BUREAU OF INTERNAL REVENUE Revenue District Office No.
5 WITHHOLDING Alaminos City
TAXES
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Importance of Withholding System
Encourages voluntary compliance cost of collection effort delinquencies and revenue
Reduces Prevents
loss
Prevents
dry spells in the fiscal condition of the government by providing revenues throughout the taxable year. 5/28/12
Withholding Agent
Is
any person or entity who is in control of the payment subject to withholding tax and therefore is required to deduct and remit the taxes withheld to the government. can be an individual, company, financial institution or government 5/28/12 agency
It
Duties and Obligation of a Withholding Agent
To To To To To
register deduct and withhold remit the tax withheld file withholding tax returns issue withholding tax certificate
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Types of Withholding Tax:
Expanded Withholding Tax Withholding on Compensation Final Withholding Tax Withholding on Government Money Payments
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Expanded Withholding Tax (WE)
Withholding
of
creditable
tax
at
source
Is
a tax imposed on and prescribed on the items of income payable to natural or juridical persons, residing in the Philippines which shall be credited against the income tax liability of taxpayer for the taxable year 5/28/12
Withholding on Compensation
Withholding
of tax on all remuneration for services performed by an employee for his employer under an employer-employee relationship unless exempted by the NIRC and pertinent laws.
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Final Withholding Tax
The
amount of income tax withheld by the withholding agent is constituted as a full and final payment of the income tax due from the payee on the said income. liability for payment of tax rests primarily on the payor as a withholding agent. payee is not required to file an 5/28/12 income tax return for the particular
The
The
Withholding on Government Money Payments
Constitutes
withholding of an amount on government money payments made on purchase of goods/services amount withheld on purchase of goods/services from VAT taxpayers is considered as final VAT withheld
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The
Withholding Tax Returns
Form
VAT
Form
1600- Monthly remittance of and other Percentage Taxes 1600 WP-Remittance return of percentage Tax on Winnings Prices of Racetrack Operators
and
Form
1601 C-Monthly remittance of income taxes withheld on compensation
Form
1601 E- Monthly return of 5/28/12 creditable Taxes Withheld
Form Form
1601 F- Monthly Remittance of Final Income Taxes Withheld 1602- Monthly Remittance of Final Income Taxes Withheld on Interest Paid on Deposits and Yield Deposits 1603- Quarterly Remittance of Final Income Taxes Withheld on Fringe Benefits paid to Employees Other than Rank and File 1606- Monthly Withholding Tax 5/28/12 Remittance Return for Onerous
Form
Form
Monthly Alphalist of Payees (MAP):
10 or less number of employees or payees
Manual Submission only- only three (3) copies of 1600/1601E/1601C + Alphalist of payees Manual Submission; Diskette Submission- Ten (10) or more number of employees or payees subject to creditable and final withholding tax are required to submit 3.5 inch floppy disk using: Excel Format (as provided under RR 7-2000) Own extract program Data entry module 5/28/12 Visual Fox Pro using
10 or more number of employees/payees
1. 2. 3.
Annual Returns:
Form
1604 CF- Annual Information Return of Income Taxes Withheld on Compensation and Final Withholding Taxes 1604 E- Annual Information Return of Creditable Income Taxes Withheld
Form
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Alpha list of Employees and Income Payees:
10 or less number of employees or payees
Manual Submission only- only three (3) copies of 1604CF/ 1604 E + Alpha list of employees and income payees Manual Submission; Diskette Submission- Ten (10) or more number of employees or payees subject to creditable and final withholding tax are required to submit 3.5 inch floppy disk using: Excel Format (as provided under RR 7-2000) Own extract program
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10 or more number of employees/payees
1. 2.
*A transmittal form issued by the RDO is given upon filing of the annual return
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Filing of Withholding Tax:
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Time of Withholding
A. .
Ordinarily, the obligation of the payor to deduct and withhold arises: At the time an income payment is paid or payable; and Income payment is accrued or recorded as an expense or asset, whichever is applicable in the payors books, whichever comes first When income is not yet paid or payable but has been recorded as an expense or asset, whichever is applicable in the payors books Last month of the return period in which the same is claimed as an expense or amortized for 5/28/12
B.
Time of Filing
For monthly withholding Within ten (10) days following the end of the month the withholding was MADE For Annual Information Returns 1604 CF + alphalist - Jan. 31 1604 E + alphalist - Mar. 1 5/28/12
Issuance of Certificates
Form 2304- Certificate of Income Payment not subject to Withholding tax 2305- Certificate of Update of Exemption and of Employer and Employees Information 2306- Certificate of Final Tax Withheld at Source 2307- Certificate of Creditable Tax Withheld at Source
Form Form Form Form
2316- Employers Certificate of Compensation Payment/ Tax Withheld
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Certificate of Compensation Payment/ Tax Withheld (2316)
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Certificate of Final Income Tax Withheld (2306)
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Certificate of Tax Withheld at Source/ Final VAT (2307)
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Computation of withholding tax on compensation
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Exemptions from withholding
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De minimis benefit not subject to withholding tax
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Sample problem:
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Requirement for deductibility
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Withholding on Government money payments
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Filing:
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Certificate of Tax Withheld
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Sec. 272 of NIRC
Violation of Withholding Tax Provision. Every officer or employee of the Government of the Republic of the Philippines or any of its agencies and instrumentalities, its political subdivisions, as well as government-owned or controlled corporations, including the Bangko Sentral ng Pilipinas (BSP), who under the provisions of this Code or rules and regulations promulgated thereunder, is charged with the duty to deduct and withhold any internal revenue tax and to remit the same in accordance with the provisions of this Code and other laws is guilty of any offense herein below specified shall , upon conviction for each act or omission be punished by a fine of Five thousand pesos (P5000) but not more that Fifty thousand 5/28/12
(a) Failure
or causing the failure to deduct and withhold internal revenue tax under any of the withholding tax laws and implementing rules and regulation; or causing the failure to remit taxes deducted and withheld within the time prescribed by law, and implementing rules and regulation; and
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(b) Failure
(c) Failing
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References:
National Internal Revenue Code of 1997 RR 2-98 as amended by RR 102008 Government Expense Chart RMC 23-2007
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