Expanded Withholding Taxes On Government Income Payments

EXPANDED
WITHHOLDING TAXES
ON GOVERNMENT
INCOME PAYMENTS
(Part II)
SEMINAR OBJECTIVES
 To provide participants with a basic understanding of the
underlying laws, regulations and general principles of the
Expanded Withholding Tax (EWT).
 To provide participants with information on the
filing/remittance and other compliance for the EWT.
 To provide relevant tax developments and updates
relating to EWT.
March 3, 2021 2
DISCUSSION OUTLINE
I. Nature and Basic Principles of EWT
II. Withholding Agents
III. Exemptions from Withholding
IV. Effects of Failure to Withhold EWT
V. EWT Base
VI. Tax Credit Mechanism
VII. Timing of Withholding
March 3, 2021 3
DISCUSSION OUTLINE
VIII. Payments Subject to EWT
IX. Administrative Requirements
March 3, 2021 4
NATURE AND
BASIC
PRINCIPLES OF
WITHHOLDING
TAXES
Expanded Withholding Tax 5

NATURE OF EWT
 It is a means of collecting income tax in advance.
 It is creditable against the Payee’s income tax liability.
 The taxes withheld are considered trust funds held for the
Government to be maintained by the withholding agent in
separate accounts (Section 2.58.1 of RR No. 2-98 relative to Section
58 of the Tax Code, as amended).
 A taxpayer, resident or non-resident who contributes to the

withholding tax system, does not really deposit an amount
to the CIR, but, in truth, to perform and extinguish his tax
obligation for the year concerned. (Gibbs v. Commissioner of
Internal Revenue, G.R. No. L-17406, November 29, 1965)
March 3, 2021 6
BASIC PRINCIPLES –
EWT
 Only payments enumerated under the EWT regulations
(RR No. 2-98, as amended) are subject to EWT.
 The Payee and the Payor must be residents of the
Philippines (except in case of payments to non-resident
aliens engaged in trade or business in the Philippines) .
 The EWT is not a final tax.
March 3, 2021 7
WITHHOLDING
AGENTS

REQUIREMENT TO
WITHHOLD
All bureaus, offices, agencies and instrumentalities of
the government, including government owned or controlled
corporations, provinces, cities and municipalities, shall, before
making any money payment to private individuals,
corporations, partnerships and/or associations, deduct and
withhold any and all taxes the amount of which can be fixed,
determined, computed or ascertained, due from such
individuals, corporations, partnerships and/or associations on
account of said money payment.
(RA 1051, effective June 12, 1954)
March 3, 2021 9
WHO ARE WITHHOLDING
AGENTS?
1. Any juridical person, whether or not engaged in trade or
business;
2. All government offices including government-owned

and/or controlled corporations as well as provincial, city,
and municipal governments and barangays;
3. An individual with respect to payments in connection with

his trade or business.
4. All individuals, juridical persons and political parties, with

respect to their income payments made as campaign
expenditures and/or purchase of goods and services
intended as campaign contributions.
March 3, 2021 10
WHO ARE WITHHOLDING
AGENTS?
Exception:
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.
Since the tax 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. 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.
March 3, 2021 11
WHO ARE WITHHOLDING
AGENTS?
RR No. 30-2003 dated December 12, 2003:
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.
March 3, 2021 12
WHO ARE WITHHOLDING
AGENTS?
Examples:
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 there is
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 portions of the bill

which is in the name of another person as long as he is a duly
constituted withholding agent and shall only withhold on portion of
the expense being shouldered by him.
March 3, 2021 13
WHO ARE WITHHOLDING
AGENTS?
Examples:
Income payments made thru brokers or agents or other
person authorized to collect/receive payments for and in
behalf of the payee shall likewise be subject to the
corresponding tax rates to be withheld by the payor/person
having control over the payment with the corresponding
issuance of CWT certificate in the name of the payee whom
the agent represents.
March 3, 2021 14
WHO ARE WITHHOLDING
AGENTS?
 The obligation to withhold is imposed upon the buyer-payor of
income although the burden of tax is really upon the seller-
income earner/payee;
 Hence, unjustifiable refusal of the seller income earner/payee

to be subjected to withholding shall be a ground for the
mandatory audit of all internal revenue tax liabilities, as well as
the imposition of penalties pursuant to Section 275 of the Tax
Code, as amended, upon verified complaint of the buyer-payor.
March 3, 2021 15
WHO ARE WITHHOLDING
AGENTS?
Revenue Memorandum Circular No. 23-07, March 20, 2007
Purchases of the government that are covered by Purchase Orders

duly signed by the authorized official/s as well as purchases using
the Petty Cash Fund shall be subject to the 5% final VAT withholding.
Purchases by any government official and employee recorded as

reimbursable allowance, benefit or incentive to government official
and employee by the concerned government office (e.g., RATA) are
not covered by the withholding of 5% final VAT.
March 3, 2021 16
EXEMPTIONS
FROM
WITHHOLDING

WHO ARE EXEMPT FROM
THE DUTY TO WITHHOLD?
General rule:
Those who do not fall under the definition of withholding
agents are exempt from the duty to withhold.
In other words, only those individuals who are not engaged in
trade or business, except in cases of taxable sales, exchanges or
barters of real properties where the individual payor(buyer) is
always constituted as withholding agent.
March 3, 2021 18
PAYMENTS TO ENTITIES
WHICH ARE NOT SUBJECT TO
EWT
Section 2.57.5 of RR No. 2-98:
No withholding is required on income payments to the

following:
A.National government and its instrumentalities, including

provincial, city or municipal governments and barangays
EXCEPT government-owned and/or controlled corporations.
March 3, 2021 19
EWT
BIR RULING NO. 471-18, March 13, 2018
From the foregoing, it is clear that the Butanding Watching Activity

of Oslob is an exercise of its proprietary function because it does not
involve administration and governance of the territory and
inhabitants within the municipality. Oslob, having engaged in an
activity classified as in the exercise of its proprietary function, is
treated as separate entity acting for its own purpose and not a
subdivision of the Republic of the Philippines. Accordingly, income
derived from such activity, which in the case of Oslob is its 30% share,
will not fall under exclusions from gross income under Section 32 (B)
(7) (b) of the Tax Code of 1997, as amended, hence, considered as
taxable income.
March 3, 2021 20
EWT
Cont’n.:
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:
i. Sales of real property by a corporation which is registered
with and certified 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 the socialized housing price
applicable to the area as prescribed and certified by the said
board/council, as provided under Republic Act No. 7279 and
its implementing regulations;
March 3, 2021 21
EWT
Cont’n.:
ii. Corporations duly registered with the Board of
Investments, Philippine Export Processing Zones and Subic
Bay Metropolitan Authority enjoying exemption from
income tax pursuant to E.O. 226, as amended, R.A. 7916,
the Omnibus Investment Code of 1987 and R.A. 7227, as
amended, respectively;
iii. Corporations which are exempt from the income tax under
Sec. 30 of the Tax Code, as amended, and GOCC/s exempt
from income tax under Section 27(A)(C) of the same Code,
to wit: the GSIS, SSS, PHIC, and LWD;
March 3, 2021 22
EWT
Cont’n.:
iv. General professional partnerships;
v. Joint ventures or consortium formed for the purpose of
undertaking construction projects or engaging in
petroleum, coal, geothermal and other energy operations
pursuant to an operating or consortium agreement under a
service contract with the government.
March 3, 2021 23
EWT
Cont’n.:
The following are the conditions to qualify for as non-taxable JV:

