What is Expanded Withholding Tax?
The Withholding of Creditable Tax at Source or simply called Expanded Withholding Tax is defined as tax imposed and prescribed on the items of income payable to natural or juridical persons, residing in the Philippines, by a payor-corporation/person which shall be credited against the income tax liability of the taxpayer for the taxable year. In simple terms, it means advance payment of income taxes. The company receiving payment will not receive the entire amount for the service or goods it sold. Instead, the company making the payment (withholding agent) will withhold a certain percentage of the sales/service revenue amount generally 1% for goods and 2% for service and remit the amount to the Bureau of Internal Revenue. Note, however, that the Tax Code has set specific tax rates for specific entities (see www.bir.gov.ph for more details).
When to file
Filing for expanded withholding tax shall be 10th and 15th of the following month and quarterly.
BIR Forms
· 0619e – Also known as Monthly Remittance of Creditable Income Tax Withheld is being filed monthly to the BIR usually 10th or 15th of the month depending on the mode of filing (whether manual or electronic).
· 1601eq – Also known as Quarterly Remittance of Creditable Income Tax Withheld is being filed to the BIR for the quarter.
· 2307 – Otherwise known as Certificate of Creditable Tax Withheld at Source pertains to the form issued by the withholding agent to the company being paid as an evidence of amount withheld so that the payee company can use them as deduction when paying for income tax.
Need more information?
For more information regarding tax and accounting concerns please call as at 09363263875 or you may leave us a message here on our website https://annemiguelcpa.wixsite.com/website.
Comments