QuestionsQuestions (BIR REVENUE REGULATIONS NO. 6 - 2009)
RR No. 6-2009 is promulgated pursuant to Section 244 of the Tax Code of 1997, in relation to Section 57(B) thereof, as amended. It amends RR No. 2-98 by adding criteria for determining the “Top 20,000 private corporations” (including a threshold on agricultural purchases) and by adding transactions subject to creditable withholding tax for payments made by the Top 5,000 individual taxpayers.
They are corporate taxpayers determined and notified by the BIR as having satisfied any of the enumerated criteria (e.g., being classified as a large taxpayer under RR No. 1-98 as amended; being in prior “top” lists; or meeting thresholds on VAT, income tax due, percentage tax, gross sales, gross purchases, or excise taxes for the preceding year).
For purchases involving agricultural products in their original state, the creditable withholding tax under the 1% rate applies only to purchases in excess of the cumulative amount of PHP 300,000 within the same taxable year.
The regulations specify corn, coconut, copra, palay, rice, cassava, sugar cane, coffee, fruits, vegetables, marine food products, poultry and livestocks.
Supplier of goods: 1% (creditable withholding tax). Supplier of services: 2% (creditable withholding tax). This applies to local/resident suppliers of goods and local/resident suppliers of services, except items covered by other withholding tax rates.
It is based on the cumulative amount of purchases involving agricultural products in their original state within the same taxable year. Withholding applies only to the portion exceeding PHP 300,000 (not necessarily each transaction individually).
Because the purchase amount (PHP 90,000) is below the cumulative threshold of PHP 300,000 within the same taxable year, so the portion subject to withholding is zero.
They are individuals engaged in trade or business or practice of profession who are determined and notified by the Commissioner as having met any of the criteria: VAT payment/payable (>= PHP 100,000), annual income tax due (>= PHP 200,000), percentage tax paid (>= PHP 100,000), gross sales (>= PHP 10,000,000), gross purchases (>= PHP 5,000,000), or excise tax payment (>= PHP 100,000) for the preceding year.
For resident citizens with multiple lines of business, tax payments, gross sales, and gross purchases are computed by considering all lines of business, since they declare income from all sources. For other individuals, only amounts derived in the Philippines are included for purposes of qualification.
For purchases involving agricultural products in their original state, withholding applies only to purchases in excess of the cumulative amount of PHP 300,000 within the same year; goods are subject to 1% EWT and services to 2% EWT.
“Regular suppliers” are those engaged in business or exercise of profession/calling with whom the taxpayer-buyer has transacted at least six (6) transactions, regardless of amount per transaction, either in the previous year or current year.
It is a supplier from whom Top 5,000 individual taxpayers regularly make purchases of goods. As a general rule, it does not include casual purchases from non-regular suppliers, often involving single purchases; however, a single purchase of goods other than agricultural products that is PHP 10,000 or more shall be subject to withholding.
An individual is not considered a withholding agent unless determined and duly notified in writing by the Commissioner that they are selected as one of the Top 5,000 Individual Taxpayers. They remain so unless the Commissioner issues a written notice that they cease to be one (e.g., delisting) or they submit closure/cessation notices and deletion is issued.
They must submit a list of regular suppliers of goods and/or services to the Revenue District Officer having jurisdiction over their principal place of business on or before July 31 and January 31 for the first and second semester, respectively, via diskette/CD format or through e-submission. The initial list is due within 15 days from receipt of the notice as Top 5,000.
Top 5,000 individual taxpayers engaged in trade or business or practice of profession are required to file returns and remit the taxes withheld through the Electronic Filing and Payment System (EFPS) pursuant to RR No. 9-2001, as amended.
It takes effect after fifteen (15) days following its publication in a newspaper of general circulation.