
rank and file employees) by an employer shall be subject to the fringe benefits
tax pursuant to Sec. 33 of the Code, as amended.
A private home is the fixed place of abode of an individual or family. If
the home is utilized primarily for the purpose of supplying board or lodging to
the public as a business enterprise, it ceases to be a private home and
remuneration paid for services performed therein is not exempted.
In general, services of a household nature in or about a private home
include services rendered by cooks, maids, butlers, valets, laundresses,
gardeners, chauffeurs of automobiles for family use.
The remuneration paid for the services above enumerated which are
performed in or about rooming or lodging houses, boarding houses, clubs,
hotels, hospitals or commercial offices or establishments is considered as
compensation;
Remuneration paid for services performed as a private secretary, even if
they are performed in the employer's home is considered as compensation;
(4) Remuneration for casual labor not in the course of an employer's
trade or business. The term "casual labor" includes labor which is occasional,
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incidental or regular. The expression "not in the course of the employer's trade
or business" includes labor that does not promote or advance the trade or
business of the employer.
Thus, any remuneration paid for labor which is occasional, incidental or
irregular, and does not promote or advance the employer's trade or business, is
not considered as compensation.
EXAMPLE: A's business is that of operating a sawmill. He employs B, a
carpenter, at an hourly wage to repair his home. B's work is irregular and he
spends, the greater part of two days in completing the work. Since B's labor is
casual and is not in the course of A's business, the remuneration paid for such
services is exempted.
Any remuneration paid for casual labor, that is, labor which is
occasional, incidental or irregular, but which is rendered in the course of the
employer's trade or business, is considered as compensation.
EXAMPLE: E is engaged in the business of operating a department
store. He employs additional clerks for a short period. While the services of the
clerks may be casual, they are rendered in the course of the employer's trade or
business and therefore the remuneration paid for such services is considered as
compensation.
Any remuneration paid for casual labor performed for a corporation is
considered as compensation;
(5) Compensation for services by a citizen or resident of the
Philippines for a foreign government or an international organization.
Remuneration paid for services performed as an employee of a foreign
government or an international organization is exempted. The exemption
includes not only remuneration paid for services performed by ambassadors,
ministers and other diplomatic officers and employees but also remuneration
paid for services performed as consular or other officer or employee of a foreign
government or as a non-diplomatic representative of such government.
(6) Damages. Actual, moral, exemplary and nominal damages
received by an employee or his heirs pursuant to a final judgment or
compromise agreement arising out of or related to an employer-employee
relationship.
(7) Life Insurance. The proceeds of life insurance policies paid to
the heirs or beneficiaries upon the death of the insured, whether in a single sum
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or otherwise, provided however, that interest payments agreed under the policy
for the amounts which are held by the insured under such an agreement shall be
included in the gross income.
(8) Amount received by the insured as a return of premium. The
amount received by the insured, as a return of premium or premiums paid by
him under life insurance, endowment, or annuity contracts either during the term
or at the maturity of the term mentioned in the contract or upon surrender of the
contract.
(9) Compensation for injuries or sickness. Amounts received
through Accident or Health Insurance or under Workmen's Compensation Acts,
as compensation for personal injuries or sickness, plus the amount of any
damages received whether by suit or agreement on account of such injuries or
sickness.
(10) Income exempt under treaty. Income of any kind to the extent
required by any treaty obligation binding upon the Government of the
Philippines.
(11) Thirteenth (13th ) month pay and other benefits.
(a) Thirteenth (13th) month pay equivalent to the mandatory one (1)
month basic salary of officials and employees of the government, (whether
national or local), including government-owned or controlled corporations, and
or private offices received after the twelfth (12th) month pay; and
(b) Other benefits such as Christmas bonus, productivity incentive
bonus, loyalty award, gifts in cash or in kind and other benefits of similar nature
actually received by officials and employees of both government and private
offices.
The above stated exclusions (a) and (b) shall cover benefits paid or
accrued during the year provided that the total amount shall not exceed thirty
thousand pesos (P30,000.00) which may be increased through rules and
regulations issued by the Secretary of Finance, upon recommendation of the
Commissioner, after considering, among others, the effect on the same of the
inflation rate at the end of the taxable year.
(12) GSIS, SSS, Medicare and other contributions. GSIS, SSS,
Medicare and Pag-Ibig contributions, and union dues of individual employees.

As amended by Section 1, Revenue Regulations No. 1-2006:


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"SECTION 2.78.1.
Income.
xxx

Withholding of Income Tax on Compensation

xxx

xxx

"(B) Exemptions from withholding tax on compensation. The


following income payments are exempted from the requirement of
withholding tax on compensation:
xxx

xxx

xxx

"(13)
COMPENSATION INCOME OF INDIVIDUALS
THAT DO NOT EXCEED THE STATUTORY MINIMUM WAGE OR
FIVE THOUSAND PESOS (PHP5,000.00) PER MONTH (SIXTY
THOUSAND PESOS [PHP60,000.00] A YEAR), WHICHEVER IS
HIGHER."
"(14)
COMPENSATION INCOME OF EMPLOYEES OF
THE GOVERNMENT OF THE PHILIPPINES, OR ANY OF ITS
POLITICAL
SUBDIVISIONS,
AGENCIES
OR
INSTRUMENTALITIES, WITH SALARY GRADES 1 TO 3."

As amended by Section 1, Revenue Regulations No. 8-2000:


"Sec. 2.78.1. Withholding of Income Tax on Compensation Income.
"xxx

xxx

xxx

"(B) Exemptions from withholding tax on compensation. The following


income payments are exempted from the requirement of withholding tax on
compensation:
"xxx
"(11)

xxx

xxx

Thirteenth (13th) month pay and other benefits.

"(a) . . .
"(b) Other benefits such as Christmas bonus, productivity incentives,
loyalty award, gift in cash or in kind and other benefits of similar nature actually
received by officials and employees of both government and private offices,
INCLUDING THE ADDITIONAL COMPENSATION ALLOWANCE
("ACA") GRANTED AND PAID TO ALL OFFICIALS AND
EMPLOYEES OF THE NATIONAL GOVERNMENT AGENCIES
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(NGAs) INCLUDING STATE UNIVERSITIES AND COLLEGES (SUCs),


GOVERNMENT-OWNED AND/OR CONTROLLED CORPORATIONS
(GOCCs), GOVERNMENT FINANCIAL INSTITUTIONS (GFIs) AND
LOCAL GOVERNMENT UNITS (LGUs)
"The above stated exclusions (a) and (b) shall cover benefits paid or
accrued during the year provided that total amount shall not exceed thirty
thousand pesos (P30,000.00) which may be increased through rules and
regulations issued by the Secretary of Finance, upon recommendation of the
Commissioner, after considering, among others, the effect on the same of the
inflation rate at the end of the taxable year."
"(12)

...

"(13)
FACILITIES AND PRIVILEGES OF RELATIVELY
SMALL VALUE OR 'DE MINIMIS' BENEFITS AS DEFINED UNDER
THESE REGULATIONS."

See Section 32(B), NIRC of 1997.


See also earlier provision under Section 3, Revenue Regulations No.
6-82 and subsequent amendment made by Revenue Regulations No. 12-86.
102

Entitled "An Act Amending Article 287 of Presidential Decree No. 442, as
amended, Otherwise Known as the Labor Code of the Philippines, by
Providing for Retirement Pay to Qualified Private Sector Employees in the
Absence of Any Retirement Plan in the Establishment" (effective December 9,
1992).
See issuances on private retirement benefit plan Revenue Regulations
No. 1-83; Revenue Regulations No. 11-2001; Revenue Memorandum
Circular No. 10-83; and Revenue Memorandum Order No. 9-93.

103

Republic Act No. 1161, as amended, entitled "An Act to Create a Social
Security System Providing Sickness, Unemployment, Retirement, Disability
and Death Benefits for Employees" (effective June 18, 1954).
See now Republic Act No. 8282 entitled "An Act Further Strengthening
The Social Security System Thereby Amending For This Purpose Republic Act
No. 1161, As Amended, Otherwise Known As The Social Security Law"
(approved May 1, 1997).

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104

CA 186, as amended, entitled "An Act to Create and Establish a 'Government


Service Insurance System' to Provide for its Administration, and to Appropriate
the Necessary Funds Therefor" (dated November 14, 1936).
See now Republic Act No. 8291 entitled "An Act Amending Presidential
Decree No. 1146, As Amended, Expanding And Increasing The Coverage And
Benefits Of The Government Service Insurance System, Instituting Reforms
Therein And For Other Purposes" (approved May 30, 1997).

105

Special Treatment of Fringe Benefit. See Section 2.33(B)(4), Revenue


Regulations No. 3-98 and subsequent amendments made by Revenue
Regulations Nos. 8-2000 and 10-2000.

106

Amends Revenue Regulations No. 2-95 (dated January 3, 1995) Re:


Implementing Republic Act No. 7833, An Act to Exclude the Benefits
Mandated Pursuant to Republic Act No. 6686 and Presidential Decree No. 851,
as Amended, and other Benefits from the Computation of Gross Compensation
Income for the Purposes of Determining Taxable Compensation Income,
Amending for the Purpose Section 28 (b) (8) of the National Internal Revenue
Code, as Amended.
See Revenue Memorandum Circular No. 36-94 (dated December 14,
1994) Re: Publishing the full text of Republic Act No. 7833 an Act
excluding the benefits mandated pursuant to Republic Act No. 6686 and
Presidential Decree No. 851, as amended, and other benefits from the
computation of gross compensation income for purposes of determining
taxable compensation income, amending for the purpose Section 28 (b) (8) of
the National Internal Revenue Code, as amended.

107

See amendment made by Section 2, Revenue Regulations No. 8-2000.

108

Revenue Regulations No. 8-2000 inserted the provision "(13) facilities and
privileges of relatively small value or 'de minimis' benefits as defined under
these regulations" which was amended by Section 1, Revenue Regulations
No. 10-2008.
Revenue Regulations No. 10-2008 also inserted provision "(14)
Compensation income of employees in the public sector with compensation
income of not more than the SMW in the non-agricultural sector, as fixed by

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RTWPB/NWPC, applicable to the place where he/she is assigned."


109

As amended by Section 2, Revenue Regulations No. 10-2008.

Section 2.78.2 - Payroll Period


110

See earlier provision under Section 4, Revenue Regulations No. 6-82 and
subsequent amendments thereto.

Section 2.78.3 - Employee


111

See earlier provision under Section 5, Revenue Regulations No. 6-82 and
subsequent amendments thereto.

Section 2.78.4 - Employer


112

See earlier provision under Section 6, Revenue Regulations No. 6-82 and
subsequent amendments thereto.

Section 2.78.4 (B) - Employer; Person Paying Compensation on behalf of a Non-resident


113

See EO 651; and issuances designating personnel of government offices as


withholding agents Revenue Regulations No. 1-87, and subsequent
amendments made by Revenue Regulations No. 6-96 and Revenue
Regulations No. 10-97; Revenue Memorandum Circular No. 40-2001;
Revenue Memorandum Order No. 14-98, and subsequent amendment made
by Revenue Memorandum Order No. 70-98.

Section 2.78.4 (C) - Employer; Compensation Paid on behalf of Two or More Employers
114

See earlier provision under Section 11, Revenue Regulations No. 6-82 and
subsequent amendments thereto.

Section 2.78.5 - Computation of Wages


115

Inserted by Section 2, Revenue Regulations No. 10-2008.

Section 2.79 (A) - Income Tax Collected at Source on Compensation Income;


Requirement of Withholding
116

As amended by Section 3, Revenue Regulations No. 10-2008.


Original text:
Section 2.79.
Income.

Income Tax Collected at Source on Compensation

(A) Requirement of Withholding. Every employer must withhold


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from compensations paid, an amount computed in accordance with these


regulations. Provided, that no withholding of tax shall be required where the
total compensation income of an individual does not exceed the statutory
minimum wage or five thousand pesos (P5,000.00) monthly (sixty thousand
pesos (P60,000.00) a year), whichever is higher.
Employees whose total annual compensation, as determined in the
preceding paragraph, does not exceed P60,000.00 shall be given two options
with which to pay his income tax due to wit:
(1)

His compensation income shall be subjected to withholding tax,


but he shall not be required to file the income tax return
prescribed in Sec. 51 of the Code (filing of an individual return)
except when covered by any of the situations enumerated in Sec.
2.83.4 of these Regulations.

(2)

His compensation income shall not be subject to a withholding


tax but he shall file his annual income tax return and pay the tax
due thereon, annually.

Where the employee has opted to have his compensation income


subjected to withholding so as to be relieved of the obligation of filing an annual
income tax return and paying his tax due on a lump sum basis, he shall execute a
waiver in a prescribed BIR form of his exemption from withholding which shall
constitute the authority for the employer to apply the withholding tax table
provided under these Regulations.
The employee who opts to file the Income Tax Return shall file the same
not later than April 15 of the year immediately following the taxable year.
xxx

xxx

xxx

As amended by Section 2, Revenue Regulations No. 1-2006:


"SEC. 2.79.
Income.

