Question & AnswerQ&A (BIR REVENUE MEMORANDUM CIRCULAR NO. 28-94)
The 'top 5,000 corporations' refers to corporations determined and notified in writing by the Commissioner of Internal Revenue to be among the largest 5,000 corporations in terms of income or size for the purposes of creditable withholding tax.
Income payments made by any of the top 5,000 corporations to their local suppliers of goods are subject to a one percent (1%) creditable withholding tax.
'Goods' refer to tangible personal property and do not include intangible personal property or real property.
Local suppliers of goods are suppliers from whom the top 5,000 corporations regularly make purchases of goods. Casual or single purchases generally do not qualify unless the purchase amount is P100,000 or more, in which case withholding tax applies.
No. A corporation is only considered a withholding agent upon written notification by the Commissioner that it has been selected as one of the top 5,000 corporations.
Corporations classified and notified as large taxpayers by the Large Taxpayers Division of the BIR are considered among the top 5,000 corporations but their authority as withholding agents starts only after receipt of written notice from the Commissioner.
The withholding agent must remit the taxes withheld and file the required withholding tax return within the tenth (10th) day of the month following the month when the income payments were made.
Withheld taxes should be remitted through duly accredited agent banks in NPCS-covered places, Collection Agents, or the treasurer of the municipality where the withholding agent's legal residence or principal place of business is located.
Withholding agents must submit a semestral list of their regular suppliers of goods to the Revenue District Office having jurisdiction over their principal place of business, with deadlines on June 30 and December 31 each year.