TAX UPDATE
FOR THE
PhALGA
DESIGNATING THE APPROPRIATE WITHHOLDING AGENTS
& FIXED OFFICIAL RESPONSIBILITY
TO GOVERNMENT OFFICES
STATUTORY BASIS
EO 651
RR 1-87
RR 6-96
RR10-97
RMO14-98
OFFICERS & EMPLOYEES
REQUIRED TO DEDUCT & WITHHOLD
BARANGAY
BRANGAY
TREASURER
MUNICIPALITIES/ MUNICIPAL
CITIES
/CITY
BARANGAY
CAPTAIN
CHIEF
ACCOUNTANT
MAYOR
CHIEF
ACCOUNTANT
GOVERNOR
CHIEF
ACCOUNTANT
HEAD OF
OFFICE
TREASURER
PROVINCES
DEPARTMENTS
BUREAUS
GOCCS
OTHER GOVT
OFFICES
PROVINCIAL
TREASURER
(Official holding the
highest position such as
Secretary, Regional
Director, etc.)
Personally CHARGED with the duty to deduct,
withhold and remit taxes on compensation, expanded,
final and government money payments including
franchise taxes.
The responsibility and liability SHALL NOT BE
DELEGATED to subordinate officials and employees.
They shall be jointly and solidarily liable for the
additions to tax.
SUBMISSION OF NAMES
The names of the incumbents of such positions shall be
submitted by the head of office concerned to the Commissioner
of Internal Revenue within 30 days from receipts by such
office of notification requiring such information and any
changes of such incumbents shall be reported and the names of
replacements submitted within 10 days from such
change or replacements.
Any public officer or employee presently charged with the
responsibility to deduct, withheld and remit taxes but who does
not qualify under these regulations, shall be promptly replaced
by qualified officers or employees and their designation
submitted to the CIR thru the Revenue District
Officer where the government office is located
within the period prescribed in Sec 2b of RR 1-87 as amended.
.
Duties & Obligations of a Withholding Agent
To register
To deduct and withhold
To remit the tax withheld
To file withholding
tax returns
To issue withholding
tax certificate
MARIVICGALBAN- WITHHOLDING TAX DIV.
Kinds of Compensation
 Regular Compensation
includes basic salary,
fixed allowances
for representation,
for transportation and
others paid to an employee.
Kinds of Compensation
 Supplementary Compensation -includes payments
to an employee in addition to the regular
compensation as follows:
 Commission
 Overtime pay
 Fees, including director’s fees
 Profit sharing
 Monetized vacation leave
 Sick Leave
 Fringed benefit received by rank & file employee
 Hazard pay
 Taxable 13th month pay (in excess of P30,000)
 Other remuneration received from an employeeemployer relationship
th
13
month + other benefits
13th month
= one month basic salary
+ Other benefits
P30,000 non-taxable
Term “EMPLOYEE”
An individual performing services under an
employer-employee relationship. The term covers all
employees
including
officers
and
employees,
whether elected or appointed,
of the
Government of the Philippines, or any political subdivision
thereof or any agency or instrumentality.
Thus, the official and employees of the barangays are
employees of the Government and shall be subjected to
WITHHOLDING TAX, if applicable, pursuant to Section
79(A) of the Tax Code as implemented by Section 2.79(A) of
RR 2-98, as amended
EXEMPTION
Personal Exemption: P50,000;
Additional Exemption: P25,000
each but not
exceeding four
(4) Qualified
Dependent
Children
Qualified Dependent Child
A dependent means a
 legitimate,
 illegitimate or
 legally adopted child
chiefly dependent upon and
living with the taxpayer
if such dependent is not more than 21 years
of age, unmarried and not gainfully employed or
if such dependent, regardless of age, is
incapable of self-support because of mental or
physical defect.
The husband shall be the proper
claimant of the additional exemption for
qualified dependent children unless he
explicitly waives his right in favor of his wife in the
 Application for Registration for Individuals (BIR Form No. 1902) or
 Certificate of Update of Exemption and of Employer’s and
Employee’s Information (BIR Form No. 2305).
Provided, however, that where the spouse of the employee:
 is unemployed or
 is a non-resident citizen deriving income from foreign sources,
the employed spouse within the Philippines shall be
automatically entitled to claim the additional exemptions for
children.
Annualized Withholding Tax
(Year-End Adjustment)
PURPOSE:
TAX DUE = TAX WITHHELD
WHEN:
• On or before the end of the calendar year,
prior to the payment of compensation for the last
payroll period.
• If terminated (e.g. resigned, retired, death etc),
on the day on which the last payment of
compensation is made.