Income Tax Collected at Source on Compensation

"(A) Requirement of Withholding. Every employer must withhold


from compensations paid, an amount computed in accordance with these
regulations. PROVIDED, THAT COMPENSATION INCOME OF (1)
INDIVIDUALS THAT DO NOT EXCEED THE STATUTORY
MINIMUM WAGE OR FIVE THOUSAND PESOS (PHP5,000.00) PER
MONTH (SIXTY THOUSAND PESOS [PHP60,000.00] A YEAR),
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WHICHEVER IS HIGHER, AND (2) EMPLOYEES OF THE


GOVERNMENT OF THE PHILIPPINES, OR ANY OF ITS
POLITICAL
SUBDIVISIONS,
AGENCIES
OR
INSTRUMENTALITIES, WITH SALARY GRADES 1 TO 3, SHALL
NOT BE SUBJECT TO WITHHOLDING TAX.
"THE
AFOREMENTIONED
INDIVIDUALS
WHOSE
COMPENSATION INCOME IS NOT SUBJECT TO WITHHOLDING
TAX SHALL REMAIN LIABLE FOR INCOME TAXES AND SHALL
CONTINUE TO FILE THEIR ANNUAL INCOME TAX RETURNS
AND PAY THE INCOME TAXES DUE THEREON, IF ANY, NOT
LATER THAN APRIL 15 OF THE YEAR IMMEDIATELY
FOLLOWING THE TAXABLE YEAR.
xxx

xxx

xxx

Section 2.79 (B) - Income Tax Collected at Source on Compensation Income;


Computation of Withholding Tax on Compensation Income in General
117

As amended by Section 3, Revenue Regulations No. 10-2008.


Original text:
Section 2.79.
Income.

Income Tax Collected at Source on Compensation

xxx

xxx

xxx

(B) Computation of Withholding Tax on Compensation Income in


General. The procedures provided herein below shall govern the
computation of withholding tax on the taxable compensation income of the
employees. Provided, however, that taxable fringe benefits received by
employees other than the rank and file, as defined in the Labor Code of the
Philippines, as amended, shall be subject to a Fringe Benefits Tax, instead of the
rates prescribed in the Withholding Tax Tables pursuant to Sec. 24(A) of the
Code, as amended (refer to Sec. 2.79.D of these Regulations).
(1) Use of Withholding Tax Tables. In general, every employer
making payment of compensation shall deduct and withhold from such
compensation a tax determined in accordance with the prescribed new
withholding tax tables effective January 1, 1998 (Annex A) of these
Regulations.
There are four (4) withholding tables prescribed in these regulations, as
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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 the


semi-monthly payroll period;

(c)

Weekly Tax Table to be used by employers using the weekly


payroll period;

(d)

Daily Tax Table to be used by employers using the daily


payroll period.

If the compensation is paid other than daily, weekly, semi-monthly or


monthly, the tax to be withheld shall be computed as follows:
(a)

Annually use the annualized computation referred to in Sec.


2.79 (B)(5)(b) of these Regulations;

(b)

Quarterly and semi-annually divide the compensation by three


(3) or six (6), respectively, to determine the average monthly
compensation. Use the monthly withholding tax table to compute
the tax, and the tax so computed shall be multiplied by three (3)
or six (6) accordingly.

(2)
(a)

Components of the Withholding Tax Table.


Each tax table is grouped into Tables A, B and C.

A Table for employees without dependent children


B Table for heads of family with dependent children
C Table for married employees with qualified dependent children
b)

The columns in the Tables reflect the following:

1st column reflects the exemption status of employee represented by


letter symbols. (refer to the explanation of the legend of symbols in letter
(d) below)
2nd column reflects the total amount of personal and additional
exemption, in pesos, to which an employee is entitled.
(c)
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Column numbers 1 to 10 reflect the portion of the amount of

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taxes to be withheld on the amount of compensation of the


employees. Every amount in all the columns within Tables A, B
and C represent the compensation level.
(d)

Legend of symbols The symbols used in the new withholding


tax table represent the following:

Z Zero exemption for (a) employee with multiple


employers simultaneously, with respect to second, third, etc.,
employer and (b) for employee who fails to file an application
for registration (BIR Form 1902) or an exemption certificate;
(BIR Form 2305)
S Single, legally separated spouses/widow/widower
without any qualified dependent;
Cdpr

ME Married employee who is not legally separated;


[HF Head of the family who is either single/legally
separated spouse/widow or widower with a qualified dependent
parent; sister or brother; legitimate, recognized natural or
legally adopted child; or a qualified senior citizen as defined by
these regulations pursuant to Sec. 2 of R.A. No. 7432(3).
[In view however, of the promulgation of the Family Code which makes
no distinction between the spurious and natural child, an illegitimate child can
now be considered as a qualified dependent and qualifies the claimant to the
status of head of the family.]
The numerals (1-4) affixed to the status symbols "ME" and HF"
represent the number of qualified legitimate, illegitimate, or legally adopted
children;
Exemption means the amount of exemption in thousand pesos an
employee is entitled to claim as a deduction from gross compensation income in
accordance with the status and number of qualified dependent children.
(3)

Steps to determine the amount of tax to be withheld:

Step 1.
Use the appropriate tables for the payroll period; monthly
semi-monthly weekly or daily as the case may be.
Step 2.
Determine the total monetary and non-monetary
compensation paid to an employee for the payroll period, segregating gross
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benefits which includes thirteenth (13th) month pay, productivity incentives,


Christmas bonus, and other benefits received by the employee per payroll
period. Gross benefits which are received by officials and employees of public
and private entities in the amount of thirty thousand pesos (P30,000) or less
shall be exempted from income tax and from withholding tax.
Step 3.
Segregate the taxable compensation from the non-taxable
income paid to the employee for the payroll period. The taxable income refers to
all remuneration paid to an employee not otherwise exempted by law from
income tax and consequently from withholding tax. The non-taxable income are
those which are specifically exempted from income tax by the Code or by other
special laws as listed in Sec. 2.78.1 (B) of these Regulations (e.g. benefits not
exceeding P30,000, non-taxable retirement benefits and separation pay).
Step 4.
Segregate the taxable compensation income as determined
in Step 3 into regular taxable compensation income and supplementary
compensation income. Regular compensation includes basic salary, fixed
allowances for representation, transportation and other allowances paid to an
employee per payroll period. Supplementary compensation includes payments to
an employee in addition to the regular compensation such as commission,
overtime pay, taxable retirement pay, taxable bonus and other taxable benefits,
with or without regard to a payroll period.
Step 5.

Fix the compensation level as follows:

(i)

Determine the line (horizontal) corresponding to the status and


number of qualified dependent children using the appropriate
symbol for the taxpayer status.

(ii)

Determine the column to be used by taking into account only the


total amount of taxable regular compensation income. The
compensation level is the amount indicated in the line and
column to which the regular compensation income is equal to or
in excess, but not to exceed the amount in the next column of the
same line.

Step 6.
Compute the withholding tax due by adding the tax
predetermined in the compensation level indicated at the top of the column, to
the tax on the excess of the total regular and supplementary compensation over
the compensation level, which is computed by multiplying the excess by the rate
also indicated at the top of the same column.
cdrep

(4)
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Sample Computations on the use of the Withholding Tax Table:

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EXAMPLE I: Mr. A, single, with no qualified dependent receives


P6,000 as regular monthly compensation.
COMPUTATION: Using the monthly withholding tax table, the monthly
withholding tax is computed by referring to Table A line 2 of column 4 which
shows a tax of P208.33 on P4,167.00 plus 15% of the excess (P6,000.00 4,167.00 = P1,833.00)
Total taxable compensation
Less: compensation level
(line A-2 Column 4)

P 6,000.00

Tax on P4,167.00
Tax on excess (P1,833.00 x 15%)
Monthly withholding tax

4,167.00

P 1,833.00

P 208.33
274.95

P 483.28

EXAMPLE II: Mr. B, head of the family (with a qualified dependent


parent) receives P6,200.00 as monthly regular compensation and P800.00 as
supplementary compensation for January or a total of P7,000.00.
COMPUTATION: Using the monthly withholding tax table, the
withholding tax for January is computed by referring to Table A line 3 HF of
column 4 (fix compensation level taking into account only the regular
compensation income of P6,200.000) which shows a tax of P208.33 on
P4,583.00 plus 15% of the excess (P7,000.00 - 4,583.00 = P2,417.00).
Total taxable compensation
Less: compensation level
(line A-3 Column 4)

P 7,000.00

Excess
Tax on (P4,583.00)
Tax on excess (P2,417.00 x 1 5%)
Withholding tax for January

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P 2,417.00

P 208.33
362.55

P 570.88

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EXAMPLE III: Mrs. C, married with two (2) qualified dependent


children receives P5,500.00 as regular monthly compensation. Mr. C, her
husband is also employed and claims for the additional exemptions.
COMPUTATION: Using the monthly withholding tax table, the
withholding tax due is computed by referring to table A line 4 ME of column 4
which shows a tax of P208.33 on P5,167.00 plus 15% of the excess (P5,500.00 P5,167.00 = P333.00).
Total taxable compensation
Less: compensation level
(Line A- 4 Column 4)

P 5,500.00
5,167.00

P 333.00

Excess
Tax on P5,167,00
Tax on excess (P333.00 x 15%)
Monthly withholding tax

P 208.33
49.95

P 258.28

EXAMPLE IV: Mr. D, married with two (2) qualified dependent


children receives P3,550.00 as regular semi-monthly compensation. Mrs. D, his
wife is also employed. Mr. D did not waive his right in favor of the wife to
claim for the additional exemptions.
COMPUTATION: Using the semi-monthly withholding tax tables, the
withholding tax due is computed by referring to Table C line 2 ME 2 of column
4 which shows a tax of P104.17 on P3,250.00 plus 15% of the excess
(P3,550.00 - 3,250.00 = P300.00)
Total taxable compensation
Less: compensation level (line C-2 Column 4)
Excess
Tax on P3,250.00
Tax on excess (P300.00 x 15%)
Semi-monthly withholding tax
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P3,550.00
3,250.00

P 300.00

P 104.17
45.00

P 149.17

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EXAMPLE V: Mr. E, married with two (2) qualified dependent children


receives P3,300.00 as regular semi-monthly compensation. Mrs. E, his wife is
not employed.
COMPUTATION: Using the semi-monthly withholding tax tables, the
withholding tax due is computed by referring to Table C line 2 ME2 of Column
4 which shows a tax of P104.17 on P3,250 plus 15% of the excess (3,300 3,250 = P50.00)
Total taxable compensation
P3,300.00
Less: compensation level (Line C-2 Column 4) 3,250.00

Excess
P 50.00

Tax on P3,250.00
P 104.17
Tax on excess (P50.00 x 15%)
7.50

Semi-monthly withholding
P 111.67

EXAMPLE VI: On June, 1998, Mr. F, single receives P30,000.00 as


regular monthly salary and half of his 13th month pay amounting to P15,000.00
plus other benefits such as productivity pay of P10,000.00 and loyalty pay of
P6,000.00. Compute the withholding tax of Mr. F for the month of June, 1998.

COMPUTATION:
Regular Wage
Gross Benefits:
13th month pay
Productivity
Loyalty pay

P30,000.00

P15,000
10,000
P6,000

Total Gross Benefits


P 31,000.00

Add Taxable Gross Benefits (P31,000 - 30,000 = P1,000)*


Total Taxable Compensation Income
Less Compensation level
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1,000.00

P31,000.00
22 500.00

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Excess
Tax on P22,500 (line A2, col. 7)
Tax on excess (P8,500.00 x 30%)
Withholding tax for the month of June

P 8,500.00

P 4,166.67
2,550.00

P 6,716.67

* gross benefit of P31,000 less the maximum total exemptions of the gross benefit of
P30,000
(5)

Use of Exceptional Computations

(a) Cumulative average method. If in respect of a particular


employee, the regular compensation is exempt from withholding because the
amount thereof is below the compensation level, but supplementary
compensation is paid during the calendar year; or the supplementary
compensation is equal to or more than the regular compensation to be paid; or
the employee was newly hired and had a previous employer/s within the
calendar year, other than the present employer doing this cumulative
computation, the present employer shall determine the tax to be deducted and
withheld in accordance with the cumulative average method provided
hereunder:
Step 1.
Add the amount of taxable regular and supplementary
compensation to be paid to an employee for the payroll period subject of
computation to the sum of the taxable regular and supplementary compensation
since the beginning of the current calendar year including the compensation paid
by the previous employers within the same calendar year, if any;
Step 2.
Divide the aggregate amount of compensation computed in
step 1 by the number of payroll period to which the amount relates;
Step 3.
Compute the tax to be deducted and withheld on the
cumulative average compensation determined in Step No. (2) in accordance
with the withholding tax table;
cdphil

Step 4.
Multiply the tax computed in Step No. (3) by the number of
payroll period to which it relates;
Step 5.
Determine the excess, if any, of the amount of tax
computed in Step No. (4) over the total amount of tax already deducted and
withheld from the beginning payroll period to the last payroll period, including
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that withheld by the previous employer/s within the calendar year, if any. The
excess, as computed, shall be deducted and withheld from the compensation to
be paid for the last payroll period of the current calendar year.
The cumulative average method, once applicable to a particular
employee at any time during the calendar year, shall be the same method to be
consistently used for the remaining payroll period/s of the same calendar year.
EXAMPLE VII: (Regular monthly compensation is exempt from
withholding but supplementary compensation is paid during the calendar year)
Mr. G, married with three (3) qualified dependent children whose spouse is
not employed received the following compensation:
Month

Regular
Compensation

Supplementary
Compensation

Total
Compensation

Jan.
Feb.
Mar.

P4,500.00
4,500.00
4,400.00

P1,750.00
1,750.00
1,500.00

P6,250.00
6,250.00
5,500.00

COMPUTATION:
1.

For Jan. - P6,250.00 + 0


For Feb. - P6,250.00 + 6,250.00
For Mar. - P6,250 + 6,250 + 5,500

=
=
=

P 6,250.00
P12,500.00
P18,000.00

2.

