1. EXPANDED WITHHOLDING TAX Presented by: SUSAN D. TUSOY,CPA, MPS Asst
EXPANDED WITHHOLDING TAX Presented by: SUSAN D. TUSOY,CPA, MPS Asst. Chief, Assessment Division

2. Persons Required to Deduct & withhold
Juridical persons, whether or not engaged in trade or business;
Individuals in connection with his trade or business, however, individual buyers of real properties are also constituted as withholding agents;
All government offices.

3. Persons Required to Deduct & withhold
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
the official receipts/invoices must be issued in the name of the person whom the former represents
The withholding tax certificate must be issued immediately

4. Persons Required to Deduct & withhold RR 30-2003
All income payments which are required to be subjected to WT shall be subject to the corresponding rate to be withheld by the person having control over the payment and who claims the expenses.
Utilities even if the meter or billing statement is not in the name of the payor
With valid proof like contract between registered user and payor

5. DIFFERENCE: FINAL AND CREDITABLE WITHHOLDING TAX
the amount of income tax withheld by the withholding agent is constituted as a full & final payment
taxes withheld are intended to equal the tax due of the payee on the said income
liability rests with the payor as withholding agent
the income recipient is still required to file an income tax return
payee is not required to file an ITR for the particular income

6. INCOME PAYMENTS SUBJECT TO EWT
DESCRIPTION
Professional
fees, talent fees,
etc., for services
rendered by
individuals
15% if gross income exceeds P720T
10% if otherwise
On the gross professional, promotional and talent fees or any other form of remuneration for the services rendered.
Those engaged in the practice of profession – all profession requiring gov’t licensure examination and/or regulated by PRC, Supreme Court, etc.
Including Real Estate Service Practitioners (Real Estate Consultants, Real Estate Appraisers and Real Estate Brokers –RR )
Professional entertainers
Professional athletes

7. INCOME PAYMENTS SUBJECT TO EWT
DESCRIPTION
Directors and producers of movies, stage, etc.
Insurance agents and adjusters
Management and technical consultants
Bookkeeping agents and agencies
Other recipients of talent fees
Fees of directors who are not employees of the company including per diems, allowances and any other form of income payments not subject to w/holding tax on compensation.

8. INCOME PAYMENTS SUBJECT TO EWT
DESCRIPTION
DISCLOSURE REQUIREMENT
Every individual shall periodically disclose his
gross income for the current year to the BIR by
submitting a Notarized Sworn Declaration to
the Collection Division of the Regional Office
having jurisdiction of the income earner in (3)
copies.

9. INCOME PAYMENTS SUBJECT TO EWT
DESCRIPTION
DISCLOSURE REQUIREMENT (CONT…)
Can also be filed by the income payor on behalf of the professionals/talents/directors whose services were being rendered exclusively to the aforesaid payor;
Should be filed on June 30 of each year or w/in 15 days after the end of the month the professional/talent/directors income reaches P720T, w/c ever comes first.

10. INCOME PAYMENTS SUBJECT TO EWT
DESCRIPTION
B. Professional Fees,
talent fees, etc., for
services of taxable
juridical persons
15% if gross income exceeds P720T
10% if otherwise
On the gross professional, promotional and talent fees or any other form of remuneration for the services rendered.

11. INCOME PAYMENTS SUBJECT TO EWT
DESCRIPTION
C. Rentals
1. On real properties – 5%
2. On personal properties - on gross rental
or lease in excess of P10,000 annually
(The P10,000 threshold shall not apply when the accumulated gross rental or lease exceeds or reasonably expected to exceed P10,000 within the year.)
“Reasonably expects” is determined when
it clearly shows in the documents like lease
contracts/agreement the amount to be
received within a given period.
3. Poles, satellites and transmission facilities – 5%
4. Billboards – 5%

12. INCOME PAYMENTS SUBJECT TO EWT
DESCRIPTION
D. Cinematographic
film rental and other
payments
Income Payments to
certain contractors
5% on gross payment
2% on gross payments of the ff:
1. General engineering contractors
2. General building contractors
3. Specialty contractors
4. other contractors
a. Filling, demolition, salvage work
contractors and operators of mine drilling
apparatus;
b. Operators of dockyards;