Annualized Withholding Tax
Gross Compensation Income (present + previous employer)
P xxx
Less: Non-taxable/Exempt Compensation Income
a.) 13th month pay and other benefits
30,000
b.) Other non-taxable benefits incl. de-minimis
xx
c.) SSS, GSIS,PHIC, HDMF& Union Dues (employees share only) xx
xxx
Less:
a.) Personal and additional exemption
b.) Health /Hospitalization premium payment
Taxable Compensation Income
Tax Due
Tax Withheld
(Jan. – Nov.
OR
termination date)
(if applicable)
xx
xx
xxx
xxx
xxx
xxxx
====
Collectible: Tax due > tax withheld
Collect before payment of last wage
Refund:
Tax due < tax withheld
Refund on or before Jan. 25th of the
year /last payment of wage
Break even: Tax due = tax withheld
Do not withhold for December salary
Requisites for individuals qualified for substituted filing
and must not file BIR Form No. 1700
1. Receiving purely compensation income regardless of amount;
2.. Working for only one employer in the Philippines for the
. calendar year;
3. Income tax has been withheld correctly by the employer (tax due
equals tax withheld);
4. The employee’s spouse also complies with all
the three conditions stated above;
Employer filed to BIR Form 1604-CF with Alphalists of
employees ;
6. The employer issues each employee BIR Form No. 2316 (October
5.
2002 ENCS or any later version).
Note:
All of the above requisites must be present. The Annual Information Return of Income
Taxes Withheld on Compensation and Final Withholding Taxes (BIR Form No. 1604-CF) filed by
their respective employers duly stamped “Received”, shall be tantamount to the substituted
filing of income tax returns by said employees.
USES of BIR Form 2316 (substituted ITR)
1. Proof of financial capacity for purposes of
.
loans, credit card, or other applications;
.
2. Proof of payment of tax or for availing tax
credit in the employee’s home country;
3. Securing travel tax exemption, when
necessary;
4. Other purposes with various government
agencies
.
Revenue Regulations No. 11-2013
dated May 20, 2013
Subject: Filing/Submission of Hard Copy of the
Certificate of Compensation Payment/Tax
Withheld (BIR Form 2316) Covering
Employees Who are Qualified for Substituted
Filing, thereby Amending Revenue
Regulations (RR) No. 2-98, as last amended
by RR No. 010-08.
Section 2.83 of RR 2-98, as amended, is hereby further amended to read
as follows:
"Sec. 2.83. Statements and Returns. —
Section 2.83.1.Employees Withholding Statements (BIR Form No. 2316).
— In general, every employer or other person who is required to deduct
and withhold the tax on compensation including fringe benefits given to
rank and file employees, shall furnish every employee from whose
compensation taxes have been withheld the Certificate of Compensation
Payment/Tax Withheld (BIR Form No. 2316) on or before January 31 of
the succeeding calendar year, or if employment is terminated before the
close of such calendar year, on the day on which the last payment of
compensation is made.
Employers of MWEs are still required to issue BIR Form No. 2316 (June
2008 Encs version) to the MWEs on or before January 31 of the following
year.
However, in cases covered by substituted filing, the
employer shall furnish each employee with the original copy of BIR
Form No. 2316 and file/submit to the BIR the duplicate copy not
later than February 28 following the close of the calendar year.
Penal Provisions - under Section 250 of the Tax Code ,
for failure to file information penalty of P1,000 for each
such failure but not to exceed P25,000 a year.
Section 255 any employer/withholding agent,
including the government or any of its political subdivisions
and government owned and controlled corporations,
who/which fails to comply
with the above filing/submission of BIR Form 2316 within the
time required by this Regulations for two consecutive
years. upon conviction thereof, be punished by a fine of not
less than Ten Thousand Pesos (P10,000.00) and suffer
imprisonment of not less than one (1) year but not more
than ten (10) years.” In settlement under this situation, the
compromise fee shall be P1,000 for each BIR Form No. 2316
not filed without any maximum threshold
CREDITABLE / EXPANDED
WITHHOLDING TAX
Under this system, taxes withheld are
intended to EQUAL or AT LEAST
APPROXIMATE THE TAX DUE
payable of the payee on the income
payment. The tax withheld is credited
against the final tax liability in the tax
return filed by the payee.
Income payments made by
the GOVERNMENT
to its local/resident supplier of goods
and local/resident supplier of services
other than those covered by other rates
of withholding tax
1%
PURCHASE OF GOODS
2%
PURCHASE OF SERVICES
* GOCCs shall withhold in their
capacity as government.