1. Should involve joining or pooling of resources by licensed
local contracts; that is, licensed as general contractor by the
Philippine Contractors Accreditation Board (PCAB) of the
Department of Trade and Industry (DTI);
2. These local contractors are engaged in construction business;
and
3. The Joint Venture itself must likewise be duly licensed as such
by the PCAB of the DTI.
March 3, 2021 24
EWT
Cont’n.:
vi. Individuals who earn P250,000.00 and below from a lone
income payor upon compliance with the following
requirements:
a. The individual has executed a payee's sworn
declaration of gross receipts; in accordance with the
prescribed format.
b. The sworn declaration has been submitted to the lone
income payor/withholding agent on or before January
15 of each year or before the initial income payment,
whichever is applicable.
March 3, 2021 25
EWT
Illustration:
Facts:
Mr. Wil, a messenger, was hired by Brgy. MRU Health Center,

under a Job Order arrangement.
His monthly pay is fixed at P15,000.
He provided Brgy. MRU a notarized sworn declaration of gross

receipts. Brgy. MRU is the lone income payor of Mr. Wil which was
likewise indicated in the aforesaid sworn declaration.
March 3, 2021 26
EWT
Illustration:
Q. How much tax shall be withheld from Mr. Will?
A. ZERO.
 Mr. Wil submitted to Brgy. MRU the notarized payee's sworn
declaration stating that his gross receipts shall not exceed
P250,000, and since the actual receipts for the year did not
exceed the said amount, the income payment was not
subjected to withholding.
 Brgy. MRU, an LGU, may also withhold business tax depending
on the income tax regime selected by Mr. Wil as indicated in
his sworn declaration.
March 3, 2021 27
EWT
The following are the corporations exempt from the income tax under
Sec. 30 of the Tax Code:
1. Labor, agricultural, or horticultural organization not organized

principally for profit;
2.Mutual savings bank not having a capital stock represented by shares,

and cooperative bank without capital stock organized and operated for
mutual purposes and without profit;
3.A beneficiary society, order or association, operating for the exclusive

benefit of the members such as fraternal organization operating under
the lodge system, or a mutual aid association or a non-stock corporation
organized by employees providing for the payment of life, sickness,
accident, or order or association, or non-stock corporation or their
dependents;
March 3, 2021 28
EWT
The following are the corporations exempt from the income tax
under Sec. 30 of the Tax Code:
4.Cemetery company owned and operated exclusively for the

benefit of its members;
5.Non-stock corporation or association organized and operated

exclusively for religious, charitable, scientific, athletic, or cultural
purposes, or for the rehabilitation of veterans, no part of its net
income or asset shall belong to or inure to the benefit of any
member, organizer, officer or any specific person;
6.Business league, chamber of commerce, or board of trade not

organized for profit and no part of the net income of which inures
to the benefit of any private stockholder or individual;
March 3, 2021 29
EWT
The following are the corporations exempt from the income tax under
Sec. 30 of the Tax Code:
7.Civic league or organization not organized for profit but operated

exclusively for the promotion of social welfare;
8.A non-stock and non-profit educational institution;
9.Government educational institution;
10.Farmer’s or other mutual typhoon or fire insurance company,

mutual ditch or irrigation company, mutual or cooperative telephone
company, or like organization of a purely local character, the income
of which consists solely of assessments, dues and fees collected from
members for the sole purpose of meeting its expenses;
March 3, 2021 30
EWT
The following are the corporations exempt from the income tax
under Sec. 30 of the Tax Code:
11.Farmers’, fruit growers’, or like association organized and

operated as a sales agent for the purpose of marketing the product
of its members and turning back to them the proceeds of sales, less
the necessary selling expenses, on the basis of the quantity of
produce finished by them.
March 3, 2021 31
EWT
 Taxes covered by exemption, in general, of corporations
enumerated under Section 30 of the Tax Code:
i. Income tax on donations, subsidy, tithes, offerings,
love gift, etc., not derived from profit-oriented
activities and that no part of its net income or asset
shall belong to, or inure to the benefit of any
member, organizer, officer or any specific person.
ii. Donor’s tax with respect to donation made to
organization, subject to the condition that not more
than thirty percent (30%) of said gift shall be used for
administration purposes.
March 3, 2021 32
EWT
 Taxes covered by exemption, in general, of corporations
enumerated under Section 30 of the Tax Code:
iii. Value added tax. Revenue from contributions and
donations, not being derived from sale of services or
sale of goods made in the course of business but
rather in connection with its non-stock, non-profit
activities, is exempt from the 12% VAT.
March 3, 2021 33
EWT
 Taxes NOT covered by exemption (except for the NSNP
educational institution):
i. Income tax derived from profit oriented activities
(those revenues/income) not enumerated in the
Certificate of Tax Exemption. Eg, rental income,
service fees, etc.
ii. Value added tax (VAT). If the non-stock non-profit
corporation is engaged in the sale of goods or
services in the course of a business pursuit, including
transactions incidental thereto, in general, it shall
also be liable for VAT.
iii. Withholding taxes.
March 3, 2021 34
EWT
BIR Ruling No. 006-10 (Implementing R.A. 9576):
The BTr, other government corporations and institutions and private

entities, including banks that have financial dealings with PDIC shall
no longer be required to withhold the withholding tax on the
income/receivables of the PDIC xxx.
Consequently, the BTr, other government corporations and

institutions and private entities, including banks, shall remit to PDIC
the gross or full amount of PDIC's income/receivables.
However, PDIC shall continue to comply with the provisions of: (i)
WC, FWT and EWT of Suppliers, Contractors and Service Providers of
PDIC; and (ii) CGT and DST (paragraphs C and D)
March 3, 2021 35
EWT
RMC No. 72-2004, Q&A 27:
Q27. Are services rendered by private hospitals and entities

considered as government owned and/or controlled corporations
(GOCC) subject to the 2% EWT if the payor is TTC/GO/LT?
A27. YES, since they are also engaged in the supply of services.
Only GSIS, SSS, PHILHEALTH and LWD (PAGCOR was deleted from the
list of exempt GOCC per R.A. 9337) & PCSO (was deleted from the list
of exempt per TRAIN Law) are exempted from income tax, and
consequently from EWT.
March 3, 2021 36
EWT
RMC No. 72-2004, Q&A 33:
Q33. Are payments made to companies registered with PEZA/BOI

for the purchase of goods or services subject to EWT?
A33. YES, on income payments arising from non-registered

activities. However, payments to PEZA/BOI registered companies
which are exempt from income tax shall not be subjected to EWT
pursuant to Section 2.57.5 of RR No. 2-98, as amended, upon
presentation of proof of exemption issued by the BIR.
March 3, 2021 37
EWT
RMC No. 72-2004, Q&A 33:
Q32. Are payments made by TTC/GO/LT to cooperatives for the

purchase of goods and/or services SUBJECT to EWT?
A32. YES, except when they can show proof of exemption from
income tax issued by the BIR.
March 3, 2021 38
EWT
RMC No. 72-2004, Q&A 33:
Q23. Is the payment for membership dues of the TTC/GO/LT to

country clubs and/or sports club and the like considered services
subject to the 2% EWT under RR No. 17-2003?
A23. YES, membership fees are considered services subjected to

the 2% EWT. However, when the payee-club or organization is a
non-stock, non-profit organization not subject to income tax, payment
is not subject to EWT upon presentation of proof of exemption issued
by the BIR.
March 3, 2021 39
EWT
RMC No. 35-2012
Clubs which are organized and operated exclusively for pleasure,

recreation, and other non-profit purposes are subject to income tax
under the National Internal Revenue Code of 1997, as amended.
The provision in the National Internal Revenue Code of 1977 which

granted income tax exemption to such recreational clubs was
omitted in the current list of tax exempt corporations under
National Internal Revenue Code of 1997, as amended.
Hence, the income of recreational clubs from whatever source,

including but not limited to membership fees, assessment dues,
rental income, and service fees are subject to income tax.
March 3, 2021 40
EWT
Revenue Memorandum Circular No. 8-14
The concerned withholding agents shall require all individuals and

entities claiming such exemption to provide a copy of a valid,
current and subsisting tax exemption certificate or ruling, as per
existing administrative issuances and any issuance that may be
issued from time to time, before payment of the related income.
The tax EXEMPTION CERTIFICATE OR RULING must explicitly

recognize the grant of tax exemption, as well as the corresponding
exemption from imposition of withholding tax.
March 3, 2021 41
EWT
Revenue Memorandum Circular No. 8-14
Failure on the part of the taxpayer to present the said tax

exemption certificate or ruling as herein required shall subject him
to the payment of appropriate withholding taxes due on the
transaction.
The withholding agent's failure to withhold notwithstanding the

lack of tax exemption certificate or ruling shall cause the imposition
of penalties under Section 251 and other pertinent Sections of the
Tax Code.
March 3, 2021 42
EFFECTS OF
FAILURE TO
WITHHOLD

EFFECTS OF FAILURE TO
WITHHOLD
1. Disallowance of expense as a deduction for income tax purposes
Revenue Regulation No. 06-18
 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.
March 3, 2021 44
WITHHOLD
Revenue Regulation No. 06-18
Exception: A deduction will also be allowed if 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, regardless of
whether the payee/recipient paid the income tax due thereon.
Note:
Items of deduction representing return of capital such as those pertaining

to purchases of raw materials forming part of finished product or purchases
of goods for resale, shall be allowed as deductions upon withholding
agent's payment of the basic withholding tax and penalties incident to non-
withholding or under-withholding.
March 3, 2021 45
WITHHOLD
2. Fines and penalties:
i. Surcharge
 25% - if not due to willful neglect
 50% - if due to willful neglect or with intent to defraud the
government
ii. Interest – double the prevailing interest rate (TRAIN Law)
iii. Compromise not exceeding P25,000
3. Other civil and criminal sanctions. Please refer to Part I slides
March 3, 2021 46
WITHHOLD
RMC No. 72-2004
Q11. The TTC/GO/LT failed to withhold tax on payments to

