Bureau of Internal Revenue Revenue Region 19 Davao City Expanded Withholding Tax Update

Top 20,000 Corporation (RR dated ) 2 Income payments made by the top 20,000 private corporations (before 10,000 corp.)  Supplier of goods - 1%  Supplier of services- 2%

Top 20,000 Corporation (RR dated ) 3  For purchases involving agricultural products in their original state, the tax required to be withheld shall only apply to purchases in excess of the cumulative amount of P300, within the same taxable year.

Illustration: Number of Transactions YearPurchase Amount One2009P 90,000 Two ,000 One ,000 One201290,000

Amount of EWT: In not subject In P20,000 x 1% = P In P100,000 x 2% = P1,000 In not subject

Top 20,000 Corporation (RR dated )  Agricultural Products in their original state shall only include: corn rice coffee coconut cassava fruits copra sugar cane marine food products vegetables palay poultry and livestocks

Top 5,000 Individual Taxpayer (RR ) 7 Income payments made by the top 5,000 individual taxpayer to their local/resident supplier of goods/services including non- resident alien engaged in trade or business in the Phils.  Supplier of goods - 1%  Supplier of services- 2%

8 Criteria for Top 20k Corp. and Top 5k Individual Taxpayers: Tax payments/payable of preceding year: VAT - P100,000 Income Tax- 200,000 Percentage Tax- 100,000 Excise Tax- 100,000 Gross Sales of P10,000,000 and above Gross Purchases of P5,000,000 and above Duly notified in writing by the Commissioner

Revenue Memorandum Circular No Prescribing the use of the Updated Government Money Payment Chart

CREDITABLEFINAL NATURE OF INCOME PAYMENT INCOME TAX % TAX VAT Communication Services (Smart, PLDT, etc) 2%3%5% Repairs and Maintenance of Gov’t. Facilities and Vehicles 2%3%5% Transport of Goods, Merchandise, Cargo domestic –air, sea & land (w/in the Phils) 2%3%5% domestic – air, sea & land (Phils to foreign country) 2%none Int’l. – air & sea (Phils. To Foreign)2%3%none

CREDITABLEFINAL NATURE OF INCOME PAYMENT INCOME TAX % TAX VAT Transport of Passengers: domestic –air, & sea (w/in the Phils) 2%none5% domestic – land (w/in the Phils) 2%3%none Int’l. – air & sea (Phils. To Foreign) 2%3%none Purchase of Supplies & Materials, including equipments 1%3%5%

CREDITABLEFINAL NATURE OF INCOME PAYMENT INCOME TAX % TAX VAT Payment for Rental of Properties 1. Real Property5%3%5% 2. Cinematographic films5%3%5% 3. Personal Property (in excess of P10,000 except financial leasing) 5%3%5% Payment for: a. Use or Lease of property or property rights to non-resident owner None 12% b. Services rendered by local insurance companies with respect to reinsurance premiums payable to non-residents None 12% c. Other services rendered in the Phils. by non-residentsNone 12%

CREDITABLEFINAL NATURE OF INCOME PAYMENT INCOME TAX % TAX VAT Payment to Water Distribution Utilities Manila Water Company, Inc.2%None5% Maynilad Water Services, Inc. (MWSI)*2%None5% *Income Tax Holiday up to Dec. 31, 2009 (BIR Ruling No. DA ) none 5% Other Water Utilities2% 5%

CREDITABLEFINAL NATURE OF INCOME PAYMENT INCOME TAX % TAX VAT Payment to Power Distribution Utilities2%None5% Meralco, VECO, etc. Electric Coops 1. Registered with NEAnone 5% 2. Registered with CDA a. Do not transact with non-membersnone 5% b. Transacting w/ members & non-mem b.1 With membersnone 5% b.2 With members and have an accumulated reserves and undivided net savings of not more than P10M none 5% b.3 With members and have an accumulated reserves and undivided net savings of more than P10M none 5%

CREDITABLEFINAL NATURE OF INCOME PAYMENT INCOME TAX % TAX VAT Payment to Cooperatives (other than Electric Cooperatives duly registered with CDA) SERVICES A. 1. With BIR issued exemption certificate -none 2. W/o BIR issued exemption certificate2%none5% GOODS B. 1. With BIR exemption certificatenone 2. Without BIR exemption certificate1%none5% Payment for Trainings and Seminars2%3%5% Purchase of Gasoline/Petroleum Products1%3%5% For Services Rendered by Gasoline Stations2%3%5%

