Covers percentage taxes on gross receipts from specified businesses:
- Restaurants, refreshment parlors, bars, cafes, clubs, caterers: 4% on food/refreshments, 8% on alcoholic beverages.
- Eating places within cockpits, cabarets, night/day clubs, Jai-Alai, race tracks: 12% (cockpit, cabaret, clubs), 25% (Jai-Alai, race tracks).
- Hotels, motels, lodging facilities: 12% on room occupancy.
- Garages, car rentals, transportation contractors, common carriers: 3% on gross receipts.
- Franchise holders:
  - Electric utilities, city gas, water: 2% (with exceptions for cooperatives).
  - Telephone, telegraph, radio, broadcasting: 3%.
  - Other franchises: 5%.
- Insurance businesses: 5% on total premiums collected (excluding reinsurance).
- Sellers with annual gross sales under P200,000 not registered for VAT: 2% on gross sales/receipts.
Withholding is not required for sellers exempted from VAT who elected to register and be taxed accordingly.

Payments to government agencies or instrumentalities performing governmental functions.
Payments to private individuals or entities exempt from applicable taxes with a valid certificate of exemption from the Commissioner of Internal Revenue or authorized representatives.

Caterers: Separate invoicing for food/refreshments and alcoholic beverages; withhold 4% or 8% respectively.
If sales of food and liquor not invoiced separately, entire payment subject to 8%.
Eating places linked to specific venues taxed at 12% or 25% on gross payments.
Hotels and lodging: based on gross money payments for room occupancy.
Common carriers and transportation contractors: based on gross payments.
Franchise taxes: based on gross payments to franchise holders.
Insurance premiums: based on gross premiums paid.
Percentage tax on VAT-exempt persons: based on gross quarterly sales or receipts.

Government offices/agencies prohibited from making money payments without previously deducting and withholding taxes.
Taxes withheld must be reported in Monthly Return of Internal Revenue Taxes Withheld on Government Money Payment (BIR Form 7.50A).
Payment to be made to the appropriate Revenue District Officer, Collection Agent, or authorized Treasurer.
Returns filed and payments made within 10 days after month-end.
Payment Acceptance Orders (PAO) used where bank payments authorized.
Confirmation Receipt or PAO number must be indicated in the return.

Withholding government entity to issue Certificate of Internal Revenue Taxes Withheld on Money Payments (BIR Form 7.50B) in triplicate.
Two copies given to payee upon payment or within 15 days after the calendar quarter.
Third copy retained by withholding entity as file copy.

Tax withheld and evidenced by the certificate is creditable against sales or percentage tax liabilities of the payee.
Payee must include withheld amount in gross sales or receipts in tax returns for the quarter or year.

Applies to government officers/employees responsible for withholding and remittance.
Penalties upon conviction include fines from P5,000 to P50,000, imprisonment from 6 months to 2 years, or both, plus dismissal from service.
Offenses include failure to deduct and withhold, failure to remit withheld taxes timely, and failure to file required returns or certificates.

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