1. RMC
Reiteration of the Applicable Penalties for Employers Who Fail to Withhold, Remit, Do the Year-End Adjustment and Refund Employees of the Excess Withholding Taxes on Compensation

2. Objective: 1. Withhold 2. Remit 3. Do the Year-End Adjustment
Emphasize the Employers to:
1. Withhold
2. Remit
3. Do the Year-End Adjustment
4. Refund employees of the excess
of the Withholding Taxes on Compensation
Sec. 80(A); Sec. 79(H); Sec. 24(A)

3. Sec. 80(A) NIRC, as amended Employer Withhold & Remit
Correct amount of tax
BIR

4. Sec. 79(H)
* On or before year end but prior to payment of the compensation for the last payroll period, the employer shall determine the tax due from each employee on taxable compensation income for the entire taxable year - Sec. 24(A).
*The difference of the tax due and tax withheld will either be withheld on Dec. or refunded to the employee not later Jan. 25, following year.

5. FORMS TO BE USED For Monthly Remittance:
COMPENSATION ==> BIR Form 1601C
For Annual Information Return:
COMPENSATION &
FINAL ===> BIR Form 1604CF
For Certificate of Taxes Withheld:
COMPENSATION ===> BIR Form 2316

6. Due Dates: January to November – On or before the 10th day of the following the month, whether W/A is LT or Non-LT (RR 6-01) December - On or before Jan. 15 of the following year, whether W/A is LT or Non-LT (RR 6-01) Annually - On or before Jan. 31 of the following year (RR 3-02)

7. Attachments Required:
Alphalist of Employees as of Dec. 31 with No Previous Employer within the Year;
Alphalist of Employees as of Dec. 31 with Previous Employer(s) within the year;
Alphalist of Employees Terminated before Dec. 31;
Alphalist of Employees Whose Compensation Income are Exempt from Withholding Tax but Subject to Withholding Tax
Alphalist of Employees other than Rank & File Who Were Given Fringe Benefits During the Year

8. Effectivity of Substituted Filing
Optional for taxable year 2001
Mandatory effective taxable year 2002

9. n n Preparation of BIR Form No. 1604 CF Employer files w/
START
Preparation of BIR
Form No CF
Before Jan. 31
Employer files w/
BIR the duly accomplished
BIR FORM 1604CF
On or before Jan 31
Subject to WTC?
Employer shall issue
2306to the payee (FWT) n
On or before Jan. 31
On or before April 15 y
Entitled to subs-
tituted filing? - n
Employee files ITR
together with 2316 &
other pertinent docs
Employer shall issue
2316 to employee y
Employer/employee to execute sworn
joint certification. Employer to furnish
employee copy of 2316/cert. to employee.
Employer to retain copy of joint cert.
On or before Jan. 31

10. Note:
An illustrative example on the year-end adjustment is shown under Sec. 2.79(B)(5)(b) of Revenue Regulations (RR) No. 2-98, as amended.

11. Failure to Comply
1. Non-withholding of tax - Employer fails to withhold the tax 2. Underwithholding - Employer fails to correctly withhold the tax 3. Non-remittance -Employer fails to remit total amount withhled

12. -Employer’s remittance is less than total amount withheld
4. Underremittance
-Employer’s remittance is less than total amount withheld
5. Late remittance
-Employer remits correct amount withheld beyond the due date
6. Failure to refund excess taxes withheld
-Employer ails to refund excess taxes withheld to its employees

13. Penalties for Non-Compliance:
1. Additions to the tax:
a. Sec. 248 – 25% of the amount due (failure)
50% of the amount due (fraud)
b. Sec. 249 – 20% interest per annum
c. Sec. 251 – other penalties + total tax not withheld
d. Sec penalties + refundable amount

14. 2. Criminal Liabilities: (upon Conviction)
a. Sec. 255 – other penalties + P10, imprisonment of 1 yr to 10 yrs
b. Sec. 256 – (Corp.) penalties + fine of P50,000 to P100,000
c. Sec. 272 – (Public Officers) penalties + fine of P to P50,000 or imprisonment of 6 mos. to 2 yrs, or both
d. Sec. 275 – (no specific penalty) fine of <P1,000 or imprisonment of < 6 mos. Or both

15. Note:
In certain instances as provided under Revenue Memorandum Order No , a compromise penalty in lieu of criminal liability may be imposed and collected.