Meralco, telecommunications companies, service providers,
purchase of supplies or goods, etc. as enumerated under RR No. 17-
03 from June 2003 to present. May the TTC/GO/LT deduct the tax
from the current billing of the said companies?
A11. NO, withholding of the EWT shall be in the current month
and may only be deducted in the billings for the current month.
Penalties for failure to withhold the 2% EWT from prior periods
shall be imposed on the payor-withholding agent but it may
request for abatement of penalties under RR No. 13-01 dated
September 27, 2001.
March 3, 2021 47
REGISTRATION OF REAL
PROPERTIES WITH RD
 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 RD unless the Commissioner or his duly authorized
representative has certified that such transfers and conveyances
have been reported and the expanded withholding tax, inclusive
of the documentary stamp tax, due thereon have been fully paid.
 The RD shall annotate on the Original Certificate of Title,

Transfer Certificate of Title or Condominium Certificate of Title
of the said property such information required under Section
58(E) of the Tax Code.
March 3, 2021 48
EWT BASE

WHEN SUPPLIER IS VAT
REGISTERED
RMC No. 23-07
Illustration:
A government agency has the following purchases for the month of January, 2007 from
VAT registered suppliers of goods and/or services:
Particulars Amount
Purchase of Goods (inclusive of VAT) P1,120.00
Purchase of Services (inclusive of VAT) 5,600.00
March 3, 2021 50
REGISTERED
Computation of EWT:
EWT Base EWT

Transactions EWT
(VAT Exclusive) rate
Purchase of Goods (VAT exclusive:
1,000.00 1% 10.00
P1,120/1.12)
Purchase of Services ( VAT
5,000.00 2% 100.00
exclusive: P5,600/1.12 )
TOTAL 6,000.00 110.00
March 3, 2021 51
WHEN SUPPLIER IS NON-
VAT REGISTERED
RMC No. 23-07
Illustration:
A government agency has the following purchases for the month of January, 2007 from
non-VAT registered suppliers of goods and/or services:
Particulars Amount
Purchase of Goods P1,000.00
Purchase of Services 5,000.00
March 3, 2021 52
REGISTERED
Computation of EWT:
EWT Base EWT

Transactions EWT
(Gross Amount) rate
Purchase of Goods 1,000.00 1% 10.00
Purchase of Services 5,000.00 2% 100.00

TOTAL 6,000.00 110.00
March 3, 2021 53
TAX CREDIT
MECHANISM

WHERE IS EWT
CREDITABLE AGAINST?
The amount of creditable tax withheld (CWT) shall be allowed as a tax credit
against the income tax liability of the payee in the quarter of the taxable year in
which income was EARNED OR RECEIVED.
[Section 2.58.3 (A) of RR No. 2-98]
March 3, 2021 55
REQUIREMENTS FOR
CLAIMING REFUND / TAX
CREDITS
Section 2.58.3 of RR No. 2-98
 A taxpayer must establish the following requirements before a
claim of tax credit or refund of creditable withholding tax will be
granted:
i. The claim must be filed within the two-year prescriptive
period as provided under Sections 204 (C) and 229 of the
NIRC of 1997, as amended;
ii. The fact of withholding must be established by a copy of a
statement duly issued by the payor (withholding agent) to
the payee, showing the amount paid and the amount of tax
withheld therefrom; and
iii. The income upon which the taxes were withheld must be
included in the return of the recipient.
March 3, 2021 56
CLAIMING OR APPLYING CWT
AGAINST TAXES DUE TO PAYEE
 Mandatory Submission of Summary Alphalist of Withholding
Agents of Income Payments Subjected to Tax Withheld at Source
(SAWT);
 The SAWT shall be submitted through the applicable modes of
submission prescribed under RR No. 1-2014 , using the data entry
and validation module of the BIR. RR 5-2015
 In lieu of submission of hard copies of CWT as an attachment to
SAWT, the scanned original copies of BIR Form No. 2307 shall be
submitted to the BIR Office where the taxpayer is duly registered,
together with a notarized Certification, duly signed by the
authorized representative of the taxpayer certifying that the soft
copies of the said BIR form contained in the DVD-R are the
complete and exact copies of the original thereof.
March 3, 2021 57
TREATMENT OF EXCESS
CWT
Section 2.58.3 (C) of RR No. 2-98
Option of the taxpayer (individual or corporate)
 Allowed as automatic credit against his income tax
due for the taxable quarters/years immediately
succeeding the taxable quarters/years in which the
excess credit arose.
 In lieu of the automatic application:
i. Cash refund
ii. Tax Credit Certificate
March 3, 2021 58
TREATMENT OF EXCESS
CWT
Section 2.58.3 of RR No. 2-98
 The taxpayer should indicate in the ITR (i.e., by marking
the applicable box) its option for the excess tax credits.
 Once the option to carry-over and apply the excess
quarterly income tax against income tax due for the
taxable quarters of the succeeding taxable years has been
made, such option shall be considered irrevocable for that
taxable period and no application for cash refund or
issuance of a tax credit certificate shall be allowed
therefor.
March 3, 2021 59
TREATMENT OF EXCESS
CWT
VAT Ruling No. 022-04 dated September 13, 2004
Issue:
Whether the Company may apply as credits in subsequent returns
filed, creditable taxes withheld represented by CWT certificates that
are issued by withholding agents only after the filing of the income
tax return.
Held:
The request of the taxpayer is denied:
 There cannot be a carry-over of withheld taxes that have
not obviously been credited as yet in any given taxable year.
 Withheld taxes can only be deducted from items of income
for the given and corresponding taxable period or year.
March 3, 2021 60
TREATMENT OF EXCESS
CWT
VAT Ruling No. 022-04 dated September 13, 2004
Held:
Cont’n.
 Taxpayer must file a written claim for refund or credit of
taxes remitted by its withholding tax agents within the 2-
year prescription period provided in Sec. 204 of the Tax
Code if it does not, in alternative, amend its returns to
reflect belatedly received CWT certificates on unreported
items of income during the taxable period or year involved.
March 3, 2021 61
TIMING OF
WITHHOLDING

WHEN DOES THE OBLIGATION
TO WITHHOLD ARISE?
 The obligation of the payor to deduct and withhold the tax
arises at the time an income payment is:
 paid, or
 payable, or
 accrued or recorded as an expense or asset, whichever
is applicable, in the Payor’s books
whichever comes first
(Section 2.57.4 of RR No. 2-98 as amended by Section 4 of RR No. 12-2001)
March 3, 2021 63
TO WITHHOLD ARISE?
DEFINITIONS:
“Payable” refers to the date the obligation becomes due,
demandable or legally enforceable.
Where income is not yet paid or payable, but the same has
been recorded as an expense or asset, whichever is
applicable, in the Payor’s books, the obligation to withhold
shall arise in the last month of the return period in which the
same is claimed as an expense or amortized for tax purposes.
(Section 2.57.4 of RR No. 2-98 as amended by Section 4 of RR No. 12-2001)
March 3, 2021 64
TO WITHHOLD ARISE?
RMC No. 10-2018, dated January 31, 2018:
Clarifying the Time of Withholding and Remittance of Taxes by
Withholding Agents (including Government)
Time of withholding:
The obligation of the payor to deduct and withhold the

tax arises at the time an income payment is “paid or
payable”, or their income payment is “accrued or
recorded” as an expense or an asset, whichever is
applicable, in the payor’s book, whichever comes first.
The term “payable” relates to the date the obligation
becomes due, demandable or legally enforceable.
March 3, 2021 65
TO WITHHOLD ARISE?
Under GAM (government accounting), it states:
“During the construction period, all expenses incurred

