Professional Documents
Culture Documents
WITHHOLDING TAXES
Atty. Vic C. Mamalateo
May 14, 2015
ACPACI, Hotel Intercon, Makati City
SCOPE OF PRESENTATION
INCOME TAX (Title II, NIRC)
Class of taxpayer receiving income
Ordinary income tax on individuals, estates and trusts
Corporate income tax on corporations and partnerships
Residence of taxpayer receiving income
Resident taxpayer
Non-resident taxpayer
Nature of income
Compensation income and fringe benefits
Business or professional income and other income
Capital gain or passive investment income
SCOPE OF PRESENTATION
VALUE ADDED TAX (Title IV, NIRC)
Sale of taxable goods, property or services to
government
Payment to non-resident persons
PURPOSES
To improve tax administration; existence of audit trail thru the
withholding of advance income tax, although generally small in
amount, makes non- or under-reporting of income by recipient of
income difficult or capable of being discovered by BIR;
To improve liquidity of government;
It is easier to collect from thousands of big, registered WAs than from
millions of small, sometimes unregistered, recipients of income.
To ensure collection of income from non-resident taxpayers thru the
withholding tax system
TYPES OF WITHHOLDING TAXES
Final Withholding Tax (FWT)
Recipient is a resident person
Recipient is a non-resident person
TAXABLE
Partnerships, no matter how created or organized, other than GPP
If taxable, partnership is taxed like a corporation.
If taxable partnership derives net income during the year, the entire net
income is deemed received by the partners in the year it was earned by the
partnership.
If GPP adopts itemized deductions during the year, partners must use itemized
deductions during the same year.
RR 14-2013, Sept 20, 2013
(I) Prof fees paid to medical practitioners Any amount
collected for and paid to medical practitioners by hospitals
and clinics or paid directly to the medical practitioners by
HMO and/or similar establishments 15%, if income
exceeds P720,000; and 10%, if otherwise.
A. It shall be the duty of hospitals, clinics, HMOs and similar
establishments to withhold and remit taxes due on the prof fees
of their accredited medical practitioners, paid by patients who
were admitted and confined to them. For this purpose,
hospitals and clinics shall not allow their medical practitioners
to receive payment of prof fees directly from their patients who
were admitted and confined and, instead, must include the fees
in the total medical bill of the patient which shall be payable
directly to the hospital or clinic.
RR 14-2013, Sept 20, 2013
B. Exception. The WT shall not apply whenever there
is proof that no professional fee has been charged by
the medical practitioner and paid by his patient,
provided this fact is shown in a sworn declaration
jointly executed by the medical practitioner and the
patient or his auth representative, if minor or
otherwise incapacitated. Provided, further, the
administrator of the hospital or clinic shall inform the
RDO having jurisdiction about any medical
practitioner who fails or refuses to execute the sworn
statement, within 10 days from the occurrence of
such event.
RR 14-2013, Sept 20, 2013
C. Hospitals and clinics shall submit the names and addresses of
medical practitioners in the following classifications, every 15th day
after the end of every quarter, to Coll Div or LTDP&QAD or LTDO.
D. Medical practitioners shall include medical technologists, allied
health workers (e.g., occupational therapists, physical therapists,
speech therapists, nurses, etc) and other med practitioners who are
not under an employer-employee relationship with the hospital, clinic,
HMO or similar establishments.
Hospitals and clinics and HMOs shall be responsible for the accurate
computation and timely remittance of the withholding tax (10% or
15% EWT, whichever is applicable).
The hospital, clinic or HMO shall issue a Certificate of CTW (BIR Form
2307) to medical practitioners who are subjected to WT every 20th day
following the close of the taxable quarter or upon request of the
payee.
This regulation shall take effect on Oct 1, 2013.
TAX IMPLICATIONS OF RR 14-2013
PATIENT
VAT-registered person (e.g., practicing lawyer or employee of VAT-reg person-employer)
Non-VAT-registered person (e.g., employee or student/elderly)
MEDICAL PRACTITIONER
VAT-registered person or gross receipts exceed P1,919,500
Non-VAT-registered person
HOSPITAL/CLINIC
VAT-registered person
Non-VAT-registered person
TAX ISSUES:
eFPS Payment
On or before 15th day of month following withholding was made, except for December, on or
before Jan 20 of following year
In case of NGAs, all returns must be electronically filed and payment shall be made in same
day.
Sale to government
Payment to non-resident person
SEC. 114(C) WITHHOLDING OF VAT
The government or any of its political subdivisions,
instrumentalities or agencies, including GOCCs, shall,
before making payment on account of each purchase of
goods and services which are subject to VAT imposed in
Secs. 106 and 108 of this Code, deduct and withhold the
VAT due at the rate of 5% of gross payment thereof:
Provided, That the payment for lease or use of properties
or property rights to nonresident owners shall be subject to
12% VAT at the time of payment. For purposes of this
Section, the payor or person in control of the payment shall
be considered as the withholding agent.
The VAT withheld under this Section shall be remitted
within 10 days following the end of the month the
withholding was made.
WHO ARE REQUIRED TO FILE
BIR Form 1600?
All government offices on money payments made to private persons as required
under RA Nos. 1051, 7649, 8241, 8424 and 9337.
Payors of income subject to VAT to non-residents.
Payors of income to persons who opted to remits its/its VAT or OPT thru the
withholding and remittance of same by the WA.
Returns previously filed and proof of tax payments, if amended return
Certificate of tax treaty relief, if applicable
eTRA (previously TRA) for NGAs
BIR Form 0605, for advance payment
DEADLINE
10th day of following month, whether eFPS or manual filing and
payment
RELEVANT REV REGULATIONS
2015
RR
2014
RR 1-14, 2-14
2013
RR 1-13, 5-13, 10-13, 11-13, 13-13
2012
RR 3-12, 6-12, 8-12, 14-12, 16-12; RMC 41-12, 42-12, 81-12, 85-12
2011
RR 5-11, 7-11, 13-11; RMC 20-11, 23-11, 38-11, 49-11
2010
RR 11-10; RMC 21-10
RELEVANT REV REGULATIONS
2009
RR 1-09, 2-09, 3-09, 5-09, 6-09, 8-09, 10-09; RMC 4-09, 10-
09,
2008
RR 4-08, 5-08, 6-08, 7-08, 14-08, 10-08
2007
RR 4-07; RMC 23-07 (Govt money payments)
2006
RR 1-06, 2-06, 4-06
2005 (RA 9337)
RR 8-05
RELEVANT REV REGULATIONS
2004
RR 1-04, 3-04, 5-04
2003
RR 14-03, 16-03, 17-03, 30-03
2002
RR 3-02, 4-02, 14-02, 19-02, 26-02
2001
RR 6-01, 9-01, 12-01
2000
RR 8-2000, 10-2000
1999
RR 3-99
1998 (RA 8424)
RR 2-98, 3-98, 8-98, 10-98, 12-98
END OF PRESENTATION