For Jan. - P6,250/1


For Feb. - P12,500/2
For Mar. - P18,000/3

=
=
=

P 6,250.00
P 6,250.00
P 6,000.00

3.

For January
Tax on P5,500.00 (Line C.3, Col. 3)
Tax on excess (P750.00 x 10%)
Tax on P6,250.00

For February
Tax on P5,500 (line C.3, col. 3)
Tax on excess (P750.00 x 10%)
Tax on P6,250
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41.67
75.00

P 116.67

41.67
75.00

P 116.67

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For March
Tax on P5,500 (line C.3, col. 3)
Tax on excess (P500.00 x 15%)

41.67
50.00

P 91.67

Tax on P6,000.00

4.

For Jan. - P116.67 x 1


For Feb. - P116.67 x 2
For Mar. - P91.67 x 3

=
=
=

P 116.67
P 233.34
P 275.01

5.

For Jan. - P116.67 - 0


For Feb. - P233.34 - 116.67
For Mar. - P275.01 - 233.34

=
=
=

P 116.67
P 116.67
P 41.67

EXAMPLE VIII: (Supplemental compensation is equal to or more than


the regular compensation) Mr. H, married with one (1) qualified dependent
and whose spouse is also employed received the following compensation. Mr. H
waived his right to claim for the additional exemptions in favor of his wife.
Month

Regular
Compensation

Supplementary
Compensation

Total
Compensation

Jan.
Feb.
Mar.

P3,000.00
3,000.00
3,000.00

P3,000.00
3,500.00
5,000.00

P6,000.00
6,500.00
8,000.00

COMPUTATION:

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1.

For Jan. - P6,000.00 + 0


For Feb. - P6,000.00 + 6,500.00
For Mar. - P8,000.00 + 6,000.00 + 6,500.00

=
=
=

P 6,000.00
P12,500.00
P20,500.00

2.

For Jan. - P6,000/1


For Feb. - P12,500/2
For Mar. - P20,500/3

=
=
=

P 6,000.00
P 6,250.00
P 6,833.33

3.

For January
Tax on P5,167.00 (line A4, col. 4)
Tax on excess (P833.00 x 15%)

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P 208.33
P 124.95
147


P 333.28

Tax on P6,000.00

For February
Tax on P5,167.00 (line A4, col. 4)
Tax on excess (P1,083.00 x 15%)

P 208.33
P 162.45

P 370.78

Tax on P6,250.00

For March
Tax on P5,167.00 (line A 4 col. 4)
Tax on excess (P1,666.33 x 15%)

P 208.33
P 249.95

P 458.28

Tax on P6,833.33

4.

For Jan. - P333.28 x 1


For Feb. - P370.78 x 2
For Mar. - P458.28 x 3

=
=
=

P 333.28
P 741.56
P 1,374.84

5.

For Jan. - P333.28 - 0


For Feb. - P741.56 - 333.28
For Mar. - P1,374.84 - 741.56

=
=
=

P 333.28
P 408.28
P 633.28

EXAMPLE IX: (Computation of monthly withholding tax for a new


employee with previous employer during the year) Ms. I, single was hired by
X Co. on July, 1998. Her total taxable income per month is P10,000.00. She was
previously employed by W Co. from January to June with a monthly taxable
income of P6,000.00. Per Form No. 2316 (Certificate of Income Tax Withheld
on Compensation) issued by the previous employer, which was presented by
Ms. I to her present employer, the total tax withheld is P2,899.68. In computing
for the tax withheld on the compensation of Ms. I starting the month of July, X
Co. shall use the cumulative average method, as follows:
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Month

Present
Compensation
Income

Total
Previous
Income

Total
Taxable
Income

JULY

10,000.00

36,000.00

46,000.00

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AUG

10,000.00

10,000.00

SEPT

10,000.00

10,000.00

OCT

10,000.00

10,000.00

NOV

10,000.00

10,000.00

DEC

10,000.00

60,000.00

10,000.00

96,000.00

36,000.00

COMPUTATION:
Step 1
For July 36,000 +10,000

46,000.00

For August 46,000 + 10,000

56,000.00

For September 46,000 + 10,000 + 10,000

66,000.00

For October 46,000 + 10,000 + 10,000 + 10,000

76,000.00

For November 46,000 + 10,000 + 10,000 + 10,000 + 10,000 =

86,000.00

Step 2
For July 46,000/7

6,571.43

For August 56,000/8

7,000.00

For September 66,000/9

7,333.33

For October 76,000/10

7,600.00

For November 86,000/11

7,818.18

=
=

P 208.33
360.66

Step 3
For July P6,571.43
Tax on P4,167
Tax on excess (2,404.43 x 15%)
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Copyright 2015

Tax on P6,571.43

For August P7,000.00


Tax on P4,167
Tax on excess (P2,833.00 x 15%)

=
=

Tax on P7,000

For September P7,333.33


Tax on P4,167
Tax on excess (P3,166.33 x 15%)

=
=

Tax on P7,333.33

For October P7,600.00


Tax on P7,500
Tax on excess (P100 x 20%)

=
=

Tax on P7,600

For November P7,818.18


Tax on P7,500
Tax on excess (P318.18 x 20%)

=
=

Tax on P7,818.18

P568.99

P208.33
424.95

P633.28

P208.33
474.95

P683.28

P708.33
20.00

P728.33

P708.33
63.64

P771.97

Step 4
For July
For August
For September
For October
For November

P568.99 X 7
P633.28 X 8
P683.28 X 9
P728.33 X 10
P771.97 X 11

=
=
=
=
=

P3,982.93
P5,066.24
P6,149.52
P7,283.30
P8,491.67

Step 5
For July
For August

P3,982.93 - 2,899.68
P5,066.24 - 3,982.93

=
=

P1,083.26
P1,083.31

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For Sept.
For October
For Nov.

P6,149.52 - 5,066.24
P7,283.30 - 6,149.52
P8,491.67 - 7,283.30

=
=
=

P1,083.28
P1,133.78
P1,208.37

(b) Annualized withholding tax method. (i) When the


employer-employee relationship is terminated before the end of the calendar
year; and (ii) 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:
Step 1.
Determine the taxable regular and supplementary
compensation paid to the employee for the entire calendar year. Refer to Steps 2
to 5 of Sec. 2.79 (B)(1)(b) of these Regulations, using as basis the compensation
received for the calendar year.
cdphil

Step 2.
If the employee has previous employment/s within the year,
add the amount of taxable regular and supplementary compensation paid to the
employee by the previous employer doing the annualized computation to the
taxable compensation income received from previous employer/s during the
calendar year:
(i)

When the employer-employee relationship is terminated before


December The taxable regular and supplementary
compensation income shall be the amount paid since the
beginning of the current calendar year to the termination of
employment.

(ii)

Year-end adjustment The taxable regular and supplementary


compensation income shall be the amount paid since the
beginning of the current calendar year to December.

(iii)

Taxable fringe benefits received by employees holding


managerial or supervisory positions shall be subject to a final
fringe benefit tax as prescribed in Section 2.79 (D) of these
Regulations. Hence, the same shall not form part of the taxable
supplementary compensation, of managers and supervisors,
subject to the withholding tax tables.

Step 3.
Deduct from the aggregate amount of compensation
computed in Step No. (2) the amount of the total personal and additional
exemptions of the employee.
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Step 4.
Deduct the amount of premium payments on Health and/or
Hospitalization Insurance of employees who have presented evidence that they
have paid during the taxable year premium payments (the deductible amount
shall not exceed P2,400 or P200 per month whichever is lower) and that their
family's total gross income does not exceed P250,000 for the calendar year. For
purposes of substantiating the claim of insurance expense, the policy contract
shall be presented to the employer together with the original official receipt of
the premium payment, in addition to the documents which will be prescribed by
the BIR in a separate regulation to determine the aggregate of his family income.
Total family income includes primary income and other income from
sources received by all members of the nuclear family, i.e. father, mother,
unmarried children living together as one household, or a single parent with
children. A single person living alone is considered as a nuclear family.
The spouse claiming the additional exemptions for the qualified
dependent children shall be the same spouse to claim the deductions for
premium payments.
Step 5.
Compute the amount of tax on the difference arrived at in
Step 4, in accordance with the schedule provided in Sec. 24 (A) of the Code, as
follows:
Over

not over
10,000
30,000
70,000
140,000
250,000
500,000

But Not
Over
10,000
30,000
70,000
140,000
250,000
500,000
over

Amount Rate

Of Excess
Over

5%
500+10%
10,000
2,500+15%
30,000
8,500+20%
70,000
22,500+25%
140,000
50,000+30%
250,000
125,000+34%
500,000
(33% in 1999)
(32% in 2000 and thereafter)

Step 6.
Determine the deficiency or excess, if any, of the tax
computed in Step 5 over the cumulative tax already deducted and withheld since
the beginning of the current calendar year. The deficiency tax (when the amount
of tax computed in Step 5 is greater than the amount of cumulative tax already
deducted and withheld or when no tax has been withheld from the beginning of
the calendar year) shall be deducted from the last payment of compensation for
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the calendar year. If the deficiency tax is more than the amount of last
compensation to be paid to an employee, the employer shall be liable to pay the
amount of tax which cannot be collected from the employee. The obligation of
the employee to the employer arising from the payment by the latter of the
amount of tax which cannot be collected from the compensation of the
employee is a matter of settlement between the employee and employer.
The excess tax (when the amount of cumulative tax already deducted
and withheld is greater than the tax computed in Step 5) shall be credited or
refunded to the employee not later than January 25 of the following year.
However, in case of termination of employment before December, the refund
shall be given to the employee at the payment of the last compensation during
the year. In return, the employer is entitled to deduct the amount refunded from
the remittable amount of taxes withheld from compensation income in the
current month in which the refund was made, and in the succeeding months
thereafter until the amount refunded by the employer is fully repaid.
EXAMPLE
X:
(Use
of
annualized
computation
when
employer-employee relationship was terminated before December) Mr. X,
head of the family with a qualified dependent brother receives P8,000 as
monthly regular compensation starting January 1, 1998. On June 1, 1998, he
filed his resignation effective June 30, 1998. The tax withheld from January to
May was P3,624.65.
COMPUTATION: (To be done before payment of the compensation for
June 1998):
Total compensation received from
January 1 to May 31, 1998
Add: Compensation to be received on June
Gross compensation Jan-June
Less: Personal Exemption
Net Taxable Compensation

Tax Due*
Less: Tax Withheld from Jan to May
To be refunded to Employee Mr. X

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P40,000.00
8,000.00

P48,000.00
25,000.00

P23,000.00

P1,800.00
3,624.00

(P1,824.65)

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* Tax on P10,000.00
Tax on excess (P13,000 x 10%)
Tax on P36,000

P 500.00
1,300.00

P 1,800.00

EXAMPLE XI. (Year-end adjustments computation) For taxable year


1998, Asian Mfg. has the following employees:
1.
Mr. K, married with 2 qualified dependent children who received
the following compensation for the year:
Basic Monthly Salary
Overtime Pay for November
Thirteenth Month pay
Other Benefits

P45,000
P 5,000
P45,000
P12,000

2.
Mr. L, married, whose wife is also employed, with two dependent
children. The second child was born in December. He received for the year, the
following:
Basic Monthly Salary
Thirteenth Month Pay
Other Benefits

3.

P6,500
P6,500
P6,000

Ms. M, single, who was hired in July received the following:

Basic Monthly Salary


P20,000
Thirteenth Month Pay
P20,000
Monthly Salary from Previous Employer (January-June) P 6,000

She paid for the year an annual premium on health and hospitalization
insurance amounting to P2,400.00.
4.
following:

Mrs. N, married, whose husband is also working received the

Basic Monthly Salary


Thirteenth Month Pay (50%)

P35,000
P17,500

She resigned effective, July 30, 1998

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COMPUTATION OF WITHHOLDING TAX FOR DECEMBER:


1.

Mr. K

Compensation
Basic Salary
Overtime (Nov.)
13th month pay
Other benefits
Totals

Received
for the year
P540,000
5,000
45,000
12,000

P602,000

Non-Taxable

30,000

P30,000

Less: Personal and additional exemptions


Net taxable compensation

Tax due*
Less: Tax w/held from previous months (Jan-Nov.)
Tax to be withheld for December

Taxable
P540,000
5,000
15,000
12,000

P572,000
48,000

P 524,000

P133,160.00
130,788.79

P 2,371.21

*
Tax Due is computed by using the rates prescribed in Sec. 24 (A), NIRC
(refer to schedule on page 43 of these regulations)

2.

Mr. L

Compensation
Basic Salary
13th month pay
Other benefits
Totals

Received
for the year
P 78,000
6,500
6,000

P90,500

Non-Taxable

P78,000.00
P6,500
6,000

P12,500

Less: Personal and additional exemptions


Net taxable compensation
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Taxable

P 78,000.00
48,000.00

P 30,000.00

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155


Tax due
Less: Tax withheld from previous month (Jan-Nov.)

P 2,500.00
2,291.63

P 208.37

Amount to be withheld for December

3.