in relation to the construction of the PPE shall be taken
up in the books as “CIP” with the appropriate asset
classification. As soon as the construction is completed,
the CIP account shall be reclassified to the proper asset
account. Likewise, all expenses such as interest, license
fees, etc. during the construction period shall be
capitalized.”
March 3, 2021 66
TO WITHHOLD ARISE?
However, in the illustrative accounting entries in the GAM
itself, “Due to BIR” accounts were recognized only upon
payment of the accounts payable to income payee.
It is clarified that the obligation withhold taxes arises
already when an expense or asset is already recorded
whether or not the same has been paid, pursuant to RR No. 12-
2001;
In the case of government projects, the obligation to
withhold arises at the time the government agency, books
construction of PPE, as “CIP”, since what RR No. 12-2001
mandates is, whichever comes first.
March 3, 2021 67
Eg. CONSTRUCTION
SERVICES
Illustration 1: Construction Services (Calendar Year):
Assuming (for progress billings):
 Due Date for Payment is February 25
 Date of Payment is March 1
 Accrual of expense is March 25
 When to withhold? February 25, due date for payment
(when it becomes due and demandable)
March 3, 2021 68
Eg. CONSTRUCTION
SERVICES
Illustration 2: Construction Services (Calendar Year):
Assuming (for progress billings):
 Due Date for Payment is April 5
 Date of Payment is April 2
 Accrual of expense is March 25
 When to withhold? March 31, last month of the quarter
when the expense was claimed as expense –
March 3, 2021 69
Eg. RENTAL
Illustration 3:
ABC Corporation, a domestic corporation reporting income
and expenses on a calendar year basis rents office space at
P100,000/month.
The lease contract provides that rent shall be payable
quarterly, every 15th of the month following the end of each
calendar quarter.
ABC Corporation adjusts its books and accrues expenses every
end of the month. For the first quarter of the calendar year, ABC
Corporation paid rentals amounting to P300,000 on April 30.
March 3, 2021 70
Eg. RENTAL
Illustration 3:
Due Date: April 15
Date of Payment: April 30
Accrual of Expense: January 31
February 28
March 31
Claimed as income
tax deduction: March 31
When to withhold? March 31
March 3, 2021 71
Eg. RENTAL
Illustration 3: Assuming that the rentals for the first quarter
were paid on March 15.
Due Date: April 15
Date of Payment: March 15
Accrual of Expense: January 31
February 28
March 31
When to withhold? March 15
March 3, 2021 72
PAYMENTS
SUBJECT TO
EWT

EWT RATE, in general
 Not less than 1% but not more than 32% under NIRC;
 Under TRAIN Law:
 Effective January 1, 2018, not less than 1% but not
more than 20%;
 Beginning January 1, 2019, not less than 1% but not
more than 15%.
March 3, 2021 74
A-1. TAXABLE
INDIVIDUALS – 5%/10%
PAYEE TAX BASE RATE
A. Taxable Gross professional, 5% - If gross
Individuals promotional and talent fees, income for the
(New rates or any other form of current year did
and remuneration not exceed P3M
coverage)
10% - If gross
income is more
than P3M or VAT
registered,
regardless of
amount
March 3, 2021 75
WHEN TO APPLY 5% OR
10% EWT RATE
 For 5% to apply:
 Gross receipts/sales in a taxable year shall not exceed
P3M,
 Submit a sworn declaration of his/her gross
receipts/sales, together with a copy of COR, to all the
income payor/withholding agents not later than
January 15 of each year or at least prior to the initial
payment of the professional fees/commissions/talent
fees;
March 3, 2021 76
WHEN TO APPLY 5% OR
10% EWT RATE
 Apply 10% default EWT rate:
 The payee failed to provide the income
payor/withholding agent of sworn declaration; or
 The income payment exceeds P3M, despite receiving
the sworn declaration from the income payee.
 The payee is a VAT registered regardless of amount of
gross sales/receipts
March 3, 2021 77
WHEN TO APPLY 5% OR
10% EWT RATE
 Submission of the sworn declarations with the BIR:
 Income payors/withholding agents shall subsequently
execute a sworn declaration stating the number of
payees who have submitted sworn declarations,
together with the list of payees;
 WHEN: On or before January 31 of each year or 15 days
following the month when a new income recipient has
submitted the payee’s sworn declaration.
March 3, 2021 78
TAXABLE INDIVIDUALS
1. Those individually engaged in the practice of professions or
callings;
Eg., 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; interior
decorators, designers, real estate service practitioners (RESPs), (i.e.,
real 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
professions requiring government licensure examination regulated
by the PRC, Supreme Court, etc. This now includes medical
practitioners.
March 3, 2021 79
TAXABLE INDIVIDUALS
For professional fees paid to medical practitioners:
It shall be the duty and responsibility of the hospitals, clinics,
HMOs and similar establishments to withhold and remit taxes
due on the professional fees of their respective accredited
medical practitioners, paid by patients who were admitted and
confined to such hospitals and clinics.
Hospitals, clinics, HMOs and similar establishments must
ensure that correct taxes due on the professional fees of their
medical practitioners have been withheld and timely remitted to
the BIR.
March 3, 2021 80
TAXABLE INDIVIDUALS
For professional fees paid to medical practitioners:
For this purpose, hospitals and clinics shall not allow their
medical practitioners to receive payment of professional fees
directly from patients who were admitted and confined to such
hospital or clinic and, instead, must include the professional fees
in the total medical bill of the patient which shall be payable
directly to the hospital or clinic.
March 3, 2021 81
TAXABLE INDIVIDUALS
2. Professional entertainers, such as, but not limited to,
actors and actresses, singers, lyricists, 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;
7. Bookkeeping agents and agencies;
8. Other recipients of talent fees;
March 3, 2021 82
TAXABLE INDIVIDUALS
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.
10. Income Payments to certain brokers and agents (modified
and renumbered) — on gross commissions of customs,
insurance, stock, immigration and commercial brokers, fees
of agents of professional entertainers and real estate service
practitioners (RESPs), (i.e., real estate consultants, real
estate appraisers and real estate brokers) who failed or did
not take up the licensure examination given by and not
registered with the Real Estate Service under the
Professional Regulations Commission;
March 3, 2021 83
TAXABLE INDIVIDUALS
11. Commissions of independent and/or exclusive sales
representatives, and marketing agents of companies
(modified and renumbered) — on gross commissions,
rebates, discounts and other similar considerations
paid/granted to independent and/or exclusive sales
representatives and marketing agents and sub-agents of
companies, including multi-level marketing companies, on
their sale of goods and services by way of direct selling or
similar arrangements where there is no transfer of title over
the goods from the seller to the agent/sales representative;
March 3, 2021 84
TAXABLE INDIVIDUALS
 The amounts subject to withholding tax under shall include
not only fees, but also per diem fees, allowances and other
form of income payments not subject to withholding tax
on compensation.
 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 promotion.
March 3, 2021 85
TAXABLE INDIVIDUALS
RMC No. 72-04
Q14. Are honoraria paid to instructors of cooking lessons,
martial arts and various sports and health activities subject to
EWT?
A14. YES, they are considered talent fees subject to the 10%
(now 5%) EWT if current annual income of the instructor is
P720,000 (now P3M) and below; 15% (now 10%) if otherwise.
March 3, 2021 86
TAXABILITY OF JO OR
UNDER SCA
RMC No. 51-18
Definition:
“Professional” – refers to those individuals enumerated
under Sec. 2.57.2 (A)(1) of RR No. 2-98, as amended and as
defined under Sec. 2(n) of RR No. 8-2018.
“Other Service Provider or Supplier or Services” – shall refer
to those individuals who are NOT identified under Sec. 2.57.2
(A)(1) of RR No. 2-98 and who render services or labor-only for
a fee or under a contract for service.
March 3, 2021 87
TAXABILITY OF JO OR
UNDER SCA
RMC No. 51-18
Registration and Tax Compliance Requirements:
March 3, 2021 88
TAXABILITY OF JO OR
UNDER SCA
RMC No. 51-18
Documentary requirements:
With LONE payor With MULTIPLE payors
i. Copy of service contract showing the i. Follow the usual registration
amount of income payment; requirements/procedures
ii. Any identification issued by an ii. Additional requirement: Copy
authorized government body (e.g., of service contract showing the
birth certificate, passport, driver’s amount of income payment
license; CTC, etc.) that shows the
name, address and birthdate of the
applicant; and
iii. The BIR Officer shall add the words –
“Job Order” in the business name
field.
March 3, 2021 89
TAXABILITY OF JO OR
UNDER SCA
RMC No. 51-18
Illustration:
Facts:
Mr. Will, a messenger was hired by Brgy. MRU Health Center
under a JO arrangement;
His monthly pay is fixed at P15,000.
He provided MRU a sworn declaration of gross receipts;
Brgy MRU is the LONE income payor of Mr. Will
March 3, 2021 90
TAXABILITY OF JO OR
UNDER SCA
RMC No. 51-18
Illustration:
EWT to be withheld shall be computed as follows:
March 3, 2021 91
B-1. TAXABLE JURIDICAL
PERSONS – 10%/15%
PAYEE TAX BASE RATE
B. Taxable Gross professional, 15% - if the current
Juridical promotional and talent year’s gross income
Persons fees, or any other form of exceeds P720,000
remuneration for services 10% - if the current
year’s gross income
does not exceed
P720,000
Juridical persons – under Article 44 of the Civil Code, an association is