N. INCOME PAYMENTS MADE BY THE GOVERNMENT
Purchase of goods
1%
Purchase of service
2%
EXCEPT ANY CASUAL/ SINGLE PURCHASE OF P10,000 & BELOW
•local/resident suppliers of goods
•local/resident supplier of services
other than those covered by other rates of withholding tax
REGULAR SUPPLIERS • engaged in business or exercise of profession/calling
• at least six (6) or more transactions regardless of amount
per transaction, either in the previous year or current year
CASUAL SUPPLIERS
• non-regular or single purchase
P10,000 or more
- taxable
GOVERNMENT OFFICE
• national
LGU
GOCC
attached agencies/bodies
GOCC shall withhold under (N) rather than as corporation under (M)
RMC NO. 23-2007 – MARCH 20, 2007
COMPUTATION OF WTs ON GOVT MONEY PAYMENTS
5% FINAL VAT
3% PERCENTAGE TAX
1% EWT ON PURCHASE OF GOODS
2% EWT ON PURCHASE OF SERVICES
BASIS:
1) GOVT PURCHASES FROM VAT REGISTERED SUPPLIERS
ALWAYS NET OF VAT IMPOSED ON THE SAID
PURCHASES OF GOODS AND/OR SERVICES
2) GOVT PURCHASES FROM NON-VAT REG SUPPLIERS
ON INVOICE AMOUNT
WHAT ARE COVERED?
ALL PURCHASES OF THE GOVERNMENT THAT
ARE COVERED BY PURCHASE ORDERS DULY
SIGNED BY THE AUTHORIZED OFFICIALS AS
WELL AS PURCHASES USING THE PETTY CASH
FUND.
WHAT ARE NOT COVERED?
PURCHASES BY ANY GOVT OFFICIAL AND
EMPLOYEE RECORDED AS REIMBURSABLE
ALLOWANCE, BENEFIT OR INCENTIVE TO GOVT
OFFICIAL AND EMPLOYEE BY THE CONCERNED
GOVT OFFICE (EX. RATA)
Example for VAT:
a)
Purchase of Goods
Selling Price
Output VAT (P1,000.00 x 12%)
Invoice Amount
Less:
5% withholding of final VAT
(P1,000.00 x 5%)
1% withholding of Income Tax
(P1,000.00 x 1%)
P 1,000.00
120.00
P 1,120.00
50.00
10.00
Amount Payable to supplier of Goods P 1,060.00
C O M P U T A T I O N
(VAT registered payee -professional)
NEW BILLING REQUIREMENT
VAT SEPARATELY BILLED
GROSS
ADD: 12% VAT
GROSS BILLING
less: EWT 10% x 100,000
NET AMOUNT DUE
P100,000
12,000
P112,000
10,000
P102,000
Example for Non-VAT:
a)
Purchase of Goods
Selling Price
Less:
3% withholding of Percentage Tax
(P1,000.00 x 3%)
1% withholding of Income Tax
(P1,000.00 x 1%)
P 1,000.00
Amount Payable to the supplier of Goods P
30.00
10.00
960.00
VAT SALES
INVOICE (SI) /
Sale of GOODS
or properties
CASH INVOICE (CI)
VAT OFFICIAL
RECEIPT (OR)
Sale of
SERVICES or
lease of goods
or properties
FORMS TO BE USED AND DEADLINES
5% FINAL VAT
3% PERC TAX
1% EWT ON GOODS
2% EWT ON SERVICES
BIR FORMS
BIR FORM 1600
BIR FORM 2306
DEADLINES
10TH DAY/JAN 15
20TH DAY after the end of the
qtr./upon demand
BIR FORM 1600
BIR FORM 2307
10TH DAY/JAN 15
20TH DAY after the end of the
qtr./UPON DEMAND
BIR FORM 1601E
BIR FORM 2307
10TH DAY/JAN 15
20TH DAY after the end of the
qtr./UPON DEMAND
BIR FORM 1601E
BIR FORM 2307
10TH DAY/JAN 15
20TH DAY after the end of the
qtr./UPON DEMAND
Monthly Alphalist of Payees
(MAP)

is a consolidated alphalist of income earners
from whom taxes have been withheld by the payor
of income for a given return period and in whose
behalf, the taxes were remitted.

It contains a summary of information on taxes
withheld and remitted through the monthly
remittance returns
(BIR Form Nos. 1601-E,
1601-F, 1600) showing , among others,
 total amounts of income/gross sales/gross receipts and
 taxes withheld and remitted.
FORMAT
Annex “B”
BIR REGISTERED NAME
TRADE NAME
ADDRESS
TIN
MONTHLY ALPHALIST OF PAYEES (MAP)
RETURN PERIOD (mm/yyyy)
TIN
Seq
no.