Ms. M. Single Computation of withholding tax for December

Compensation from previous employer (Jan. to June)


Compensation from present employer (July to Dec)
Total Taxable Compensation (Jan. to Dec.)
Less: Personal and additional exemptions P20,000.00
Premium payments on health &
hospitalization insurance
2,400.00

Net Taxable Compensation


Tax Due
Less: Taxes withheld
*Previous employer
**Present employer

P2,899.68
15,591.98

Amount of taxes withheld for the month of December

P 36,000.00
120,000.00

P156,000.00

22,400.00

P133,600.00

P 21,220.00

18,491.66

P 2,728.34

*
Refer to Certificate of Income Tax Withheld on Compensation issued by
previous employer.
** Taxes withheld from July to December computed by the present employer
using the cumulative computation.

4.

Mrs. N married (computation of tax upon resignation):


Total compensation
Received for the year

Basic Salary
13th month pay
Other benefits
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P245,000
17,500
6,000

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Non-Taxable

Taxable
P245,000

P17,500
6,000
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156


P268,500

P23,000

P245,000

Less: Personal and additional exemptions

32,000

P213,000

Net taxable compensation income

Tax due (Jan. to July 30)


Less Tax withheld (Jan. to June)

P40,750.00
45,700.02

P(4,950.02)

Over withheld Tax to be Refunded in the month of July

The annualized computation done for each employee shall be reflected


by the employer at the alphabetical list attached to the Form No. 1604.
(3) If the compensation is paid other than daily, weekly, semi-monthly
or monthly, compute the tax to be deducted and withheld as follows:
a)

Annually refers to computation on annualized income;

b)

Quarterly and semi-annually divide the compensation by three


(3) or six (6), respectively, to determine the average monthly
compensation. Use the monthly withholding tax table to compute
the tax, and the tax so computed shall be multiplied by three (3)
or six (6), accordingly;
LLjur

c)

Bi-weekly divide the compensation by two (2) to determine


the average weekly compensation. Use the weekly withholding
tax table to compute the tax, and the tax so computed shall be
multiplied by two (2);

d)

Miscellaneous if compensation is paid irregularly, or for a


period other than those mentioned above, divide the
compensation by the number of days from last payment to date of
payment (excluding Sundays and holidays). Use the daily tax
table, the tax so computed shall be multiplied by the number of
days.
xxx

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xxx

xxx

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157

See earlier provision under Section 7, Revenue Regulations No. 6-82 and
subsequent amendments made by Revenue Regulations Nos. 6-83, 9-83, 2-85,
12-86, 1-92, 3-92 and 4-93.
118

See Section 33, NIRC of 1997; and Revenue Regulations No. 3-98 and
subsequent amendments made by Revenue Regulations Nos. 8-2000 and
10-2000.

119

See Revenue Memorandum Circular No. 5-98 and Revenue Memorandum


Circular No. 4-99.

120

See Revenue Regulations No. 3-98 and subsequent amendments made by


Revenue Regulations Nos. 8-2000 and 10-2000.

Section 2.79 (C) - Income Tax Collected at Source on Compensation Income;


Computation of Withholding Tax on Salaries and Benefits Received by Employees other
than Rank and File
121

See amendments made by Revenue Regulations Nos. 8-2000 and 10-2000 to


Section 2.78.1 of Revenue Regulations No. 2-98.

122

See Revenue Regulations No. 3-98 and subsequent amendments made by


Revenue Regulations Nos. 8-2000; 10-2000; Revenue Regulations No.
5-2008; Revenue Regulations No. 5-2011; and Revenue Regulations No.
8-2012.

Section 2.79 (D) - Income Tax Collected at Source on Compensation Income;


Computation of Withholding Tax on Fringe Benefit
123

See Revenue Regulations No. 3-98 and subsequent amendments made by


Revenue Regulations Nos. 8-2000 and 10-2000.
See also Revenue Memorandum Circular No. 5-98.

124

Special treatment of fringe benefit.

125

See Revenue Regulations No. 3-98 and subsequent amendments made by


Revenue Regulations Nos. 8-2000 and 10-2000.

126

See Revenue Memorandum Circular No. 5-98.

127

Tax on nonresident alien individual.

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128

See amendments made by Revenue Regulations Nos. 8-2000, 10-2000, and


5-2008.

Section 2.79 (F) - Requirement for Deductibility


129

As amended by Section 3, Revenue Regulations No. 10-2008:


Original text:
(F) Requirement for Deductibility. The provisions of Sec. 2.58.5 of
these Regulations shall apply.

Section 2.79 (H) - Income Tax Collected at Source on Compensation Income;


Nondeductibility of Tax and Credit for Tax Withheld
130

See Revenue Memorandum Order No. 17-99 and Revenue Memorandum


Order No. 52-99.

131

SECTION 49. Countersigning of Warrants or Checks by Auditors. No


warrant or check shall be paid by the Treasury of the Philippines, local
treasurer, or any government depository unless it is countersigned by a duly
authorized official of the Commission. When, in the opinion of the
Commission, the interest of the service so requires, the warrant or check may
be paid without the countersignature under such rules and regulations as it may
be prescribed from time to time.

132

Dated July 25, 1987.

Section 2.79 (I) - Income Tax Collected at Source on Compensation Income; Right to
Claim Withholding Exemptions
133

As amended by Section 3, Revenue Regulations No. 10-2008:


Original text:
(I) Right to Claim Withholding Exemptions. An employee
receiving compensation shall be entitled to withholding exemptions as provided
in the Code, as amended. In order to receive the benefit of such exemptions, the
employee must file the Application for Registration (BIR Form No. 1902), upon
employment and a Withholding Compensation and Exemption Certificate (Form
No. 2305), in case of updates on changes in his exemptions. The withholding
exemptions to which an employee is entitled depends upon his status as single,
married, head of the family and the number of dependents qualified for
additional exemptions. Each employee shall be allowed to claim the following

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amount of exemptions, with respect to compensation paid on or after January 1,


1998.
(1)

Personal and additional exemptions.

(a)

Basic personal exemptions.

(i)

For single individual or married individual judicially decreed as


legally separated with no qualified dependents, the amount of
personal exemption allowed is twenty thousand pesos
(P20,000.00);

(ii)

For each legally married employee, the amount of personal


exemption allowed is thirty two thousand pesos (P32,000.00). A
married individual deriving income within the Philippines whose
spouse is unemployed or is a non-resident citizen deriving
income from foreign sources, shall be entitled to a personal
exemption of thirty two thousand pesos (P32,000.00) only;

(iii)

For head of a family, the amount of personal exemption allowed


is twenty five thousand pesos (P25,000.00). Head of the family
means an unmarried or legally separated man or woman with one
or both parents or one or more brothers or sisters whether of the
whole or half blood or with one or more legitimate or
illegitimate, recognized natural or legally adopted children living
with and dependent upon him for their chief support, where such
brothers or sisters or children are not more than twenty one (21)
years of age, unmarried and not gainfully employed or where
such children, brothers, or sisters, regardless of age are incapable
of self-support because of mental or physical defect. The term
also includes an unmarried or legally separated man or woman
who is the benefactor of a qualified senior citizen.

A senior citizen is any resident citizen of the Philippines of at least sixty


(60) years old, including those who have retired from both government offices
and private enterprises, and has an income of not more than Sixty thousand
pesos (P60,000) per annum subject to the review of the National Economic
Development Authority (NEDA) every three years (definition taken from
Republic Act No. 7432).
(b) Additional exemptions for taxpayer with dependents. A married
individual or a head of family shall be allowed an additional exemption of eight
thousand pesos (P8,000) for each qualified dependent child, provided that the
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total number of dependents for which additional exemptions may be claimed


shall not exceed four (4) dependents. The additional exemptions for qualified
dependent children shall be claimed by only one of the spouses in the case of
married individuals.
A dependent means a legitimate, illegitimate or legally adopted child
chiefly dependent upon and living with the taxpayer if such dependent is not
more than twenty-one (21) years of age, unmarried and not gainfully employed
or if such dependent, regardless of age, is incapable of self-support because of
mental or physical defect.
The husband shall be the proper claimant of the additional exemption for
qualified dependent children unless he explicitly waives his right in favor of his
wife in the application for registration (BIR Form 1902) or in the withholding
exemption certificate (BIR Form 2305). Provided, however, that where the
spouse of the employee is unemployed or is a non-resident citizen deriving
income from foreign sources, the employed spouse within the Philippines shall
be automatically entitled to claim the additional exemptions for children.

See earlier provision under Section 8, Revenue Regulations No. 6-82 and
subsequent amendments made by Revenue Regulations Nos. 6-83, 2-85,
12-86, 1-92, 3-92 and 4-93.
Section 2.79.1 - Application for Registration for Individuals Earning Compensation
Income (BIR Form No. 1902)
134

As amended by Section 4, Revenue Regulations No. 10-2008:


Original text:
SECTION 2.79.1. Application for Registration for Individuals Earning
Compensation Income (BIR Form No. 1902). The application for registration
of employees shall be accomplished by both employer and employee relating to
the following information and other requirements:
(A) Employee.

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(1)

Name/Taxpayer's Identification Number (TIN)/Address of


employee/other information required by the form;

(2)

Status of employee whether SINGLE/legally separated/widow or


widower with no dependent child, married, or head of the family;

(3)

Status of spouse of the employee. If the employee is legally

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married, the Name/TIN, if any, of the spouse and whether said


spouse is employed, unemployed, employed abroad, or is
engaged in trade or business should be indicated on the
application;
(4)

Qualified dependents. Name and date of birth of qualified


dependent/s (children, parent/s, brother/s, sister/s or senior
citizens);

(5)

Claimant of exemption for children. The husband is the


proper claimant of additional exemptions for qualified children.
However, the wife shall claim full additional exemption for
children in the following cases:
(a)

(6)

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Husband is unemployed;

(b)

Husband is a non-resident citizen deriving income from


foreign sources;

(c)

The husband waives his right to claim the exemptions of


children (waiver should be for all children) in a sworn
statement to be attached to his application form for
registration (1902) and that of his wife's, in accordance
with the procedures prescribed in this Section;

Required forms and attachments. Upon filing the Application


for registration (BIR Form No. 1902), the taxpayer is required to
attach any of the following documents to establish the status of
the taxpayer, if applicable, to the application:

(a)

Marriage contract;

(b)

Court decision of legal separation;

(c)

Birth Certificate of each qualified dependent brother,


sister or child;

(d)

Certificate of employment of the husband if he is working


abroad;

(e)

Waiver of exemptions of children by the husband in case


wife is claiming the additional exemptions of the children;

(f)

Waiver from exemption on withholding tax of taxpayers

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whose total compensation income in a year does not exceed


P60,000.00.
(g)

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Medical Certificate of dependent brother, sister or child,


if physically or mentally incapacitated;

(h)

Court decision of legal adoption of children;

(i)

Death certificate;

(j)

Current certificate of income tax exemption of qualified


senior citizen;

(k)

Other documentary evidence, where the above documents


are not available.

(7)

Concurrent multiple employments. An employee who is


employed concurrently by two or more employers within the
same period of time during the taxable year shall file the
Application (BIR Form No. 1902) with his main employer
(employer paying the higher/est wage) and shall furnish a copy of
the duly received Application with his secondary employers (2nd,
3rd, etc. employers). The employed husband and wife shall each
file a separate application with their respective employers;

(8)

Successive multiple employment. An employee who


transferred to another employer during the taxable year, shall
furnish his new Employer with an Exemption Certificate (Form
No. 2305) indicating therein his previous employments during
the taxable year (name of employer/s, address/s, TIN/s and the
date/s of his separation) and attach to the said certificate, a copy
of the Certificate of Income Tax Withheld on Compensation
(BIR Form No. 2316) for the calendar year issued by previous
employer/s;

(9)

Mixed income. An individual receiving a combination of


compensation and business/professional income shall first deduct
the allowable personal and additional exemptions from
compensation income only the excess therefrom can be deducted,
from business or professional income. In the case of husband and
wife, the husband shall be the proper claimant of the exemptions
unless he waives it in favor of his wife.

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(B) Employer. The employer with whom the employee's


Application for Registration (Form No. 1902) is filed, must indicate the date of
receipt thereon and accomplish Part V of the said Application pertaining to
Employer's Information such as TIN, Employer's Registered Name, and other
relevant information.
(C) Procedures for the filing of the Application (Form No. 1902)
(1)

(2)

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All employers shall require their employees to accomplish in


duplicate the Application for Registration described above as
follows:
(a)

All employees who have not filed the Application for


Registration (BIR Form 1902), as of December 31, 1997,
shall accomplish and file the application with their
employers not later than April 30, 1998;

(b)

New employees shall accomplish and file the Application


within ten (10) days from the date of commencement of
employment;

(c)

In case of changes in the information data in the


Application (BIR Form 1902) previously submitted by
the employee, consisting of changes in personal and
additional exemptions, employment/working status of the
spouse of the employee, multiple employment status and
amount of compensation income, an Exemption
Certificate (BIR Form 2305) reflecting the changes,
together with the required documents/evidence of
changes must be submitted to the employer within ten
(10) days after such change. The employer shall then
make the necessary adjustments on the withholding tax of
the employee based on the new information;

The employer shall transmit both the original and duplicate


copies of the Application or Certificate (after accomplishing the
portion for Employer's information of either forms) to the
Revenue District Officer of the City or Municipality where the
employer has his legal residence or place of business within
thirty (30) days following its receipt from the employee. The
duplicate copy duly stamped received by the BIR shall be given
to the employee.

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(3)

The employer shall review the exemptions of the employees and


shall, in the computation of taxes required to be withheld on the
compensation of employees, apply the correct and applicable
exemptions as provided in these regulations.