considered a juridical person if the law grants it a personality separate and
distinct from its members (e.g., Corporation as defined in Section 22(B) of
the Tax Code of 1997)
March 3, 2021 92
WHEN TO APPLY
10%/15% RATES
January to June:
10% (default rate at the beginning of every year)
15% when furnished copy of sworn declaration that gross
income of professional/talent/director has reached P720,000
15% even without sworn declaration, if the withholding
agent has made accumulated payments within the year
exceeding P720,000 to a particular payee
A sworn declaration together with COR shall be furnished to
the payor, not later than January 15 or before initial payment
is made.
March 3, 2021 93
WHEN TO APPLY
10%/15% RATES
Beginning July:
10% if furnished sworn declaration that gross income has
NOT reached P720,000
15% if furnished sworn declaration that gross income has
reached P720,000
15% if not furnished any sworn declaration
March 3, 2021 94
B. LESSORS OF REAL
AND PERSONAL
PROPERTIES
PAYEE TAX BASE RATE
B. Lessors of: Gross rental 5%
1) Real properties
2) Personal properties
3) Poles, satellites, and
transmission facilities
4) Billboards
5) Cinematographic film rentals
and other payments
March 3, 2021 95
RENTALS OF REAL
PROPERTY
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.
March 3, 2021 96
RENTALS OF REAL
PROPERTY
RR 16-13: Obligation to Deduct and Withholding the EWT on
Rental Payments to Exhibitor/Organizer for Sub-Leased Spaces
or Lessor/Owner of Leased Property.
"Privilege Store Operator" refers to the individual leasing

from the lessor/owner or subleasing from the "exhibitor" or
"organizer" a space upon which privilege stores are erected
for the purpose of selling goods or services during the entire
duration of the lease contract/s.
March 3, 2021 97
RENTALS OF REAL
PROPERTY
RR 16-13: Cont’n.
For this purpose:
Should the duration exceed a cumulative period of fifteen (15)
days in any taxable year, the person or entity shall be considered
habitually engaged in business and shall not be considered a
"privilege store operator" under these Regulations.
If the privilege store is operating more than one (1) business
activity in a separate venue or simultaneously operating several or
multiple business activities in one (1) venue, it shall be considered
one (1) day per business activity in the computation of cumulative
number of days in a given taxable year.
March 3, 2021 98
RENTALS OF REAL
PROPERTY
RR 16-13: Cont’n.
For this purpose:
Persons appearing to be doing business as privilege store
operators but who are disqualified under these regulations, i.e.,
they have operated for more than fifteen (15) days, shall be
registered with the Bureau of Internal Revenue (BIR) as regular
taxpayers. As such, they are required to have their own sets of
invoices and/or official receipts and pay taxes such as income tax,
business tax (percentage or value added tax) and remit withholding
tax, particularly on rental.
March 3, 2021 99
RENTALS OF REAL
PROPERTY
RR 16-13:
"Exhibitor" or "Organizer" refers to the primary lessee of the
entire space where the operations of privilege stores are held
by virtue of a lease contract executed between the owner of
the leased property and the organizer who subsequently sub-
leases the same to the privilege store operators during the
entire duration of the lease contract. In case the owner of the
real property is the one directly leasing to the privilege store
operator defined in Item (c) below, such owner shall be
constituted as the exhibitor or organizer for this purpose.
March 3, 2021 100

RENTALS OF REAL
PROPERTY
RR 16-13:
"Exhibitor" or "Organizer" refers to the primary lessee of the
entire space where the operations of privilege stores are held
by virtue of a lease contract executed between the owner of
the leased property and the organizer who subsequently sub-
leases the same to the privilege store operators during the
entire duration of the lease contract. In case the owner of the
real property is the one directly leasing to the privilege store
operator defined in Item (c) below, such owner shall be
constituted as the exhibitor or organizer for this purpose.
March 3, 2021 101

RENTALS OF REAL
PROPERTY
RR 16-13:
Obligations of the "Exhibitor" or "Organizer“
i. Obligation to post in a conspicuous place the certificate
of registration of the organizer – ie., In the area/space
devoted as privilege store (head office or branch).
ii. Obligation to deduct and withhold expanded
withholding tax on lease payments to the lessor of real
property.
iii. Obligation to inform Revenue District Office (RDO).
March 3, 2021 102

RENTALS OF REAL
PROPERTY
RR 16-13:
◦ Obligation to ensure presentation of TIN, presentation
of Official Receipts/Sales or Commercial Invoice,
Submission of Information Statement, the Remittance
of Actual Withholding Tax Liabilities by the
Lessees/Tenants Considered as Regular Taxpayers.
◦ Obligation to keep books of accounts and issue
receipts.
March 3, 2021 103

RENTALS OF REAL
PROPERTY
RR 16-13:
vi. Every Exhibitor/Organizer shall provide (1) Cash Register
Machines/Point of Sale (CRM/POS) for each privilege store
operator, or (2) centralized CRM/POS/Payment Centers, or
(3) allow the use of its own manual Official Receipts/Sales
or Commercial Invoices for the exclusive use by its
Privilege Store Operators to monitor the sales of the latter.
For this purpose, the relationship between the Exhibitor/Organizer and the Privilege Store
Operators who are not registered as regular taxpayer engaged in trade or business,
or BMBE, shall be that of consignor-consignee relationship. The consignee, for these
purposes, is only acting as "pass through entity" where the income on the sale is
ultimately taxed to the consignor.
March 3, 2021 104

RENTALS OF REAL
PROPERTY
RR 16-13:
vii. Obligation to ensure the submission of List of Sales
within Five (5) Days after the privilege store operation.
viii. Obligation to Report to the Bureau of Internal
Revenue Non-compliance by the Privilege Store
Operators/Lessees of their Obligations and
Responsibilities.
March 3, 2021 105

RENTALS OF REAL
PROPERTY
RR 02-11:
Responsibility and Reportorial Requirements of Owners of
Establishments for Lease. —
 Primary responsibility of all owners or sub-lessors of
commercial establishments/buildings/spaces to ensure
that the person intending to lease their commercial
space is a BIR-registered taxpayer.
 A BIR-registered taxpayer should have a TIN, a BIR
Certificate of Registration, and duly registered
receipts, sales or commercial invoices in compliance
with Secs. 237 and 238 of the Tax Code.
March 3, 2021 106

RENTALS OF REAL
PROPERTY
RR 02-11:
 Submission under oath (in hard and soft copies) of the
following information about the
establishment/building/spaces:
(a) Building/space layout of the entire area being leased
with proper unit/space address or reference;
(b) Certified True Copy of Contract of Lease per tenant;
and
(c) The Lessee Information Statement shall be presented
in the prescribed format.
March 3, 2021 107

RENTALS OF REAL
PROPERTY
RR 02-11:
 Cont’n. Every 31st of Jan. starting from the current
year (for tenants as of Dec. 31st of the previous year)
and 31st of Jul. starting from the current year (for
tenants as of June 30th of the current year).
March 3, 2021 108

RENTALS OF REAL
PROPERTY
INCOME PAYMENT EWT APPLICATION
1. Advance rentals Subject to EWT at the time of
payment (RR No. 2-98, as amended)
2. Subsequent rental Subject to EWT at the time paid,
payments payable, or accrued (last month of
the quarter claimed as expense),
whichever comes first (RR No. 2-98,
as amended)
3. Security deposits Subject to EWT at the time applied
as rentals
March 3, 2021 109

RENTALS OF PERSONAL
PROPERTY
2. Personal properties. – On gross rental or lease in excess of
Ten Thousand Pesos (P10,000) annually 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, except those under
financial lease arrangement with leasing and finance
companies authorized to operate under Republic Act No.
8556 (Financing Company Act of 1998).
March 3, 2021 110

RENTALS OF PERSONAL
PROPERTY
2. Personal properties. – On gross rental or lease in excess of Ten
Thousand Pesos (P10,000) annually 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, except those under financial lease
arrangement with leasing and finance companies authorized
to operate under Republic Act No. 8556 (Financing Company
Act of 1998).
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 5% withholding tax on the entire
amount.
March 3, 2021 111

RENTALS OF PERSONAL
PROPERTY
3. Poles, satellites and transmission facilities. – On gross
rental 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.
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.
March 3, 2021 112

RENTALS OF PERSONAL
PROPERTY
5. Cinematographic film rentals and other payments — On
gross payments to resident individuals and corporate
cinematographic film owners, lessors or distributors.
March 3, 2021 113

C. INCOME PAYMENTS TO
CERTAIN CONTRACTORS – 2%
PAYEE TAX BASE RATE
(1) General engineering contractors, whether
individual or corporate – Gross 2%
Those whose principal contracting business is in payment
connection with fixed works requiring
specialized engineering knowledge and skill
(e.g. Reclamation works; Railroads; Highways,
streets and roads; Tunnels; Airports and
airways; Waste reduction plants; Bridges,
overpasses, underpasses and other similar
works; Pipelines and other systems for the
transmission of petroleum and other liquid or
gaseous substances; Land leveling; Excavating;
Trenching; Paving; and Surfacing work.)
March 3, 2021 114