13. INCOME PAYMENTS SUBJECT TO EWT
DESCRIPTION
Other Contractors (con’t.)
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, where the gross payments
to the same payee amounts to at least P2,000/mo.
regardless of the number of shipments during the
month
f) Printers, bookbinders, lithographers and publishers
(with certain exceptions)
g) Messengerial, janitorial, private detective and/or
collection agencies and other business agencies

14. INCOME PAYMENTS SUBJECT TO EWT
DESCRIPTION
Other Contractors (con’t.)
h) advertising agencies, exclusive of gross payments to
media;
Independent producers of TV, radio and stage performances or shows;
j) Independent producers of “jingles”;
k) Labor recruiting agencies and/or “labor-only” contractors
l) Persons engaged in the installation of elevators, central
airconditioning units, computer machines and other
equipment and machineries and the maintenance
services thereon;

15. INCOME PAYMENTS SUBJECT TO EWT
DESCRIPTION
Other Contractors (con’t.)
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 services;
n) Persons engaged in landscaping services;
o) Persons engaged in 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.

16. INCOME PAYMENTS SUBJECT TO EWT
DESCRIPTION
Income distribution to the beneficiaries
G. Gross payments to
certain brokers and
agents (Refer to RR )
15% on the income distributed to the beneficiaries of estates and trusts
10% on gross commissions of customs, insurance, stock, immigration and commercial brokers, fees of agents of professional entertainers and RESPs who failed or did not take up the licensure examination

17. INCOME PAYMENTS SUBJECT TO EWT
DESCRIPTION
Income payments to
partners of general professional partnerships
On income payments made to partners such as drawings, advances, sharings, allowances and stipends
15% if gross income exceeds P720T
10% if otherwise

18. INCOME PAYMENTS SUBJECT TO EWT
DESCRIPTION
Professional fees paid to medical practitioners (includes doctors of medicine, doctors of veterinary science and dentists etc.)
- pls. refer to RR
15% if gross income exceeds P720T
10% if otherwise
On PF paid by hospitals or clinics, HMOs and similar establishments or paid by patients who were admitted and confined to such hospitals.
Hospital and clinics shall not allow medical practitioners to receive
payment of PF directly from patients who were admitted/confined to
such hospital and instead must include the PF in the total medical bill.
2. PF paid by HMOs to medical practitioners

19. INCOME PAYMENTS SUBJECT TO EWT
DESCRIPTION
It shall be the duty of the hosp./clinic/HMO to remit taxes withheld from professional fees
The W/tax shall not apply if there is proof that no PF has in fact been charged in a form of sworn declaration
The hosp shall inform the BIR about any medical practitioner who fails or refuses to execute the sworn declaration within ten days from occurrence.

20. INCOME PAYMENTS SUBJECT TO EWT
DESCRIPTION
Hospitals and clinics shall submit the names and address of medical practitioners every 15th day after end of each quarter using the prescribed format:
Medical practitioners whose PF was paid by the patients directly to the hosp/clinic
Medical practitioners who did not charge any PF

21. INCOME PAYMENTS SUBJECT TO EWT
DESCRIPTION
The hospitals and clinics shall be responsible for the accurate computation, timely remittance and issuance of withholding tax certificates every 20th day following close of the taxable quarter or upon request of the payee
All hospitals and clinics shall submit to the BIR a sworn statement as to the complete/updated list of medical practitioners accredited to them.

22. INCOME PAYMENTS SUBJECT TO EWT
DESCRIPTION
J. Gross selling price or total amount of consideration or its equivalent paid to seller/owner for the sale, exchange, or transfer of real property classified ad ordinary asset
Seller/transferor is exempt from Creditable Withholding Tax (CWT) in accordance with Sec of the regulation
Seller/transferor is habitually engaged in the real estate business:
Selling price is P500k of less %
SP <P500K but => P2M %
SP <P2M %
Seller/transferor is not habitually
engaged in the real estate business %

23. INCOME PAYMENTS SUBJECT TO EWT
DESCRIPTION
Additional income payments to gov’t. personnel from importers, shipping and airline companies
Certain income payments made by credit card companies
On gross additional payments to gov’t. personnel for overtime services as authorized by law %
1% on ½ of the gross amounts paid

24. INCOME PAYMENTS SUBJECT TO EWT
DESCRIPTION
Income payments made by the top 20K private corp. to their local/ resident supplier of goods/services other
than those covered by
other wtax rates
Supplier of goods – 1%
Supplier of services – 2%
Withholding tax on Agricultural Purchases in their original state shall apply only on excess of the cumulative amount of P300,000 within the same taxable year (RR ).