(4)

In case the husband waives his right to claim the additional


exemptions of children in favor of his wife, he shall accomplish a
waiver form (BIR Form No. ____) in accordance with the
following procedures:
(a)

Fill up three (3) copies of the prescribed waiver form


(BIR Form No. ____)

(b)

Submit to his employer within ten (10) days from


employment, together with the BIR Form 1902 said
waiver form for acknowledgment in the space provided
for that purpose.
The employer of the husband shall:
(i)

After filling up the acknowledgment portion of


the waiver form, retain the duplicate copy of the
form and furnish the employee the original and
triplicate copies for submission to the employer of
the wife and for file of the employee, respectively.

(ii)

Stop deductions of exemptions of children from


the husband's compensation income starting the
following month.
The employer of the wife shall:
Upon receipt of copy of the waiver form duly
acknowledged by the employer of the husband,
start deducting exemptions of children from the
wife's income on the month when the employer of
the husband stopped deducting the exemptions of
children from the husband's income.

(c)

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The employed husband and wife shall apply the waiver in


the computation of their respective taxable income in the
income tax return required to be filed by them following
the procedure for filing the waiver under Section 2.79.1

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(C)(4) of these regulations, that is, the husband shall not


deduct exemptions of children from his compensation
income because he has waived the same (exemptions of
children) in favor of his wife who will now deduct said
exemptions from her income in computing her tax due.
Waiver exercised during the calendar year shall be made only
once in a calendar year and shall take effect for the present
calendar year and succeeding year/s until revoked by the
husband. Any waiver/revocation of such waiver shall take effect
only starting the succeeding calendar year. In no case should an
employer of the wife deduct exemptions of children from the
wife's income unless the waiver by the husband has been duly
acknowledged by the employer of the husband.

See earlier provision under Section 9, Revenue Regulations No. 6-82 and
subsequent amendment made by Revenue Regulations No. 4-93.
See also Section 4, Revenue Regulations No. 7-96 (dated June 6, 1996)
Re: Prescribing the Use of the Redesigned/New Forms in the Filing of Tax and
Information Returns/Declarations and Applications for Registration and
Permit.
Section 2.79.2 - Failure to file Application for Registration (BIR Form No. 1902) or
Certificate of Update of Exemption and of Employer's and Employee's Information (BIR
Form No. 2305)
135

As amended by Section 4, Revenue Regulations No. 10-2008:


Original text:
SECTION 2.79.2. Failure to File Application for Registration (Form
No. 1902 or Exemption Certificate). Where an employee, in violation of
these regulations either fails or refuses to file an Application for Registration
(1902) together with the required attachments, the employer shall withhold the
taxes prescribed under the Schedule for Zero Exemption of the Revised
Withholding Tax Table effective January 1, 1998. In case of failure to file the
Exemption Certificate (2305) together with the attachments, the employer shall
withhold the taxes based on the reported personal exemptions existing prior to
the change of status and without reflecting any change. Any refund or
underwithholding that shall arise due to the violations shall be covered by the
penalties prescribed in Section 80 of the NIRC, as amended (Liability for Tax).

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Section 2.79.3 - Withholding on the Basis of Average Compensation


136

See earlier provision under Section 12, Revenue Regulations No. 6-82 and
subsequent amendments thereto.

Section 2.79.4 - Husband and Wife


137

See earlier provision under Section 13, Revenue Regulations No. 6-82 and
subsequent amendments thereto.

Section 2.79.6 - Year-End Adjustment


138

See earlier provision under Section 22(b), Revenue Regulations No. 6-82 and
subsequent amendments made by Revenue Regulations Nos. 6-83 and 12-86.
See also Revenue Memorandum Order No. 80-98, Revenue
Memorandum Order No. 5-2001, and Revenue Regulations No. 7-2000.

139

See Revenue Regulations No. 3-98 and subsequent amendments made by


Revenue Regulations Nos. 8-2000 and 10-2000.

Section 2.80 (A) - Liability for Tax; Employer


140

As amended by Section 5, Revenue Regulations No. 10-2008.


Original text:
SECTION 2.80. Liability for Tax.
(A) Employer.
(1) In general, the employer shall be responsible for the withholding
and remittance of the correct amount of tax required to be deducted and
withheld from the compensation income of his employees. If the employer fails
to withhold and remit the correct amount of tax, such tax shall be collected from
the employer together with the penalties or additions to the tax otherwise
applicable.
(2) The employer who required to collect, account for and remit any
tax imposed by the NIRC, as amended, who willfully fails to collect such tax, or
account for and remit such tax or willfully assist in any manner to evade any
payment thereof, shall in addition to other penalties, provided for in the Code, as
amended, be liable, upon conviction, to a penalty equal to the amount of the tax
not collected nor accounted for or remitted.
(3)

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Any employer/withholding agent who fails, or refuses to refund

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excess withholding tax not later than January 25 of the succeeding year shall, in
addition to any penalties provided in Title X of the Code , as amended, be liable
to a penalty equal to the total amount of refund which was not refunded to the
employee resulting from any excess of the amount withheld over the tax actually
due on their return.
xxx

xxx

xxx

See earlier provision under Section 14, Revenue Regulations No. 6-82
and subsequent amendment made by Revenue Regulations No. 4-93.
141

Statutory Offenses and Penalties

Section 2.80 (B) - Liability for Tax; Employee


142

As amended by Section 5, Revenue Regulations No. 10-2008.


Original text:
SECTION 2.80. Liability for Tax.
xxx

xxx

xxx

(B) Employee. Where an employee fails or refuses to file the


withholding exemption certificate or willfully supplies false or inaccurate
information thereunder after due written notice by the employer, the tax
otherwise to be withheld by the employer shall be collected from him including
penalties or additions to the tax from the due date of remittance until the date of
payment. On the other hand, where the employee, after due written notice from
the employer, willfully fails or refuses to file the application for registration OR
the withholding exemption certificate or willfully supplies false and inaccurate
information, the excess taxes withheld by the employer shall not be refunded to
the employee but shall be forfeited in favor of the government.
xxx

xxx

xxx

Section 2.80 (C) - Liability for Tax; Additions to Tax; Deficiency Interest
143

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See Section 272 (Violation of Withholding Tax Provision), NIRC of 1997; EO


651; Revenue Memorandum Order No. 29-97 (effective May 27, 1997) Re:
Procedures in the Implementation of the DOF-DBM. Joint Circular No. 3-97;
Revenue Memorandum Order No. 41-97 (effective July 17, 1997) Re:
Prescribing the Policies and Procedures in the Implementation of Operation
"Even Returns"; and Revenue Memorandum Order No. 88-99 (dated
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October 13, 1999) Re: Strict Monitoring and Verification of Government


Offices' Compliance to the Withholding Tax Requirements as part of the
"GOVERNMENT WITHHOLDING TAX PROGRAM".
See also issuances designating personnel of government offices as
withholding agents Revenue Regulations No. 1-87, and subsequent
amendments made by Revenue Regulations No. 6-96, and Revenue
Regulations No. 10-97; Revenue Memorandum Order No. 14-98, and
subsequent amendment made by Revenue Memorandum Order No. 70-98.
Section 2.80 (E) - Liability for Tax; Specific Penalties
144

Authority of the Commissioner to compromise, abate, and refund or credit


taxes.

145

See issuances designating personnel of government offices as withholding


agents Revenue Regulations No. 1-87, and subsequent amendments made
by Revenue Regulations No. 6-96, and Revenue Regulations No. 10-97;
Revenue Memorandum Circular No. 40-2001; Revenue Memorandum
Order No. 14-98, and subsequent amendment made by Revenue
Memorandum Order No. 70-98.

Section 2.81 - Filing of Return and Payment of Income Tax Withheld on Compensation
(Form No. 1601)
146

As amended by Section 4(1), Revenue Regulations No. 6-2001.


Original text:
SECTION 2.81. Filing of Return and Payment of Income Tax Withheld
on Compensation (Form No. 1601). Every person required to deduct and
withhold the tax on compensation shall make a return and pay such tax on or
before the 10th day of the month following the month in which withholding was
made to any authorized agent bank within the Revenue District Office (RDO) or
in places where there are no agent banks, to the Revenue District Officer of the
City or Municipality where the withholding agent/employers legal residence or
place of business or office is located; provided, however, that taxes withheld
from the last compensation (December) for the calendar year shall be paid not
later than January 25 of the succeeding year; Provided, further, that large
taxpayers as determined by the Commissioner shall remit taxes withheld on or
before the 25th day of the following month.
LibLex

If the person required to withhold and pay the tax is a corporation, the
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return shall be made in the name of the corporation and shall be signed and
verified by the president, vice-president, or authorized officers.
With respect to any tax required to be withheld by a fiduciary, the
returns shall be made in the name of the individual, estate, or trust for which
such fiduciary acts, and shall be signed and verified by such fiduciary. In the
case of two or more joint fiduciaries the return shall be signed and verified by
one of such fiduciaries.

See earlier provision under Section 16, Revenue Regulations No. 6-82
and subsequent amendment made by Revenue Regulations No. 4-93; and
Section 2, Revenue Regulations No. 5-85 and subsequent amendments
thereto.
See also Revenue Regulations No. 9-2001.
Section 2.82 - Return and Payment in case Where the Government is the Employer
147

See Section 82 (Return and Payment in Case of Government Employees),


NIRC of 1997.
See also issuances designating personnel of government offices as
withholding agents Revenue Regulations No. 1-87, and subsequent
amendments made by Revenue Regulations No. 6-96, and Revenue
Regulations No. 10-97; Revenue Memorandum Circular No. 40-2001;
Revenue Memorandum Order No. 14-98, and subsequent amendment made
by Revenue Memorandum Order No. 70-98.

Section 2.83.1 - Employees Withholding Statement (BIR Form No. 2316)


148

As last amended by Section 6, Revenue Regulations No. 10-2008.


Original text:
SECTION 2.83.1. Employees Withholding Statements (BIR Form No.
2316). In general, every employer or other person who is required to deduct
and withhold the tax on compensation and fringe benefits shall furnish every
employee from whose compensation taxes have been withheld the Certificate of
Income Tax Withheld on Compensation (Form No. 2316, formerly Form No.
W-2) on or before January 31 of the succeeding calendar year, or if his
employment is terminated before the close of such calendar year, on the day on
which the last payment of compensation is made.
The employer shall furnish each employee with the original and

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duplicate copies of Form No. 2316 showing the name and address of the
employer; employer's TIN; name and address of the employee; employee's TIN;
amount of exemptions claimed; amount of premium payments on medical
insurance not exceeding P2,400.00, if any; the sum of compensation paid
including the non-taxable benefits; the amount of tax due; the amount of tax
withheld during the calendar year and such other information as may be
required. The statement must be signed by both the employer or other authorized
officer and the employee, and shall contain a written declaration that it is made
under the penalties of perjury. If the employer is the Government of the
Philippines, its political subdivision, agency or instrumentality or
government-owned or controlled corporation, the statement shall be signed by
the duly designated officer or employee.
An extra copy of Form 2316 shall be furnished by the employee, duly
certified by him, to his new employer.

As amended by Section 2, Revenue Regulations No. 19-2002:


"Section 2.83.1. Certificate of Compensation Payment/Tax Withheld
(BIR Form No. 2316). In general, every employer or other person who is
required to deduct and withhold the tax on compensation including fringe
benefits given to rank and file employees, shall furnish every employee from
whose compensation taxes have been withheld the Certificate of Compensation
Payment/Tax Withheld (BIR Form No. 2316), on or before January 31 of the
succeeding calendar year, or if the employment is terminated before the close of
such calendar year, on the day on which the last payment of compensation is
made. Failure to furnish the same shall be a ground for the mandatory audit of
payors income tax liabilities (including withholding tax) upon verified
complaint of the payee.
xxx

xxx

xxx

The Certificate of Compensation Payment/Tax Withheld (BIR Form


No. 2316) shall contain a certification to the effect that the employer's filing
of BIR Form No. 1604-CF shall be considered as a substituted filing of the
employee's income tax return to the extent that the amount of compensation
and tax withheld appearing in BIR Form No. 1604-CF as filed with BIR is
consistent with the corresponding amounts indicated in BIR Form No. 2316.
It shall be signed by both the employee and employer attesting to the fact that
the information stated therein has been verified and is true and correct to
the best of their knowledge. However, the withholding agents/employers are
required to retain copies of the duly signed BIR Form No. 2316 for a period
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of three (3) years as required under the National Internal Revenue Code.
The employee who is qualified for substituted filing of income tax return
under these regulations, shall no longer be required to file income tax return
(BIR Form No. 1700) since BIR Form No. 1604-CF shall be considered a
substituted return filed by the employer. BIR Form No. 2316, duly certified by
both employee and employer, shall serve the same purpose as if a BIR Form
No. 1700 had been filed, such as proof of financial capacity for purposes of
loan, credit card, or other applications, or for the purpose of availing tax
credit in the employee's home country and for other purposes with various
government agencies. This may also be used for purposes of securing travel
tax exemption, when necessary.
However, information referring to the certification, appearing at the
bottom of BIR Form No. 2316, shall not be signed by both the employer and
the employee if the latter is not qualified for substituted filing. In which case,
BIR Form No. 2316 furnished by the employer to the employee shall be
attached to the employees Income Tax Return (BIR Form No. 1700) to be
filed on or before April 15 of the following year.
For the implementation of these Regulations, BIR Form No. 2316 herein
referred to shall be BIR Form No. 2316 version October 2002 or any later
version. Thus, the old version cannot be used for this purpose although may be
used for those taxpayers still required to file BIR Form No. 1700."