PAYEE TAX BASE RATE
(2) General building contractors, whether
individual or corporate – Gross 2%
Those whose principal contracting business is in payment
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 thereof (e.g., refineries, chemical
plants, etc.)
March 3, 2021 115

PAYEE TAX BASE RATE
(3) Specialty Contractors —
Those whose operations pertain to the Gross 2%
performance of construction work requiring payment
special skill and whose principal contracting
business involves the use of specialized
building trades or crafts.
March 3, 2021 116

PAYEE TAX BASE RATE
(4) Other contractors
(a) Filling, demolition and salvage work Gross 2%
contractors and operators of mine drilling payment
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;
March 3, 2021 117

PAYEE TAX BASE RATE
(e) Transportation contractors which include Gross 2%
common carriers for the carriage of goods and payment
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;
March 3, 2021 118
PAYEE TAX BASE RATE
(g) Messengerial, janitorial, private detective Gross 2%
and/or security agencies, credit and/or payment
collection agencies and other 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";
March 3, 2021 119

PAYEE TAX BASE RATE
(k) Labor recruiting agencies and/or "labor-only" Gross 2%
contractors. For this purpose, any person who payment
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;
March 3, 2021 120

PAYEE TAX BASE RATE
(l) Persons engaged in the installation of elevators, Gross 2%
central air conditioning units, computer payment
machines and other equipment and machineries
and the maintenance services thereon;
(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
services and other computer related activities;
(n) Persons engaged in landscaping services;
March 3, 2021 121

PAYEE TAX BASE RATE
(o) Persons engaged in the collection and disposal Gross 2%
of garbage; payment
(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.
March 3, 2021 122

D. INCOME DISTRIBUTION
TO THE BENEFICIARIES
PAYEE TAX BASE RATE
Beneficiaries of estates and trusts as determined
under Sec. 60 of the Code, except such income On income 15%
subject to final withholding tax and tax exempt distributed
income
March 3, 2021 123

E. INCOME PAYMENTS
TO PARTNERS OF GPP
PAYEE TAX BASE RATE
Partners of general Income payments made Fifteen percent
professional periodically or at the end of (15%), if the
partnerships the taxable year by a general gross income
professional partnership to for the current
the partners, such as year exceeds
drawings, advances, sharings, P720,000; and
allowances, stipends, etc. Ten percent
(10%), if
otherwise.
March 3, 2021 124

F. SELLERS OF REAL
PROPERTY
PAYEE TAX BASE RATE
F. Sellers of Real
Property other than
capital assets, sold
by an individual,
corporation, estate,
trust, trust fund or
pension fund AND
Where the selling price is:
1. Seller/transferor is
habitually engaged – P500,000 or less 1.5%
in real estate
business. – More than P500,000 but not 3.0%
more than P2,000,000
5.0%
– - More than P2,000,000
March 3, 2021 125

F. SELLERS OF REAL
PROPERTY
PAYEE TAX BASE RATE
F. Sellers of Real
Property other than
capital assets, sold
by an individual,
corporation, estate,
trust, trust fund or
pension fund AND
2. Seller/transferor is
NOT habitually Gross Selling Price 6%
engaged in real
estate business.
March 3, 2021 126

TAX BASE – SELLER OF
REAL PROPERTY
 Gross selling price is the consideration stated in the sales
document or FMV as determined by the Commissioner,
whichever is higher.
 In an exchange, the consideration is the FMV of the
property received in exchange.
 Real properties acquired by banks through foreclosure
sales are considered as their ordinary assets. However,
banks shall not be considered as habitually engaged in
the real estate business for purposes of determining the
applicable rate of withholding tax imposed under Sec.
2.57.2(J) of Revenue Regulations No. 2-98 , as amended.
(RR 7-03)
March 3, 2021 127

HABITUALLY ENGAGED IN
THE REAL ESTATE
BUSINESS
 Registration with the HLURB or HUDCC is sufficient to be
considered habitually engaged in the real estate business.
 In the absence of such registration, the buyer may offer
other evidence to prove that he/it is engaged in the real
estate business [e.g., at least six (6) taxable real estate
transactions in the preceding year].
 Banks shall not be considered as habitually engaged in real
estate business.
March 3, 2021 128

HABITUALLY ENGAGED IN
THE REAL ESTATE
BUSINESS
BIR Ruling No. 059-99 dated April 30, 1999:
The BIR ruled that even in the absence of registration with
HLURB and HUDCC, a person may also be treated habitually
engaged in the real estate business upon showing that he is in
fact actually engaged in the said business.
For example, a lessor of real properties may not be
registered with HLURB or HUDCC. Nonetheless, such lessor is
engaged in the lease of real properties, hence, embraced by
the provision “habitually engaged in the real estate business”.
March 3, 2021 129

SUMMARY – WITHHOLDING ON
SALE OF REAL PROPERTY
TYPE OF SALE BUYER TIMING OF WITHHOLDING
Installment Sales i. Engaged in Withhold EWT on every
(Payments in year trade or installment
of sale do not business
exceed 25% of the ii. NOT Withhold EWT on last
selling price) engaged in installment or installments
trade or immediately prior to last
business installment, if last
installment is not sufficient
to cover EWT.
March 3, 2021 130

SUMMARY – WITHHOLDING ON
SALE OF REAL PROPERTY
TYPE OF SALE BUYER TIMING OF WITHHOLDING
Installment Sales Engaged in Withhold EWT on first
(Payments in year of trade or installment
sale do not exceed business
25% of the selling NOT engaged Withhold EWT on first
price) in trade or installment
business
 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 fully paid.
March 3, 2021 131
ASSIGNMENT BY THE BUYER OF HIS
RIGHT OVER THE PROPERTY FOR A
CONSIDERATION
 If done upon completion of the payment of the
purchase price of real property classified as ordinary
asset, but before the execution of the Deed of Sale:
 Shall be considered a separate sale of real property
and, therefore, subject to EWT or to capital gains
tax, as the case may be.
 The taxes shall be withheld by the assignee of such
property based on the consideration per Deed of
Assignment or the fair market value of such
property at the time of assignment, whichever is
higher, and to the DST imposed under Sec. 196 of
the same Code using the same basis.
March 3, 2021 132
ASSIGNMENT BY THE BUYER OF HIS
RIGHT OVER THE PROPERTY FOR A
CONSIDERATION
 Real property purchased on installment covered by
Contract to Sell which was sold by the original buyer
before it was fully paid.
 Shall be taxable on the part of the original buyer
(now seller) based on the REALIZED GAIN.
 Realized Gain = Agreed Consideration minus
Amount Actually Paid by the Original Buyer
March 3, 2021 133

G. OVERTIME SERVICES OF
GOV’T PERSONNEL
PAYEE TAX BASE RATE
G. Additional income payments for Gross additional 15%
overtime of government payments
personnel from importers,
shipping and airline companies,
or their agents
For this purpose, the importers,

shipping and airline companies
or their agents, shall be the
withholding agents of the
Government;
March 3, 2021 134

G. OVERTIME SERVICES OF
GOV’T PERSONNEL
BIR RULING NO. 096-99, July 08, 1999
The flat rate of P600.00 to cover overtime services, transport,

lodging and meal allowances partakes the nature of a compensation,
embraced within the term compensation income, xxx subject to
withholding tax on wages under Section 79 in relation to Section
24(A) both of the Tax Code of 1997.
Furthermore, Section 2.57.2 of Revenue Regulations No. 2-98
implementing R. A. No. 8424.
March 3, 2021 135

H. PAYMENTS MADE BY
CREDIT CARD COMPANIES
PAYEE TAX BASE RATE
H. Business establishments on One-half (1/2) of 1%
payments made by credit card gross payments
companies for sale of
goods/services by each
business entity to cardholders
March 3, 2021 136

