Question & AnswerQ&A (KRI REVENUE REGULATION NO. 10-93)
The regulation governs the manner of withholding and remittance of taxes on payments made by the government for purchases of goods and services subject to value-added tax (VAT).
Government includes all departments, bureaus, offices, agencies, instrumentalities, local government units (provinces, cities, municipalities, barangays), and government-owned or controlled corporations (GOCCs) including their regional/district offices, branches, and units.
Contractors are all sellers of services to the government subject to 10% value-added tax under Section 102 of the NIRC, regardless of whether the service requires the exercise or use of physical or mental faculties.
The Head of Office refers to the highest executive officer of a government entity, such as the Secretary for a department, Regional Director for regional offices, Governor for provincial government, or Barangay Captain for barangays.
No, generally VAT on sales is not subject to withholding as the tax is not determinable at the time of sale. However, sales to the government that are subject to VAT are subject to withholding under RA 7649.
Withholding agents include Provincial Treasurers, City Treasurers, Municipal Treasurers, Barangay Treasurers, Treasurers of GOCCs, Chief Accountants or similar officials in national government offices. These agents must withhold the prescribed VAT before payment.
No, the responsibility and liability cannot be delegated to subordinate officials or employees.
For sale of goods, 3% on gross payments exclusive of the 10% VAT; for sale of services, 6% on gross payments exclusive of the 10% VAT.
The withholding tax is computed on the gross payment multiplied by the VAT fraction (10/11 for a 10% VAT rate) to get the net payment, then applying the withholding tax rate to this net amount.
The return must be filed and the tax remitted within ten (10) days following the end of the month when the withholding was made.
A Certificate of Value-Added Tax Withheld on Government Payments (BIR Form) must be furnished in quadruplicate; three copies are given to the seller by the 15th day of the following month and the fourth copy is kept by the withholding agent.
The tax withheld is creditable against the value-added tax liability of the payee/seller, provided that the payments are included in the seller's declared sales or receipts.
They may be fined from P5,000 to P50,000 or imprisoned from six months and one day to two years, or both, for each act or omission, including failing to deduct, remit, file returns, or issue certificates.
Yes, they may be personally liable for additions to the tax as prescribed in Sections 248, 249, and 247 of the NIRC.
They must submit the names of the officials charged with withholding duties to the Revenue District Officer within 30 days from effectivity and submit updates within 15 days of any change.
These regulations took effect on July 1, 1993.