As amended by Section 2, Revenue Regulations No. 3-2002:


"Section 2.83.1. Employees Withholding Statements (BIR Form No.
2316). In general, every employer or other person who is required to deduct
and withhold the tax on compensation including fringe benefits given to rank
and file employees, shall furnish every employee from whose compensation
taxes have been withheld the Certificate of Income Tax Withheld on
Compensation (BIR Form No. 2316) on or before January 31 of the succeeding
calendar year, or if employment is terminated before the close of such calendar
year, on the day on which the last payment of compensation is made. Failure to
furnish the same shall be a ground for the mandatory audit of payor's income
tax liabilities (including withholding tax) upon verified complaint of the
payee.

xxx

xxx

xxx

The employee who is qualified for substituted filing of income tax


return under these regulations, and the employer, shall issue a joint
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certification (Annex "A") to the effect that the employer's filing of BIR Form
No. 1604-CF shall be considered a substituted filing of the employee's income
tax return to the extent that the amount of compensation and tax withheld
appearing in BIR Form No. 1604-CF, as filed with the BIR, is consistent with
the corresponding amounts indicated in BIR Form No. 2316 and the
certification. The parties shall likewise certify, under oath, that the
information stated in such certification is true and correct to the best of their
knowledge. Such employee shall no longer be required to file income tax
return (BIR Form No. 1700) since BIR Form No. 1604-CF shall be
considered a substituted return filed by the employer with the consent of such
employee.
The joint certification shall serve the same purpose as if a BIR Form
No. 1700 had been filed, such as proof of financial capacity for purposes of
loan, credit card, or other applications, or for the purpose of availing tax
credit in the employee's home country and for other purposes with various
government agencies. This may also be used for purposes of securing travel
tax exemption, when necessary."

See earlier provision under Section 20(a), Revenue Regulations No. 6-82
and subsequent amendment made by Revenue Regulations No. 4-93; and
Section 7, Revenue Regulations No. 2-95 (dated January 3, 1995) Re:
Implementing Republic Act No. 7833 An Act to Exclude the Benefits
Mandated Pursuant to Republic Act No. 6686 and Presidential Decree No. 851,
as Amended, and other Benefits from the Computation of Gross Compensation
Income for the Purposes of Determining Taxable Compensation Income,
Amending for the Purpose Section 28 (b) (8) of the National Internal Revenue
Code, as Amended.
Section 2.83.2 - Annual Information Return of Income Tax Withheld on Compensation
(Form No. 1604, Formerly Form No. 1743IR)
149

As amended by Section 6, Revenue Regulations No. 10-2008.


Original text:
SECTION 2.83.2. Annual Information Return of Income Tax Withheld
on Compensation (Form No. 1604, Formerly Form No. 1743IR). Every
employer or other person required to deduct and withhold the tax shall, on or
before January thirty-first of the succeeding year, file with either the Collection
Agent or Authorized Municipal Treasurer or Revenue District Officer or
Commissioner the Annual Information Return of Income Tax Withheld on
Compensation (BIR Form No. 1604), to be submitted with an alphabetical list

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of employees, both in duplicate copies.


(A) The Annual Information Return of Income Tax Withheld on
Compensation must show among others, the following:
(1)

Withholding Agent's registered name, address and Taxpayer's


Identification Number (TIN);

(B) The alphabetical list of employees must show the following:


(1)

Name and TIN of employees;

(2)

Gross compensation paid by present and previous employers for


the calendar year;

(3)

(a) Taxable 13th month pay/Other benefits for the rank and file
employees
(b) Taxable fringe benefits for managerial employees

(4)

Non-taxable 13th month pay/Other benefits (Present employer)

(5)

Amount of exemptions;

(6)

Amount of premium payments on medical insurance not exceeding


P2,400.00, if any;

(7)

Tax required to be withheld computed in accordance with Sec.


24(A) of the Code;

(8)

Tax withheld by all present employers for calendar year; and

(9)

Adjustment, if any.

(C) The alphabetical list of employees shall be prepared indicating


among others, separate listings of the following:

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(1)

Employees as of December 31 of the taxable year without previous


employment during the year;

(2)

Employees as of December 31 of the taxable year with previous


employment within the year;

(3)

Employees who were terminated prior to the year-end adjustment


computation showing the month of termination/month of last

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payment of compensation during the year of termination; and


(4)

Alien employees subject to final withholding tax.

In cases where no information was provided by a previous employer,


such fact should be annotated in Form 1604 and the present employer shall not
be liable to any penalties.

See earlier provision under Section 8, Revenue Regulations No. 2-95;


Sections 3 and 4, Revenue Regulations No. 5-85 and subsequent amendments
thereto; and Section 20, Revenue Regulations No. 6-82 and subsequent
amendment made by Revenue Regulations No. 4-93.
See also Revenue Regulations No. 8-98 and Revenue Memorandum
Order No. 5-2001.
Section 2.83.3 - Requirement for List of Payees
150

Now as amended by Revenue Regulations No. 1-2014 and as last amended by


Section 6, Revenue Regulations No. 10-2008.
Original text:
SECTION 2.83.3. Requirement for Income Payees List. In lieu of the
manually prepared alphabetical list of employees and list of payees and income
payments subject to creditable and final withholding taxes which are required to
be attached as integral part of the Annual Return (Form No. 1604), the
Withholding Agent may, at its option, submit computer-processed tapes or
cassettes or diskettes, provided that the said list has been encoded in accordance
with the formats prescribed by Form 1604.
(4)

As amended by Section 1, Revenue Regulations Nos. 7-2000:


"SEC. 2.83.3. Requirement for list of Income Payees. In lieu of the
manually prepared alphabetical list of employees and list of payees and income
payments subject to creditable and final withholding taxes which are required to
be attached as integral part of the Annual Information Returns (Form No.
1604CF/1604E), the Withholding Agent may, at his option, submit 3.5 inch
floppy diskettes, containing the said lists.
However, for large taxpayers, excise taxpayers and other taxpayers
whose number of employees or income payees are fifty (50) or more, the
said list of employees and income payees shall be submitted in magnetic
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form using 3.5-inch floppy diskettes to the Large Taxpayers Assistance


Division, Large Taxpayers District Offices, Excise Taxpayers Assistance
Division or to the respective Revenue District Office having jurisdiction
over the taxpayer on or before January 31 of the succeeding year, for
income payments subject to compensation and final withholding taxes and
on or before March 1 of the following year for those subject to creditable
expanded withholding taxes. The list shall conform to the technical
specifications prescribed under Annex A hereof."

As amended by Section 3, Revenue Regulations No. 3-2002:


"Section 2.83.3. Requirement for list of payees. In addition to the
manually prepared alphabetical list of employees and list of payees who are
recipients of income payments subjected to creditable and final withholding
taxes which form part of the Annual Information Returns (BIR Form Nos.
1604-CF/1604-E), the withholding agent may, at his option, submit 3.5 inch
floppy diskettes, containing the said list.
However, taxpayers whose number of employees or income payees
are ten (10) or more, are mandatorily required to submit the said lists in a
3.5 inch floppy diskettes, using the existing CSV data file format, together
with the manually prepared alphabetical list. In order to comply with this
format, the withholding agents shall have the option to use any of the
following:
1.
the Excel format provided under Revenue Regulations No.
7-2000 with technical specifications to be prescribed in a Revenue
Memorandum Circular (RMC) to be issued by the BIR;
2.
their own extract program that shall meet the requirements
specified in the above-mentioned RMC; or
3.
the Data Entry Module using Visual Foxpro that will be
available upon request or by downloading from the BIR's web site at
http://www.bir.gov.ph, with the corresponding job aid to be provided in the
above-mentioned RMC.
For those who would choose either option 1 or 2, such taxpayers
shall use a validation module developed by the BIR, which can be
downloaded from the BIR website.
In any case, the withholding agents are required to save the same to
a secondary storage as back up for a period of three (3) years from
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submission of the diskette, as aforementioned, for future reference.


For withholding agents classified as large taxpayers and excise
taxpayers falling within the jurisdiction of the Large Taxpayers Service
and/or Large Taxpayers District Office, the Annual Information Return of
Income Taxes Withheld on Compensation and Final Withholding Taxes
(BIR Form No. 1604-CF) and the Annual Information Return of Creditable
Income Taxes Withheld (Expanded)/Income Payments Exempt from
Withholding Tax (BIR Form No. 1604-E) shall be submitted to the Large
Taxpayers Assistance Division, Large Taxpayers District Offices or Excise
Taxpayers Assistance Division, as the case may be. For other withholding
agents, the aforesaid annual returns shall be submitted to their respective
Revenue District Offices. BIR Form No. 1604-CF shall be submitted on or
before January 31 of the succeeding year while BIR Form No. 1604-E shall
be filed on or before March 1 of the following year. Only diskettes readable
upon submission shall be considered as duly filed "Alphabetical List of
Employees/Payees" by the employer. Violation hereof, shall be a ground
for the mandatory audit of violator's income tax liabilities (including
withholding tax).
The manually prepared (hard copy) alphabetical list of employee
shall be filed in triplicate copies (two copies for the BIR) to be stamped
"received" by the BIR-Large Taxpayers Assistance Division, Large
Taxpayers District Office or the Excise Taxpayers Assistance Division, or
the Revenue District Office where the payor/employer is registered as
Withholding Agent.
Except for the submission of the manually prepared alphabetical list
of employees, all other requirements aforestated above shall apply to
taxable year 2002."

As amended by Section 6, Revenue Regulations No. 10-2008:


SECTION 2.83.3. Requirement for List of Payees. In addition to the
manually prepared alphabetical list of employees and list of payees and income
payments subject to creditable and final withholding taxes which are
required to be attached as integral part of the Annual Information Returns
(BIR Form No. 1604CF/1604E), Monthly Remittance Returns (BIR Form
No. 1601C etc.), the withholding agent may submit soft copy in 3.5-inch
floppy diskettes/CD or email: esubmission@bir.gov.ph, containing the said
alphalists.
However, taxpayers, whose number of employees or income payees are
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ten (10) or more, are mandatorily required to submit the said lists in 3.5-inch
floppy diskettes/CD or email: esubmission@bir.gov.ph using the existing CSV
data file format, together with the manually prepared alphabetical list. In order
to comply with this format, the withholding agents shall have the option to use
any of the following:
1.
Excel format provided under Revenue Regulations No. 7-2000, as
amended, following the technical specifications required by the BIR;
2.
Their own extract program that shall meet the technical
specifications required by the BIR; or
3.
Data Entry Module using Visual FoxPro that will be available upon
request or by downloading from the BIR's web site at http://www.bir.gov.ph
with the corresponding job aid.
For those who would choose either option 1 or 2, such taxpayers shall
use a validation module developed by the BIR, which can be downloaded from
the BIR website.
In any case, the withholding agents are required to save the same to a
secondary storage as back up for a period of three (3) years from submission of
the diskette, as aforementioned, for future reference.
For withholding agents classified as large taxpayers and excise taxpayers
falling within the jurisdiction of the Large Taxpayers Service and/or Large
Taxpayers District Office, the Annual Information Return of Income Taxes
Withheld on Compensation and Final Withholding Taxes (BIR Form No.
1604-CF) and the Annual Information Return of Creditable Income Taxes
Withheld (Expanded)/ Income Payments Exempt from Withholding Tax (BIR
Form No. 1604-E) shall be submitted to the Large Taxpayers Assistance
Division, Large Taxpayers District Offices or Excise Taxpayers Assistance
Division, as the case may be. For other withholding agents, the aforesaid annual
returns shall be submitted to their respective Revenue District Offices. BIR
Form No. 1604-CF shall be submitted on or before January 31 of the succeeding
year while BIR Form No. 1604-E shall be filed on or before March 1 of the
following year. Only diskettes/CD/email: esubmission@bir.gov.ph readable
and virus free files upon submission shall be considered as duly filed
"Alphabetical List of Employees/Payees" by the employer. Violation hereof,
shall be a ground for the mandatory audit of violator's income tax liabilities
(including withholding tax). Diskettes/CDs must be uploaded by the
above-mentioned offices within fifteen (15) days from receipt.
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The manually prepared (hard copy for below 10 employees/payees)


alphabetical list of employee shall be filed in triplicate copies (two copies for
the BIR) to be stamped "received" by the BIR-Large Taxpayers Assistance
Division, Large Taxpayers District Office or the Excise Taxpayers Assistance
Division, or the Revenue District Office where the payor/employer is registered
as Withholding Agent. Manually filed alphalists must be encoded and
uploaded by the abovementioned offices within thirty (30) days from
receipt.

See Revenue Memorandum Order No. 5-2001 and Revenue


Regulations No. 3-84 (effective January 23, 1984) Re: Computer processed
alphabetical list of employees and payees of income payments in lieu of
manually prepared lists.
Section 2.83.4 - Filing of Income Tax Returns by Employees Receiving Purely
Compensation Income
151

As last amended by Section 6, Revenue Regulations No. 10-2008.


Original text:
SECTION 2.83.4. Filing of Income Tax Returns by Employees
Receiving Purely Compensation Income. Individual taxpayers receiving
purely compensation income from Philippine sources which does not exceed an
aggregate amount of P60,000 for the calendar year and the income tax on which
has been withheld correctly by the employer (tax withheld equals tax due) shall
no longer file an income tax return (1700) required under Sec. 51 of the Code.
The following individuals, however, are still required to file their income tax
returns:
(A)

Individuals deriving compensation concurrently from two or


more employers at anytime during the taxable year.

(B)

Individuals whose purely compensation income for the taxable


year exceeds P60,000.

