QuestionsQuestions (REVENUE REGULATIONS NO. 14-2018)
RR No. 14-2018 was promulgated pursuant to Section 244 in relation to Section 245 of the National Internal Revenue Code of 1997 (Tax Code of 1997), as amended.
RR No. 14-2018 amended the provisions of Sections 2 and 14 of RR No. 11-2018.
It renumbers and further amends Section 2.57.2 of RR No. 2-98 and incorporates the updated withholding tax rates and conditions for income payments.
The regulations cover professional fees, promotional fees, talent fees, and other forms of remuneration for services rendered, subject to the stated rules.
A 5% creditable withholding tax rate applies if the individual payee’s gross income for the current year does not exceed PHP 3,000,000.
A 10% creditable withholding tax rate applies when the individual payee’s gross income for the current year exceeds PHP 3,000,000.
If the payee is VAT-registered regardless of amount, the rate specified in the text is 10%.
A 10% creditable withholding tax rate applies if the non-individual payee’s gross income for the current year does not exceed PHP 720,000.
A 15% creditable withholding tax rate applies if the non-individual payee’s gross income for the current year exceeds PHP 720,000.
It provides a deadline and procedure for income recipients/payees who are subject to withholding tax under the amended rates but want to claim exemption from the prescribed withholding tax rates by submitting the required sworn declarations and documents.
The payee must submit on or before April 20, 2018 a duly accomplished “Income Payee as Sworn Declaration of Gross Receipts/Sales” together with a copy of the Certificate of Registration (COR) to the income payor/withholding agent.
On or before April 30, 2018, the payor/withholding agent must submit a duly accomplished “Income Payor/Withholding Agent as Sworn Declaration” together with the list of payees who submitted the payee declaration and copies of their CORs.
The excess withheld amount shall be refunded to the payee by the income payor/withholding agent.
The payor must reflect the refunded amount as an adjustment to the remittable withholding tax due for the first quarter return, and the adjusted withholding must also be reflected in the Alphabetical List of Payees attached to that return.
The list of payees subject to refund either due to the change of rates of withholding or due to qualification to avail of exemption must be attached to the return to be filed on or before April 30, 2018.
In no case shall the income payee use BIR Form No. 2307 twice for the same amount of income payment from the same income payor/withholding agent and for the same period.
It takes effect immediately.