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

1. EXPANDED WITHHOLDING TAX Presented by:SUSAN D. TUSOY,CPA, MPSAsst. 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 & withholdRR 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

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 P300,000.00 within the same taxable year.

26. On Agricultural Products • 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

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 14-2002) • 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 28-2010) • * PCSO • 4. Gen. Professional Partnerships • 5. Joint ventures or consortium (RR 14-2002)

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/ email Submission thru esubmission@bir.gov.ph

39. THE END