(C)

Individuals receiving a combination of compensation and


business income (mixed income). This includes a married
individual receiving purely compensation income whose spouse
derives income from business.
In case of married individuals who are still required to file
returns, only one return for the taxable year shall be filed by

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either spouse to cover the income of both spouses.


(D)

Employees whose total compensation income, regardless of the


amount, whether from a single or several employers during the
calendar year, the income tax of which has not been withheld
correctly, that is, that the total withholding tax does not equal the
total tax due on total compensation income for the taxable year.

(E)

In case of married individuals where one of the spouses received


compensation income exceeding P60,000, a return shall be filed
to include the income of the other spouse whose compensation is
P60,000 or less.

As amended by Section 3, Revenue Regulations No. 1-2006:


"SEC. 2.83.4. Substituted Filing of Income Tax Returns by Employees
Receiving Purely Compensation Income. . . . .
xxx

xxx

xxx

The following individuals, however, are not qualified for substituted


filing and therefore, still required to file BIR Form No. 1700 in accordance
with existing regulations:
xxx

xxx

xxx

"(C) EMPLOYEES
WHOSE
GROSS COMPENSATION
INCOME DO NOT EXCEED THE STATUTORY MINIMUM WAGE
OR FIVE THOUSAND PESOS (PHP5,000.00) PER MONTH (SIXTY
THOUSAND PESOS [PHP60,000.00] A YEAR), WHICHEVER IS
HIGHER, INCLUDING EMPLOYEES OF THE GOVERNMENT OF
THE PHILIPPINES, OR ANY OF ITS POLITICAL SUBDIVISIONS,
AGENCIES OR INSTRUMENTALITIES, WITH SALARY GRADES 1
TO 3."
xxx

xxx

xxx"

As amended by Section 4, Revenue Regulations No. 3-2002:


"Section 2.83.4. Substituted Filing of Income Tax Returns by
Employees Receiving Purely Compensation Income. Individual taxpayers
receiving purely compensation income, regardless of amount, from only one
employer in the Philippines for the calendar year, the income tax of which has
been withheld correctly by the said employer (tax due equals tax withheld), shall
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not be required to file BIR Form No. 1700. In lieu of BIR Form No. 1700, the
Annual Information Return of Income Taxes Withheld on Compensation and
Final Withholding Taxes (BIR Form No. 1604-CF) (hard copy) filed by their
respective employers, duly stamped "received" by the BIR, shall be
tantamount to the substituted filing of income tax returns by said employees.
The following individuals, however, are not qualified for substituted
filing and therefore, still required to file BIR Form No. 1700 in accordance
with existing regulations:
(A) Individuals deriving compensation from two or more employers
concurrently or successively at anytime during the taxable year.
(B) Employees deriving compensation income, regardless of the
amount, whether from a single or several employers during the calendar year,
the income tax of which has not been withheld correctly (i.e. tax due is not
equal to the tax withheld) resulting to collectible or refundable return.
(C) Employees whose monthly gross compensation income does not
exceed Five Thousand Pesos (P5,000.00) or the statutory minimum wage,
whichever is higher, and opted for non-withholding of tax on said income.
(D) Individuals deriving other non-business, non-profession-related
income in addition to compensation income not otherwise subject to a final
tax.
(E) Individuals receiving purely compensation income from a single
employer, although the income tax of which has been correctly withheld, but
whose spouse falls under Section 2.83A(A), (B), (C) and (D) of these
Regulations.
(F) Non-resident aliens engaged in trade or business in the
Philippines deriving purely compensation income, or compensation income
and other non-business, non-profession-related income.
In case of married individuals who are still required to file returns
under existing provisions of the law, i.e., in those instances not covered by the
substituted filing of returns, only one return for the taxable year shall be filed
by either spouse to cover the income of the spouses, which return shall be
signed by the husband and wife unless it is physically impossible to do so, in
which case signature of one of the spouses would suffice."

See earlier provision under Section 19, Revenue Regulations No. 6-82
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and subsequent amendment made by Revenue Regulations No. 4-93.


Section 2.83.5 - Registration as Withholding Agent
152

As last amended by Section 6, Revenue Regulations No. 10-2008.


Original text:
SECTION 2.83.5. Registration as Withholding Agent. Every person
who makes payment or expects to make payment of compensation in the amount
of sixty thousand pesos (P60,000.00) or more a year or five thousand pesos
(P5,000.00) monthly, to any single employee shall register by filing in duplicate,
with the Revenue District Office (RDO) of the City or Municipality where his
legal residence or place of business is located, an Application for Registration as
a withholding agent using the form prescribed by the Bureau not later than ten
(10) days after becoming an employer.

As amended by Section 4, Revenue Regulations No. 1-2006:


"SEC. 2.83.5. Registration as Withholding Agent. Every person
who makes payment or expects to make payment of compensation in AN
AMOUNT EXCEEDING THE STATUTORY MINIMUM WAGE OR
SIXTY THOUSAND PESOS (P60,000.00) A YEAR (FIVE THOUSAND
PESOS [PHP5,000.00] MONTHLY), WHICHEVER IS HIGHER, to any
single employee shall register by filing in duplicate, with the Revenue District
Office (RDO) of the City or Municipality where his legal residence or place of
business is located, an Application for Registration as a withholding agent
using the form prescribed by the Bureau not later than ten (10) days after
becoming an employer."

See earlier provision under Section 23, Revenue Regulations No. 6-82
and subsequent amendments thereto.
Section 2.83.6 - Applicability of Constructive Receipt of Compensation
153

See earlier provision under Section 25, Revenue Regulations No. 6-82 and
subsequent amendments thereto.

Section 2.83.7 - Extension of Time for Furnishing Statements to Employee


154

See earlier provision under Section 20(b), Revenue Regulations No. 6-82 and
subsequent amendment made by Revenue Regulations No. 4-93.

Section 4.114 (A) - Withholding of Creditable Value-Added Tax

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155

As amended by Section 7, Revenue Regulations No. 14-2002.


Original text:
SECTION 4.114. Withholding of Creditable Value-Added Tax.
In general, value-added tax due on sales of goods and services are not
subject to withholding since the tax is not determinable at the time of sale.
However, sale of goods and services to the government subject to VAT shall be
subject to withholding pursuant to Sec. 114 (C) of RA 8424.
(A) Rates and basis of creditable value-added tax to be withheld.
The gross payments made by the government to sellers of goods and services
shall be subject to withholding tax at the rates herein prescribed:
(1)

In general, payments by the government or any of its political


subdivisions,
instrumentalities
or
agencies
including
government-owned or controlled corporations (GOCCs) on
account of its purchase of goods from sellers and services
rendered by contractors who are subject to the value-added tax
On gross payment for the purchase of goods -

3%

On gross payment for services rendered

6%

(2)

Payments made to government public works contractors 8.5%

(3)

Payments for lease or use of property or property rights to


non-resident owners 10%
xxx

xxx

xxx

See issuances on withholding of taxes on certain money payments of


government offices, agencies and instrumentalities Revenue Regulations
No. 4-83; Revenue Regulations No. 20-86; Revenue Regulations No. 4-88;
Revenue Regulations No. 10-93; Revenue Regulations No. 7-95 and
subsequent amendments thereto; Revenue Memorandum Circular No. 2-87;
Revenue Memorandum Circular No. 18-88; Revenue Memorandum
Circular No. 3-2000; II, A, 5, Revenue Memorandum Order No. 27-95;
Revenue Memorandum Order No. 88-99; Revenue Memorandum Order
No. 16-200; Revenue Memorandum Order No. 27-2001; and Revenue
Audit Memorandum Order No. 5-86.
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Section 4.114 (B) - Persons Required to Deduct and Withhold


156

As amended by Section 7, Revenue Regulations No. 14-2002.


Original text:
SECTION 4.114. Withholding of Creditable Value-Added Tax.
xxx

xxx

xxx

(B) Persons required to deduct and withhold. All local government


units, represented by the Provincial Treasurer in provinces, the City Treasurer in
cities, the Municipal Treasurer in municipalities, and Barangay Treasurer in
barangays, Treasurers of GOCCs and the Chief Accountant or any person
holding similar position and performing similar function in national government
offices, as withholding agents, shall deduct and withhold the prescribed
creditable value-added tax before making any payment to seller of goods and
services.
Where the government as herein defined has regional offices, branches
or units, the withholding and remittance of the creditable VAT may be done on
a decentralized basis as such, the treasurer or the chief accountant or any person
holding similar function in said regional office, branch or unit shall deduct and
withhold the creditable VAT before making any payment to the seller of goods
and services.
xxx

xxx

xxx

See Executive Order No. 651; and issuances designating personnel of


government offices as withholding agents Revenue Regulations No. 1-87
and subsequent amendments made by Revenue Regulations No. 6-96, and
Revenue Regulations No. 10-97; Revenue Memorandum Circular No.
40-2001; Revenue Memorandum Order No. 14-98, and subsequent
amendment made by Revenue Memorandum Order No. 70-98.
Section 4.114 (C) - Returns and Payment of Taxes Withheld
157

As last amended by Section 3, B, Revenue Regulations No. 2-2006.


Original text:
SECTION 4.114. Withholding of Creditable Value-Added Tax.
xxx

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xxx

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(C) Returns and payment of taxes withheld. The withholding agents


shall accomplish the Monthly Value-Added Tax Declaration (BIR Form
2550M) in duplicate and the amount withheld paid upon filing the return with
the authorized agent banks located within the Revenue District Office (RDO)
having jurisdiction over the place where the government office is located. In
places where there are no authorized agent bank, the return shall be filed directly
with the Revenue District Offices, Collection Offices or the duly authorized
Treasurer of the city or municipality where the government office is located
except in cases where the Commissioner otherwise permits.
The required return shall be filed and payments made within ten (10)
days following the end of the month the withholding was made except taxes
withheld for the 3rd month of the quarter which shall be remitted through a
Quarterly Value-Added Tax Return (BIR Form 2550Q) to be filed not later than
the 25th day after the end of the calendar quarter.
cda

xxx

xxx

xxx

As amended by Section 7, Revenue Regulations No. 14-2002:


"SECTION 4.114. Withholding of Creditable Value-Added Tax.
xxx

xxx

xxx

(C) Returns and payment of taxes withheld. The withholding agents


shall accomplish the Monthly Remittance Returns of Value-Added Tax and
Other Percentage Taxes Withheld (BIR Form No. 1600) in triplicate and the
amount withheld paid upon filing the return with the authorized agent banks
under the jurisdiction of the Revenue District Office (RDO)/Large
Taxpayers District Office (LTDO) where the withholding agent is required to
register and file the return. In places where there is no authorized agent bank,
the return shall be filed directly with the Revenue Collection Officer or the duly
authorized Municipal/City Treasurer of the Revenue District Office where the
withholding agent is required to register or file the return, except in cases
where the Commissioner otherwise permits.
xxx

xxx

xxx"

See also amendment made by Revenue Regulations No. 4-2002.


Section 4.114 (D) - Certificate of Value-Added Tax Withheld
158
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As last amended by Section 2, Revenue Regulations No. 28-2003.


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Original text:
SECTION 4.114. Withholding of Creditable Value-Added Tax
xxx

xxx

xxx

(D) Certificate of Value Added Tax Withheld. Every withholding


agent shall furnish each seller of goods and services from whom taxes has been
deducted and withheld, the Certificate of Creditable Tax Withheld at Source
(BIR Form 2307) to be accomplished in quadruplicate, the first three copies of
which shall be given to the seller/payee not later than the fifteenth day of the
following month. The fourth copy shall be the file copy of the withholding
agent.
xxx

xxx

xxx

As amended by Section 5, Revenue Regulations No. 12-2001:


SECTION 4.114. Withholding of Creditable Value-Added Tax
xxx

xxx

xxx

"(D) Certificate of value added tax withheld at source. Every


withholding agent shall furnish each seller of goods and services from whom
taxes has been deducted and withheld, the Certificate of Creditable Tax
Withheld at Source (BIR Form 2307) to be accomplished in quadruplicate, the
first three copies of which shall be given to the seller/payee not later than the
fifth (5th) day of the following month. The fourth copy shall be the file copy of
the withholding agent."

Section 4.114 (E) - Liability of Designated Officers


159

Additions to the Tax.

160

See Section 272 (Violation of Withholding Tax Provision), NIRC of 1997; and
EO 651 entitled "Requiring Government Offices, Agencies and
Instrumentalities to Comply Strictly with the Laws and Regulations on
Withholding Taxes" (dated February 16, 1981).

160-a Sec. 4.114 was impliedly repealed by the enactment of RA 9337 amending,
among others, Section 114 of the NIRC of 1997. See now Section 4.114-2, RR
16-2005.
Section 5.116 (A) - Withholding of Percentage Tax; Internal Revenue Taxes Required to
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be Withheld
161

As amended by Section 8, Revenue Regulations No. 14-2002.