25. On Agricultural Products
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.

26. On Agricultural Products
Agricultural Products in their original state shall only include:
corn
copra
poultry and livestocks
rice
sugar cane
coffee
marine food products
coconut
vegetables
cassava
palay
fruits

27. INCOME PAYMENTS SUBJECT TO EWT
DESCRIPTION
Income payments made by the gov’t. to its local/resident supplier of goods/services other than those covered by other wtax rates
Supplier of goods – 1%
Supplier of services – 2%
Income payments, except any single purchase which is P10,000 and below, which are made by a gov’t. office on their purchases of goods and purchase of services from local resident suppliers.
GOCCs shall withhold taxes under Sec. N rather than Sec. M

28. INCOME PAYMENTS SUBJECT TO EWT
DESCRIPTION
Commissions of independent and/or exclusive sales representatives, and marketing agents and companies
Tolling fees paid to refineries
10% on gross commissions, rebates, discounts, and other similar considerations
5% on gross processing/tolling fees

29. INCOME PAYMENTS SUBJECT TO EWT
DESCRIPTION
Payments made by pre-need companies to
funeral parlor
Payments to embalmers
Income payments to suppliers of agricultural products
1% on gross payments
1% on gross payment
1% (suspended by RR )

30. INCOME PAYMENTS SUBJECT TO EWT
DESCRIPTION
Income payments on purchases to minerals, mineral products and quarry resources as defined and discussed in Sec. 151 of the Tax Code
MERALCO payments
Interest income on the refund paid either through direct payment or application against customers’ billing by other electric distribution utilities.
5% on income payments (RR )
10% / 20%

31. INCOME PAYMENTS SUBJECT TO EWT
DESCRIPTION
W. Income payments made by the top 5K individual taxpayers to their local/resident supplier of goods/services other than those covered by other w/tax rates (RR )
Individuals engaged in trade or business including non resident aliens engaged in trade or business in the Philippines.
Withholding tax on Agricultural Purchases in their original state shall apply only on excess of the cumulative amount of P300,000 within the same taxable year.
Supplier of goods – 1%
Supplier of services – 2%

32. INCOME PAYMENTS SUBJECT TO EWT
DESCRIPTION
X. Income payments made by political parties and candidates of local and national elections (RR )
On campaign expenses 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 – 5%

33. INCOME PAYMENTS SUBJECT TO EWT
DESCRIPTION
Y. Interest income derived from any debt instruments not within the coverage of “deposit substitute” (RR )
20%

34. Time of Withholding (RR 12-2001)
The obligation to deduct and withhold arises at the time an income payment is
paid or payable or
an income payment is accrued or recorded as an expense or asset in the payor’s book, whichever comes first.
The term payable refers to the date the obligation becomes due, demandable or legally enforceable.

35. Exemption from Withholding on Income Tax
Shall not apply to income payments made to the ff:
National gov’t. and its instrumentalities, including provincial, city or municipal governments and barangays except GOCCs (RR )
Persons enjoying exemption from payment of Income Tax
1. HLURB/HDUCC registered
BOI/PEPZ/SBMA/Omnibus Investment Code

36. Exemption from Withholding on Income Tax
3. Corporation which are exempt from Income Tax
* GSIS
* SSS
* PHIC
* Local Water District (RMC )
* PCSO
4. Gen. Professional Partnerships
5. Joint ventures or consortium (RR )

37. Requirements for Deductibility (RR 12-2013)
Any income payment allowable as deduction shall only be allowed to be deducted if:
The income tax required to be withheld has been paid to the BIR
No deduction shall be allowed notwithstanding payments of WTAX at the time of investigation

38. Annual Information Return
Manual Submission - 3 copies of 1604E Including the alphalist of income payees.
Softcopy/ Submission thru

39. THE END