H. PAYMENTS MADE BY
CREDIT CARD COMPANIES
RMC No. 72-04 (Q&A 20):
Q20. If the payment for the purchase of goods or services to their

regular suppliers by the TTC/GO/LT is through credit card or through
company issued credit card to officers / employees for purposes of
reimbursements, will the TTC/GO/LT be required to withhold the tax when it
presents the credit card to the supplier?
A20. The TTC/GO/LT is not required to withhold the tax upon
presentation of the credit card to the supplier. The TTC/GO/LT,
however, is required to withhold the 2% EWT corresponding to the
interest payment and/or service fee and other charges imposed by
the credit card company. The credit card company on the other
hand, shall withhold 1% of 50% of the gross amount paid to any
business entity pursuant to Section 2.57.2(L) of RR No. 2-98, as
amended.
March 3, 2021 137
I. INCOME PAYMENTS MADE
BY TOP WITHHOLDING
AGENTS
PAYEE TAX BASE RATE
I. Income payments made by top withholding agents, either
private corporations or individuals, to their local/resident
supplier of goods and local/resident supplier of services other
than those covered by other rates of withholding tax, as
determined by the Commissioner:
 Supplier of Gross selling price, or total 1%
goods amount of goods or its
equivalent
 Supplier of Gross payments 2%

services
March 3, 2021 138

BY TOP WITHHOLDING
AGENTS
Top withholding agents shall include the following:
(a)Classified and duly notified by the Commissioner as either any of
the following unless previously de-classified as such or had already
ceased business operations:
1. A large taxpayer under Revenue Regulations No. 1-98, as
amended;
2. Top twenty thousand (20,000) private corporates under RR
No. 6-2009; or
3. Top five thousand (5,000) individuals under RR No. 6-2009.
(b)Taxpayers identified and included as Medium Taxpayers, and
those under the Taxpayer Account Management Program (TAMP).
March 3, 2021 139

BY TOP WITHHOLDING
AGENTS
 Notification. The top withholding agents by concerned
LTS/RRs/RDOs shall be published in a newspaper of general
circulation. It may also be posted in the BIR website. These
shall serve as the "notice" to the top withholding agents.
 The obligation to withhold under this sub-section shall
commence on the first (1st) day of the month following the
month of publication. Existing withholding agents classified
as large taxpayers, top 20,000 private corporations or top
5,000 individuals which have not been delisted prior to these
regulations shall remain as top withholding agents.
 The initial and succeeding publications shall include the
additional top withholding agents and those that are
delisted.
March 3, 2021 140

DEFINITION OF “LOCAL RESIDENT
SUPPLIERS OF GOODS/SUPPLIERS
OF SERVICES”
 The term "local resident suppliers of goods/suppliers of services"
pertains to a supplier from whom any of the top withholding
agents, regularly makes its purchases of goods/services.
 The term "regular suppliers," for purposes of these regulations,
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.
 This term does not include a casual purchase of goods/services,
that is, purchase made from a non-regular supplier and oftentimes
involving a single purchase.
 A single purchase which involves Ten thousand pesos (P10,000.00)
or more shall be subject to withholding tax.
March 3, 2021 141

SEMESTRAL LIST OF
REGULAR SUPPLIERS
 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.
March 3, 2021 142

J. INCOME PAYMENTS
MADE BY THE GOV’T
PAYEE TAX BASE RATE
J. Income payments made by a government office, national or local,
including barangays, or their attached agencies or bodies, and
government-owned or controlled corporations to its local/resident
supplier of goods/services, other than those covered by other rates of
withholding tax:
 Supplier of goods Gross selling price, or total 1%
amount of goods or its equivalent
 Supplier of Gross payments 2%

services
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 (I) hereof.
March 3, 2021 143

K. REFINERIES
PAYEE TAX BASE RATE
K. Refineries (refineries Gross processing / 5%
for the conversion of tolling fees paid
molasses to its by-
products and raw
sugar to refined sugar)
March 3, 2021 144

L & M. FUNERAL PARLORS AND
EMBALMERS
PAYEE TAX BASE RATE
L. Funeral parlors Gross payments 1%
(payments made by pre-
need companies)
M. Embalmers (for Gross payments 1%
embalming services
rendered to funeral
companies)
For purposes of these regulations, all income payments paid to sub-
agents or their equivalent, whether paid directly or indirectly by the
agent or the owner of the goods, shall be subject to withholding tax
in the same manner as that of the agent.
March 3, 2021 145

N. AGRICULTURAL
SUPPLIERS –
PAYEE TAX BASE RATE
N. Income payments made to agricultural Gross 1%
suppliers such as, but not limited to, payments
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, in excess of the cumulative
amount of Three Hundred Thousand Pesos
(P300,000.00) within the same taxable year.
March 3, 2021 146

N. AGRICULTURAL
SUPPLIERS –
RR11-2014
“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 cow, bull and calf, pig, sheep, goat and
other animals similar thereto. "Poultry" shall include fowl, duck,
goose, turkey and other animals similar thereto. "Marine product"
shall include fish and crustacean, such as but not limited to, eel,
trout, lobster, shrimp, prawn, oyster, mussel and clam, shell and
other aquatic products.
March 3, 2021 147

N. AGRICULTURAL
SUPPLIERS –
RR11-2014
Meat, fruit, fish, vegetable 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-pack and other similar
packaging method, shall still be covered by this subsection.
An agricultural food product shall include, but shall not be
limited to the following: corn, coconut, copra, palay, cassava,
coffee, etc. Polished and/or husked rice, corn grits, locally
produced raw cane sugar and ordinary salt shall be considered as
agricultural food products.
March 3, 2021 148

O. PURCHASES OF
MINERALS
PAYEE TAX BASE RATE
Purchases of minerals, mineral Gross payments 5%
products and quarry resources, such
as but not limited to silver, gold,
marble, granite, gravel, sand,
boulders and other
materials/products, defined and
discussed in Section 151 of the Tax
Code.
However, BSP is required to withhold
one percent (1%) of gross payments
made, and remit the same to the
Government.
March 3, 2021 149

P. MERALCO PAYMENTS
PAYEE/PAYOR TAX BASE RATE
1. MERALCO Payments on the Gross REFUND
following:
 Customers with active 25%

contracts as classified by
MERALCO
32%
 To Customers with
terminated contracts
March 3, 2021 150

P. MERALCO PAYMENTS
2. On interest whether paid Gross INTEREST
directly to the customers or
applied against customer's
billing:
 Residential and General
Service customers whose 10%
monthly electricity
consumption exceeds 200
kwh as classified by
MERALCO
20%
 Non-Residential customers
March 3, 2021 151

Q. REFUND OF ELECTRIC
DISTRIBUTION UTILITIES
On gross amount of interest Gross INTEREST
whether paid directly to the
customers or applied against
customer's billing:
(i)Residential and General Service
customers whose monthly 10%
electricity consumption exceeds
200 kwh as classified by the
concerned DU
(ii)Non-Residential
20%
March 3, 2021 152

R. CAMPAIGN
EXPENDITURES
1. Payments made by political parties Gross 5%
and candidates of local and national payments
elections on all their purchase of
goods and services related to
campaign expenditures;
2. Income payments made by individuals
or juridical persons for their purchases
of goods and services intended to be
given as campaign contributions to
political parties and candidates
March 3, 2021 153

S. INTEREST PAYMENTS
Interest income derived from any other Gross 20%
debt instruments not within the coverage INTEREST
of 'deposit substitutes' and Revenue
Regulations 14-2012, unless otherwise
provided by law or regulations
March 3, 2021 154

S. INTEREST PAYMENTS
Section 22 (Y), NIRC
The term 'deposit substitutes' shall mean an alternative form of
obtaining funds from the public (the term 'public' means
borrowing from twenty (20) or more individual or corporate
lenders at any one time) other than deposits, through the
issuance, endorsement, or acceptance of debt instruments for the
borrower's own account, for the purpose of relending or
purchasing of receivables and other obligations, or financing their
own needs or the needs of their agent or dealer.
Debt instruments issued for interbank call loans with maturity of
not more than five (5) days to cover deficiency in reserves against
deposit liabilities, including those between or among banks and
quasi-banks, shall not be considered as deposit substitute debt
instruments.
March 3, 2021 155
T. PAYMENTS TO REAL ESTATE
INVESTMENT TRUST
Income payments made to corporate Gross 1%
taxpayers duly registered with LTS-Regular payments
LT Audit Division as REIT for purposes of
availing the incentive provisions of
Republic Act No. 9856, otherwise known as
"The Real Estate Investment Trust Act of
2009", as implemented by RR No. 13-2011.
March 3, 2021 156

T. PAYMENTS TO REAL ESTATE
INVESTMENT TRUST
 "Real Estate Investment Trust" or "REIT" is a stock corporation
established in accordance with the Corporation Code of the
Philippines and the rules and regulations promulgated by the
Commission principally for the purpose of owning income-
generating real estate assets.
 For purposes of clarity, a REIT, although designated as a
"trust", does not have the same technical meaning as "trust"
under existing laws and regulations but is used herein for the
sole purpose of adopting the internationally accepted
description of the company in accordance with global best
practices.
March 3, 2021 157