Original text
SECTION 5.116. Withholding of Percentage Tax.
Bureaus, offices and instrumentalities of the government, including
government-owned or controlled corporations as well as their subsidiaries,
provinces, cities and municipalities making any money payment to private
individuals, corporations, partnerships and/or associations are required to deduct
and withhold the taxes due from the payees on account of such money
payments.
(A) Internal revenue taxes required to be withheld. Percentage taxes
on gross money payments, to the following shall be subjected to withholding at
the rates herein prescribed:
(1)

Persons exempt from value-added tax (VAT). On gross


payments to persons who are exempt under Sec. 109 (z) of the
Code from payment of value-added tax and who is not a VAT
registered person except payment to cooperatives Three
percent (3%)

(2)

Domestic carriers and keepers of garages. On gross payments


to operators of cars for rent or hire driven by the lessee,
transportation contractors, including those who transports
passengers for hire, and other domestic carriers by land, air or
water, for transport of passengers, except owner of bancas and
owners of animal-drawn two wheeled vehicle, and keepers of
garages Three percent (3%)

(3)

International carriers

(4)

(a)

On gross payments to international air carriers doing


business in the Philippines Three percent (3%)

(b)

On gross payments to international shipping carriers


doing business in the Philippines Three percent (3%)

Franchises
(a)

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television broadcasting companies whose annual gross


receipts of the preceding year does not exceed P10,000.00
Three percent (3%)
(b)

(5)

On gross payments to franchises on electric, gas and


water utilities Two percent (2%)

Banks and non-bank financial intermediaries


(a)

On interest, commissions and discounts paid or given to


banks and non-bank financial intermediaries arising out
of lending activities as well as financial leasing, on the
basis of the remaining maturities of the instrument
Short-term maturity (not exceeding 2 years)
5%
Medium-term maturity (over 2 year but not exceeding 4
years)
3%
Long-term maturity

(6)

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(i)
1%

over 4 years but not exceeding 7 years

(ii)
0%

over 7 years

(b)

On dividends
0%

(c)

On royalties, rentals of property, real or personal, profits


from exchange and all other gross income Five percent
(5%)

Finance companies
(a)

On interest, discounts and other items of gross income paid


to finance companies and other financial intermediaries
not performing quasi-banking functions Five percent
(5%)

(b)

On interests, commissions and discounts paid from their

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loan transactions from finance companies as well as


financial leasing based on the remaining maturities of the
instruments:
Short-term maturity (not exceeding 2 years)
5%
Medium-term maturity (over 2 years but not exceeding 4
years)
3%
Long-term maturity
(i)
over 4 years but not exceeding 7 years
1%
(ii)
over 7 years
0%
(7)

Life insurance premiums On the total premiums paid to persons


doing life insurance business of any sort in the Philippines
Five percent (5%)
However the following shall not be included in the taxable receipts
and consequently not subject to withholding tax:

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(a)

Premiums refunded within six (6) months after payment


on account of rejection of risk or returned for other
reasons to the insured;

(b)

reinsurance premiums where the tax has previously been


paid;

(c)

premiums collected or received by any branch of a


domestic corporation, firm or association doing business
outside the Philippines on account of any life insurance of
a non-resident insured, if any tax on such premium is
imposed by a foreign country where the branch is
established;

(d)

premiums collected or received on account of any


reinsurance, if the insured, in case of personal insurance

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resides outside the Philippines, if any tax on such


premiums is imposed by a foreign country where the
original insurance has been issued or perfected;
(e)

(8)

(9)

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portion of the premiums collected or received by the


insurance companies on variable contracts in excess of
the amounts necessary to insure the lives of the variable
contract workers.

Agents of foreign insurance companies


(a)

On premiums paid to every fire, marine, or miscellaneous


insurance agent legally authorized under the Insurance
Code to procure policies of insurance on risk located in
the Philippines for companies not authorized to transact
business in the Philippines except on reinsurance
premium Ten percent (10%)

(b)

On premium payments obtained directly with foreign


companies where the owner of the property does not
make use of the services of any agent, company or
corporation residing or doing business in the Philippines,
in which case, it shall be the duty of said owners to report
to the Insurance Commissioner and to the BIR
Commissioner each case where insurance has been so
effected Five percent (5%)

Amusements On gross payments to the proprietor, lessee, or


operator of cockpits, cabarets, night or day clubs, boxing
exhibitions, professional basketball games, jai-alai and racetracks
at the rates herein prescribed:
(a)

cockpits Eighteen percent (18%)

(b)

Cabarets, night and day clubs Eighteen percent (18%)

(c)

Boxing exhibitions except those wherein World or


Oriental Championship in any division is at stake and at
least one of the contenders is a citizen of the Philippines
and promoted by a citizen/s of the Philippines or by a
corporation or association at least 60% of the capital of
which is owned by such citizens Ten percent (10%)

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(d)

Professional basketball games as envisioned in


Presidential Decree No. 871 Fifteen percent (15%)

(e)

Jai-alai and racetracks irrespective of whether or not any


amount is charged for admission Thirty percent (30%)

(10) Sale, barter or exchange of shares of stock listed and traded


through the local stock exchange. On the gross selling price
or gross value in money derived on every sale, barter or other
disposition of shares of stock listed and traded through the local
stock exchange other than the sale by a dealer in securities
One-half of one percent (1/2 of 1%)
(11) Shares of stock sold or exchanged through initial public offering.
On the gross selling price or gross value in money derived on
every sale, barter, exchange or other disposition through initial
public offering of shares of stock in closely held corporations in
accordance with the proportion of such shares to the total
outstanding shares of stock after the listing in the local stock
exchange at the rates herein prescribed:
Not over 25%
4%
Over 25% but not exceeding 33 1/3%
2%
Over 33 1/3%
1%

See Section 7, Revenue Regulations No. 17-2003, excluding paragraph


12 from the enumeration of income payments subject to withholding of
percentage tax which shall no longer apply due to the lapse of Republic Act
No. 9010.
Paragraph 12, as added by Section 8, Revenue Regulations No. 14-2002,
reads as follows:
"xxx
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xxx

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(12) On gross payments to stock, real estate, commercial, customs,


insurance and immigration brokers based on gross receipts for services
rendered pursuant to R.A. 9010. Seven percent (7%)."

See issuances on withholding of taxes on certain money payments of


government offices, agencies and instrumentalities Revenue Regulations
No. 4-83; Revenue Regulations No. 20-86; Revenue Regulations No. 4-88;
Revenue Regulations No. 10-93; Revenue Regulations No. 7-95 and
subsequent amendments thereto; Revenue Memorandum Circular No. 2-87;
Revenue Memorandum Circular No. 18-88; Revenue Memorandum
Circular No. 3-2000; II, A, 5, Revenue Memorandum Order No. 27-95;
Revenue Memorandum Order No. 88-99; Revenue Memorandum Order
No. 16-2000; Revenue Memorandum Order No. 27-2001; and Revenue
Audit Memorandum Order No. 5-86.
162

(z) Sale or lease of goods or properties or the performance of services other


than the transactions mentioned in the preceding paragraphs, the gross annual
sales and/or receipts do not exceed the amount of Five hundred fifty thousand
pesos (P550,000): Provided, That not later than January 31st of the calendar
year subsequent to the effectivity of RA 8241 and each calendar year
thereafter, the amount of Five hundred fifty thousand pesos (P550,000) shall be
adjusted to its present value using the Consumer Price Index, as published by
the National Statistics Office (NSO).

163

Entitled "Placing Professional Basketball Games and Other Professional


Games Under the Supervision and Regulation of the Games and Amusements
Board" (effective January 6, 1976).

164

See Section 127(A) Tax on Sale, Barter or Exchange of Shares of Stock


Listed and Traded Through the Local Stock Exchange, NIRC of 1997.

165

See Section 127(B) Tax on Shares of Stock Sold or Exchanged Through


Initial Public Offering, NIRC of 1997.

Section 5.116 (B) - Returns and Payments of Taxes Withheld


166

As last amended by Section 3, C, Revenue Regulations No. 2-2006.


Original text:
SECTION 5.116. Withholding of Percentage Tax. Bureaus, offices

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and instrumentalities of the government, including government-owned or


controlled corporations as well as their subsidiaries, provinces, cities and
municipalities making any money payment to private individuals, corporations,
partnerships and/or associations are required to deduct and withhold the taxes
due from the payees on account of such money payments.
xxx

xxx

xxx

(B) Returns and payments of taxes withheld. No money payments


shall be made by any government office or agency unless the taxes due thereon
shall have been deducted and withheld.
Taxes deducted and withheld shall be covered by the Monthly Return of
Internal Revenue Taxes withheld on Government Money Payments (BIR Form
1600) in duplicate to be filed and the tax to be paid to the Authorized Agent
Bank located within the Revenue District Office (RDO) having jurisdiction over
the place where the government office is located. In places where there are no
authorized agent bank, the return shall be filed directly with the Revenue
District Officer, Collection Officer or the duly authorized Treasurer of the City
or Municipality where the government office is located except in cases where
the Commissioner otherwise permits. The required return shall be filed and
payments made within ten (10) days following the end of the month the
withholding was made.
xxx

xxx

xxx

As amended by Section 8, Revenue Regulations No. 14-2002:


SECTION 5.116. Withholding of Percentage Tax. Bureaus, offices
and instrumentalities of the government, including government-owned or
controlled corporations as well as their subsidiaries, provinces, cities and
municipalities making any money payment to private individuals, corporations,
partnerships and/or associations are required to deduct and withhold the taxes
due from the payees on account of such money payments.
"xxx

xxx

xxx

(B) Returns and payments of taxes withheld. No money payments


shall be made by any government office or agency, unless the taxes due thereon
shall have been deducted and withheld.
Taxes deducted and withheld shall be covered by the Monthly
Remittance Return of VAT and Other Percentage Taxes Withheld (BIR Form
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No. 1600) in triplicate to be filed and the tax to be paid to the Authorized
Agent Bank under the jurisdiction of the Large Taxpayers Service including
the Large Taxpayer's District Office, in case of large taxpayer, or the
Authorized Agent Bank under the jurisdiction of the Revenue District Office
where the withholding agent is located, for non-large taxpayer. In places where
there are no authorized agent bank, the return shall be filed directly with the
Revenue Collection Officer or the duly authorized Treasurer of the City or
Municipality where the withholding agent is required to register except in
cases where the Commissioner otherwise permits. The required return shall be
filed and payments made within ten (10) days following the end of the month
the withholding was made or the withholding tax has accrued.
xxx

xxx

xxx"

See Revenue Regulations No. 1-98; Revenue Regulations No. 6-2001;


Revenue Regulations No. 9-2001; and Revenue Regulations No. 12-2001.
Section 5.116 (C) - Certificate of Internal Revenue Taxes Withheld
167

As amended by Section 5, Revenue Regulations No. 12-2001.


Original text:
Original text:
SECTION 5.116. Withholding of Percentage Tax. Bureaus, offices
and instrumentalities of the government, including government-owned or
controlled corporations as well as their subsidiaries, provinces, cities and
municipalities making any money payment to private individuals, corporations,
partnerships and/or associations are required to deduct and withhold the taxes
due from the payees on account of such money payments.
xxx

xxx

xxx

(C) Certificate of internal revenue taxes withheld. Every


withholding government office, agency or entity shall furnish each proprietor,
operator, common carrier, franchise holder, bank and non-bank financial
intermediaries, finance company, insurance company or agent from whom taxes
under these regulations had been deducted and withheld the Certificate of
Creditable Tax Withheld at Source (BIR Form 2307) to be accomplished in
triplicate, two copies to be given to the payee simultaneously with the money
payments not later than the fifteenth (15th) day of the month following the close
of the calendar quarter. The third copy of the certificate shall be the file copy of
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the withholding government office, agency or entity.


xxx

xxx

xxx

See also Revenue Regulations No. 1-98 and Revenue Regulations No.
6-2001.
Section 5.116 (D) - Liability of Designated Officers
168

General Provisions, Title X, Chapter I.

169

See Section 272, NIRC of 1997.


See EO 651 entitled "Requiring Government Offices, Agencies and
Instrumentalities to Comply Strictly with the Laws and Regulations on
Withholding Taxes" (dated February 16, 1981); and issuances designating
personnel of government offices as withholding agents Revenue
Regulations No. 1-87, and subsequent amendments made by Revenue
Regulations No. 6-96, and Revenue Regulations No. 10-97; Revenue
Memorandum Circular No. 40-2001; Revenue Memorandum Order No.
14-98, and subsequent amendment made by Revenue Memorandum Order
No. 70-98.

Section 5.128 - Withholding of Percentage Tax on Purchases of Goods and/or Payments


for Services Acquired in the Course of Trade or Business and Rendered by Persons
Subject to the 3% Percentage Tax Pursuant to Section 116 of the Code
170

New provisions added by Section 2, Revenue Regulations No. 14-2003.

Section 9.245 - Withholding of VAT on Purchase of Goods and/or on Payments for


Services Acquired in the Course of Trade or Business and Rendered by Persons Subject
to VAT Pursuant to Sections 106 and 108 of the Code
171

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New provisions added by Section 3, Revenue Regulations No. 14-2003.

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Endnotes
1 (Popup - Popup)
*

Typographical error in numbering corrected by Section 4, Revenue Regulations No.


30-2003.

2 (Popup - Popup)
*

Corrected as subparagraph (x) by Revenue Regulations No. 10-2009.

3 (Popup - Popup)
RA 7392 entitled "An Act to Maximize the Contribution of Senior Citizens to Nation
Building, Grant Benefits and Special Privileges and for Other Purposes" (dated April
23, 1992), provides:
"Section 2.
Definition of Terms. As used in this Act, the term "senior
citizen" shall mean any resident citizen of the Philippines at least sixty (60) years old, including
those who have retired from both government offices and private enterprises, and has an
income of not more than Sixty thousand pesos (P60,000.00) per annum subject to review by the
National Economic and Development Authority (NEDA) every three (3) years."
4 (Popup - Popup)
*

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See issuances on transmittal and processing of withholding tax returns Revenue


Memorandum Order No. 72-98; Revenue Memorandum Order No. 80-98; Revenue
Memorandum Order 5-2001; and Revenue Regulations No. 7-2000.

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