BIR Regs on Withholding of VAT and Percentage Tax

Applies to any person purchasing goods or services from non-VAT registered persons subject to 3% percentage tax under Section 116.
Non-VAT taxpayers have annual gross sales/receipts not exceeding P550,000 and have not opted for VAT registration.
Withholding agents must withhold 3% of gross sales/receipts and remit tax using BIR Form No. 1600.
Payee may opt for substituted filing of percentage tax return if having only one payor by filing "Notice of Availment" (Annex A).
Issuance of BIR Form No. 2306 (Certificate of Final Tax Withheld) to payee, which serves as substitute for the percentage tax return.
For payees with multiple payors, withheld tax may be claimed as credit using BIR Form No. 2307.
If gross receipts exceed P550,000, the payee must register as VAT taxpayer within one month after threshold is reached.

Taxes withheld must be remitted monthly using BIR Form No. 1600 within 10 days after month-end.
Returns are filed with Authorized Agent Banks (AAB) or Revenue Collection Officer (RCO) where applicable.
Electronic Filing and Payment System (EFPS) rules apply if enrolled.

Withholding agent issues BIR Form No. 2306 or 2307 as certificates of withheld tax.
Certificates signed by both withholding agent and payee affirm correctness of withholding.
Certificates serve as substituted official receipts for sellers of services covered by withholding.

Applies to purchases of goods or services from VAT-registered persons under Sections 106 and 108.
Withholding agent must withhold 10% VAT based on gross sales/receipts when payee executes "Waiver of Privilege to Claim Input Tax Credits" (Annex C) and opts to remit tax through withholding (Annex E).
Tax withheld is remitted using BIR Form No. 1600.
Substituted VAT return option applies for payees with only one payor upon filing of Notice of Availment (Annex B).
BIR Form No. 2306 and 2307 serve as certificates of withheld VAT.
Payees with multiple payors claim credits using BIR Form No. 2307.
Filing of monthly VAT Declaration (BIR Form No. 2550M) is dispensed with if all payors have withheld properly.

Withholding agents remit VAT withheld monthly within 10 days after the month using BIR Form No. 1600.
Returns are filed with AABs or RCOs depending on taxpayer classification and location.
EFPS standards apply if enrolled.

Withholding agents issue BIR Form No. 2306 or 2307 as official certificates of withheld VAT.
Certificates serve as substituted official receipts for sellers of services subject to VAT withholding.

VAT-registered sellers must comply with quarterly submission of summary lists of sales, domestic purchases, and importation under Revenue Regulations No. 8-2002.

Violations are subject to additions to tax and penalties as per Title X of the NIRC and its implementing rules.

Regulations take effect fifteen (15) days after publication in the Official Gazette or a newspaper of general circulation.