U. PURCHASES OF
SUGAR
PAYEE TAX BASE RATE
AA. Purchases of sugar. GROSS PAYMENTS 1%
March 3, 2021 158

U. PURCHASES OF
SUGAR
RR 11-2014, RR 7-2015 and RR 13-2015
The following are required to withhold on the purchases of sugar
from the sugar planters on locally produced raw cane sugar, raw
sugar and molasses:
1.Proprietors or operators of sugar mills/refineries on their mill
share; and
2.Buyers of Quedans or Molasses Storage Certificates
For this purpose, the EWT base shall be based on the prices set by
the Regulations, depending on the prevailing market price of raw
cane sugar, raw sugar and molasses.
March 3, 2021 159

FILING AND
PAYMENT

MANNER AND VENUE
1. EFPS (using the BIR electronic system);
2. Manual filer:
i. File with the Authorized Agent Banks (AABs) under
the jurisdiction of the Revenue District Office where
they are registered.
ii. Withholding agents located at municipalities where
there is no AAB, the returns shall be filed with the
Revenue Collection Officer assigned in the said
municipality.
iii. In case of sale of real properties classified as
ordinary asset – AAB or RDO where the property
being transferred is located.
March 3, 2021 161
WHEN TO FILE AND PAY
 Filing and payment of the taxes withheld at source shall
be made not later than the last day of the month
following the close of the quarter during which the
withholding was made using BIR FORM NO. 1601EQ.
 For sale of real property considered as ordinary asset,
the remittance of tax withheld shall be made on or
before the tenth (10th) day following the month of
transaction using BIR FORM NO. 1606.
 The quarter shall follow the calendar quarter, e.g., for
taxes withheld during the quarter ending March 31, the
same shall be remitted by the withholding agent on or
before April 30.
March 3, 2021 162

WHEN TO FILE AND PAY
Attachments.
The return filed shall be accompanied by the Quarterly
Alphabetical List of Payees (QAP), reflecting the:
i. Name of income payees,
ii. Taxpayer Identification Number (TIN),
iii. The amount of income paid segregated per month
with total for the quarter, and
iv. The total amount of taxes withheld, if any.
March 3, 2021 163

MONTHLY FILING AND
PAYMENT
Advisory:
BIR Form No. 0619E/0619F - every tenth (10th) day of the
following month when the withholding is made, regardless
of the amount withheld.
EFPS filer - the due date is on the fifteenth (15th) day of the
following month.
Withholding agents with zero remittance are still required
to use and file the same form.
Rationale:
Taxes withheld by the withholding agents are held in trust for the
government and its availability is an imperious necessity to ensure sufficient
cash inflow to the National Treasury.
March 3, 2021 164
ADDITIONAL MODES OF
PAYMENT OF TAXES
RR 03-16:
Additional modes of payment of taxes:
i. Credit card
ii. Debit card
iii. Prepaid card
Payment of taxes by credit/debit/prepaid card shall be voluntary
or optional on the part of the taxpayer. As such, the taxpayer shall
bear the convenience fee and other fees being charged by banks
and/or credit card companies for the use of this payment facility;
and, that such fees, including the "Merchant Discount Rate"
(MDR), shall, in no case, be deducted from any amount of tax due
to the BIR.
March 3, 2021 165

ADDITIONAL MODES OF
PAYMENT OF TAXES
RR 03-16:
The authority to accept tax payments, thru credit/debit/prepaid
cards, and act as Acquirers shall be limited to AABs only.
The BIR shall neither have any responsibility nor liability on any
issues concerning the taxpayer-cardholder and the card issuer,
including, but not limited to, "charge back", erroneous posting or
charging, non-payment of the taxpayer-cardholder to the issuer,
and other issues.
In case the taxpayer-cardholder made erroneous tax payment
transactions through this prescribed payment mode, the same
shall not give rise to any automatic "charge back" to the taxpayer-
cardholder's account. In meritorious cases, the taxpayer shall apply
for refund/tax credit with the BIR in accordance with existing
revenue issuances.
March 3, 2021 166
ADDITIONAL MODES OF
PAYMENT OF TAXES
RR 03-16:
The payment of taxes through credit/debit/prepaid card, shall be
deemed made on the date and time appearing in the system-
generated payment confirmation receipt issued to the taxpayer-
cardholder by the AAB-Acquirer, provided that payment is actually
received by the BIR pursuant to these Regulations.
Payment not made. — Continuing liability of the taxpayer. —
The taxpayer is not relieved of, and has a continuing liability for,
such taxes until the payment is actually received by the BIR. This
continuing liability of the taxpayer is in addition to any liability of
the AAB-Acquirer pursuant to the Service Level Agreement
entered into by the BIR and the AAB-Acquirer.
March 3, 2021 167

STATEMENTS FOR TAXES
WITHHELD
1. Certificate of Taxes Withheld -
i. Form: BIR Form No. 2307/2306 in triplicate copies
ii. When: Within 20 days from the close of the quarter or
upon request of the payee to the payor, simultaneously
with the income payment
2. Annual Information Return of Creditable Taxes Withheld –
i. Form: BIR Form No. 1604E
ii. When: On or before March 1 of the following year in
which payments were made.
March 3, 2021 168

WITHHELD
2.1 Annual Information Return on Final Income Taxes Withheld
–
i. Form: BIR Form No. 1604CF
ii. When: On or before January 31 of the following year in
which payments were made.
March 3, 2021 169

WITHHELD
3. Certificate of Income Payment Not Subjected to
Withholding Tax (excluding compensation income)*
i. Form: BIR Form No. 2304 in triplicate copies
ii. When: January 31 of the year, following the year in which
the income is made
*(Not yet updated)
March 3, 2021 170

WITHHELD
3. Certificate of Income Payment Not Subjected to
Withholding Tax (excluding compensation income)*
i. Form: BIR Form No. 2304 in triplicate copies
ii. When: January 31 of the year, following the year in which
the income is made
*(Not yet updated)
March 3, 2021 171

END OF
PRESENTATION
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Expanded Withholding Taxes On Government Income Payments

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EXPANDED

II. Withholding Agents

III. Exemptions from Withholding

IV. Effects of Failure to Withhold EWT

VI. Tax Credit Mechanism

VII. Timing of Withholding

IX. Administrative Requirements

Expanded Withholding Tax 5

 A taxpayer, resident or non-resident who contributes to the

Expanded Withholding Tax 8

(RA 1051, effective June 12, 1954)

2. All government offices including government-owned

3. An individual with respect to payments in connection with

4. All individuals, juridical persons and political parties, with

All income payments which are required to be subjected to

Payments to utility companies which are required to be subjected

Payments made by persons who are sharing portions of the bill

 Hence, unjustifiable refusal of the seller income earner/payee

Purchases of the government that are covered by Purchase Orders

Purchases by any government official and employee recorded as

Expanded Withholding Tax 17

No withholding is required on income payments to the

A.National government and its instrumentalities, including

From the foregoing, it is clear that the Butanding Watching Activity

B.Persons enjoying exemption from payment of income taxes

The following are the conditions to qualify for as non-taxable JV:

Mr. Wil, a messenger, was hired by Brgy. MRU Health Center,

His monthly pay is fixed at P15,000.

He provided Brgy. MRU a notarized sworn declaration of gross

Q. How much tax shall be withheld from Mr. Will?

1. Labor, agricultural, or horticultural organization not organized

2.Mutual savings bank not having a capital stock represented by shares,

3.A beneficiary society, order or association, operating for the exclusive

4.Cemetery company owned and operated exclusively for the

5.Non-stock corporation or association organized and operated

6.Business league, chamber of commerce, or board of trade not

7.Civic league or organization not organized for profit but operated

8.A non-stock and non-profit educational institution;

9.Government educational institution;

10.Farmer’s or other mutual typhoon or fire insurance company,

11.Farmers’, fruit growers’, or like association organized and

The BTr, other government corporations and institutions and private

Consequently, the BTr, other government corporations and

Q27. Are services rendered by private hospitals and entities

Q33. Are payments made to companies registered with PEZA/BOI

A33. YES, on income payments arising from non-registered

Q32. Are payments made by TTC/GO/LT to cooperatives for the

Q23. Is the payment for membership dues of the TTC/GO/LT to

A23. YES, membership fees are considered services subjected to

Clubs which are organized and operated exclusively for pleasure,

The provision in the National Internal Revenue Code of 1977 which

Hence, the income of recreational clubs from whatever source,

The concerned withholding agents shall require all individuals and

The tax EXEMPTION CERTIFICATE OR RULING must explicitly

Failure on the part of the taxpayer to present the said tax

The withholding agent's failure to withhold notwithstanding the

Expanded Withholding Tax 43

Revenue Regulation No. 06-18

 Any income payment which is otherwise deductible under the