CREDITABLEFINAL NATURE OF INCOME PAYMENT INCOME TAX % TAX VAT Payment of Insurance Premiums Non-Life2%3%5% Life2%5%none Payment for Purchase of Library Books1%noneNone Payment for Purchase of Other Library Materials 1%3%5% Payment for Services of the contractors: Security, Janitorial, Maintenance of aircon, computers, elevators, etc. 2%3%5% Payment of Professional Services rendered by GPP none3%5% Payment of Professional Fee paid to Juridical Person 10% or 15%3%5% Payment of Professional Fee paid to Individuals10% or 15% 3%5%

CREDITABLEFINAL NATURE OF INCOME PAYMENT INCOME TAX % TAX VAT Payment for Purchase of Other Goods (for casual or single purchase of P10k & above) 1%3%5% Payment for Purchase of Agricultural Products (except corn, coconut etc. per RR )1%none Payment of Commissions or Service Fees Paid to Customs, Insurance, Real Estate, Stock, Immigration and Commercial Brokers 10%3%5% Payment for Purchase of Services other than those covered by other rates of withholding tax (RR ) (for single or casual purchase or P10k & above) 2%3%5% For Purchase of Land Classified as Ordinary Asset 1.5%, 3%, 5% or 6% 3%5%

CREDITABLEFINAL NATURE OF INCOME PAYMENT INCOME TAX % TAX VAT For Land Improvements - goods -services 1% 2% 3% 5% For Buildings and Improvements Straight Contract (Labor & Materials) -Service 2%3%5% Separate Invoice/Billing for Materials-goods1%3%5% Separate Invoice/Billing for Labor2%3%5% For Furniture, Fixtures, and Equipment1%3%5% For Information Technology (IT) Equipment - Services - Goods 1% 2% 3% 5% Payment to Radio & TV Broadcasting Companies Whose Annual Gross Receipts do not exceed P10M and who are Non-VAT reg. TP 2%3%none Payment to Agents of Foreign Insurance Companies –Insurance Agents2%10%none

CREDITABLEFINAL NATURE OF INCOME PAYMENT INCOME TAX % TAX VAT Payment to Agents of Foreign Insurance Companies – Owner of the Property2%5%none Payment for Sale, barter or exchange of stocks Listed and traded through Local Stock Exchange 2% ½ of 1%none Payment for shares of stock sold or exchanged through initial and secondary public offering -not over 2% -over 25% but not exceeding 33 1/3% - Over 33 1/3% 2% 4% 2% 1% None none

CREDITABLEFINAL NATURE OF INCOME PAYMENT INCOME TAX % TAX VAT Payment to Banks and Non-Bank Financial Intermediaries performing quasi-banking functions (Sec. 121 of RA 8424 as amended by RA 9337) 1.On interests, commissions and discounts from lending activities as well as income from financial leasing, on the basis of remaining maturities of instruments from which such receipts are derived: - Maturity period is 5 years or less - Maturity period is more than 5 years 2. On dividends and equity shares and net income of subsidiaries 2% 5% 1% 0% None none None none

CREDITABLEFINAL NATURE OF INCOME PAYMENT INCOME TAX % TAX VAT 3.On the following payments treated as gross income under Sec. 32 of the Tax Code: -Royalties -Rental of Property -Profits for exchange and all other items treated as gross income None 5% none 7% None 4.On the net trading gains within the taxable year on foreign currency, debt securities, derivatives, and other similar financial instruments None7%None

22 Filing & Payment of Tax Returns Forms to be used:  1601C – for withholding tax on wages  1601E – for expanded withholding tax *  1601F - For final taxes withheld *  For Fringe Benefit Tax  For government money payments * * To be filed with Monthly Alphalist of Payees (MAP) under RR

23 Filing & Payment of Tax Returns Certificate to be issued to payees:  Form 2316 – for withholding tax on wages to be issued not later than Jan. 31 of the following year  Form 2304 – For income payment not subject to withholding tax  Form 2307 – for creditable withholding tax at source  Form 2306 – for final withholding tax

Sa Krisis Bayan Sagipin, Tamang Buwis Bayaran Natin! 24