Creditable Withholding Tax on Income Payments by Top 20,000 Private Corporations
- Applies to income payments by Top 20,000 private corporations to local/resident suppliers of goods and services.
- Includes non-resident aliens engaged in trade or business in the Philippines.
- For agricultural products in their original state, withholding tax applies only when purchases exceed P300,000 per taxable year.
- Agricultural products covered include corn, coconut, copra, palay, rice, cassava, sugar cane, coffee, fruits, vegetables, marine food products, poultry, and livestock.
- Withholding tax rates:
- Supplier of goods: 1%
- Supplier of services: 2%
- Criteria to be included in Top 20,000 Private Corporations:
- Large taxpayer classification or inclusion in previous top taxpayer lists.
- VAT payment or payable of at least P100,000.
- Annual income tax due of at least P200,000.
- Percentage tax paid of at least P100,000.
- Gross sales of at least P10,000,000.
- Gross purchases of at least P5,000,000.
- Excise tax payment of at least P100,000.
- Illustrative examples clarify computation of withholding tax on agricultural purchases exceeding threshold.
Creditable Withholding Tax on Income Payments by Top 5,000 Individual Taxpayers
- Applies to income payments by Top 5,000 individual taxpayers engaged in trade/business or profession to their local/resident suppliers of goods and services.
- Non-resident aliens engaged in business included.
- Applies similarly to agricultural products exceeding P300,000 threshold per taxable year.
- Withholding tax rates:
- Supplier of goods: 1%
- Supplier of services: 2%
- Criteria for Top 5,000 Individual Taxpayers:
- VAT payment or payable of at least P100,000.
- Annual income tax due of at least P200,000.
- Percentage tax paid of at least P100,000.
- Gross sales of at least P10,000,000.
- Gross purchases of at least P5,000,000.
- Excise tax payment of at least P100,000.
- For resident citizens with multiple business lines, all lines are considered.
- For non-resident individuals, only income derived in the Philippines considered.
- Definitions:
- Goods: tangible personal property used in business or profession (excludes intangible and real property).
- Local/resident supplier of goods: regular supplier, not casual, typically with at least six transactions.
- Regular suppliers: suppliers with at least six transactions within current or previous year.
- Single purchases of goods (non-agricultural) of P10,000 or more are subject to withholding tax.
- The individual taxpayer becomes a withholding agent once formally notified and remains so unless notified otherwise.
- Procedures for submitting lists of regular suppliers to the BIR twice yearly, in prescribed formats.
- The Commissioner may amend criteria based on economic factors and conduct periodic reviews for delisting or inclusion.
Mandatory Electronic Filing and Payment
- Top 5,000 Individual Taxpayers must file returns and remit withheld taxes through the Electronic Filing and Payment System (EFPS).
- Compliance is pursuant to Revenue Regulations No. 9-2001 and its amendments.
Repealing Clause
- All existing revenue regulations or issuances inconsistent with these provisions are repealed or amended accordingly.
Effectivity
- The regulations take effect 15 days after publication in a newspaper of general circulation.