1
Including
branch
code
Registered Name
(Alphalist)
3
Return
period
mm/yy
4
ATC
5
Nature of income
payment
6
AMOUNT
Tax base
7
Tax rate
8
Tax Withheld
9
2
1
2
3
4
5
TOTAL
AMOUNT
P
I declare under the penalties of perjury, that this has been made in good faith, verified by me, and to the best of my knowledge and
belief, is true and correct pursuant to the provisions of the NIRC, and the regulations issued under the authority thereof; that the information
contained herein completely reflects all income payments with the corresponding taxes withheld from payees are duly remitted to the BIR and
proper Certificates of Creditable Withholding Tax at Source (BIR Form Nos. 2304/2307/2306/2316) have been issued to payees; that, the
information appearing herein shall be consistent with the total amount remitted and that, inconsistent information shall result to denial of the claims
for expenses.
__________________________
Signature over printed name
Taxpayer/Authorized representative
Attachments to BIR Form Nos. 1601-E, 1601-F, 1600
RETURNS with
Annual Alpahists of Employees / Payees
BIR Form No. 1604-CF + Alphalists of
Employees
(due January 31)
BIR Form No. 1604-E + Alphalists of
Payees
(due March 1)
RETURNS with
Monthly Alphalists of Payees (MAP)
BIR Form No. 1601-E + MAP
BIR Form No. 1601-F + MAP
BIR Form No. 1600
+ MAP
REVENUE REGULATIONS NO. 1-2014
SUBJECT : Amending the Provisions of Revenue Regulations (RR) No. 2-98, as Further
Amended by RR No. 10-2008, Specifically on the Submission of
Alphabetical List of Employees/Payees of Income Payments.
“Section 2.83.3 Requirement for list of payees – All
withholding agents
shall, regardless of the number of employees and payees,
whether the employees/payees are exempt or not, submit
an alphabetical list of employees and list of payees on
income payments subject to creditable and final withholding
taxes which are required to be attached as integral part of
the Annual Information
Returns (BIR Form No. 1604CF/1604E) and Monthly
Remittance Returns (BIR Form No. 1601C, etc.), under the
following modes:
1) As attachment in the Electronic Filing and
Payment System (eFPS);
(2) Through Electronic Submission using the
BIR’s website address at
esubmission@bir.gov.ph; and
(3) Through Electronic Mail (email) at dedicated
BIR addresses using the
prescribed CSV data file format, the details of
which shall be issued in
a separate revenue issuance.”
“Accordingly, the manual submission of the alphabetical
lists containing less than ten (10) employees/payees by
withholding agents under Annual Information Returns BIR
Form No. 1604CF and BIR No. 1604E shall be immediately
discontinued beginning January 31, 2014 and March 1,
2014, respectively, and every year thereafter.”
PENALTIES. – Any violation of these Regulations shall be
subject to the corresponding penalties under the pertinent
provisions of the NIRC of 1997, as amended, and
applicable regulations.
DATA ENTRY MODULE
preparation of MAP / SAWT
DOWNLOAD:
www.bir.gov.ph
 IMPORT FACILITY( conversion to flat files)
 TIN LIBRARY (auto populate of registered name)
 AUTOMATIC CALCULATIONS (indicate tax base
& ATC, system auto compute vertical and horizontal summation)
 AUTOMATIC PREPARATION &
PRINTING OF CERTIFICATE – BIR FORM
NO. 2307 /2316
 AUTOMATIC PREPARATION & PRINTING
OF RETURN UNDER MAP (1601E,1601F,1600)
esubmission@bir.gov.ph
.
EMAIL
BIR RECONCILIATION
SAWT
FORMAT
MAP
FORMAT
Annex “B”
Annex “B”
BIR REGISTERED NAME
TRADE NAME
ADDRESS
TIN
BIR REGISTERED NAME
TRADE NAME
ADDRESS
TIN
MONTHLY ALPHALIST OF WITHHOLDING TAXES (MAWT)
RETURN PERIOD
MONTHLY ALPHALIST OF WITHHOLDING TAXES (MAWT)
RETURN PERIOD
Seq
no.
TIN
1
2
Registered Name
(Alphalist)
3
Return
period
mm/yy
4
Nature of income
payment
5
ATC
6
Tax rate
Tax base
7
Tax
Withheld
8
Seq
no.
TIN
1
2
2
2
3
4
5
TOTAL
AMOUNT
P
P
Return
period
mm/yy
4
Nature of income
payment
5
ATC
Tax rate
Tax base
Tax
Withheld
6
7
8
9
1
9
1
3
4
5
Registered Name
(Alphalist)
3
BIR
TOTAL
AMOUNT
P
P
• UNDER DECLARATION OF INCOME
• OVER STATEMENT OF CREDITS
• UNDER/ NON-REMITTANCE OF TAXES WITHHELD
• LATE/ NON-ISSUANCE OF CERTIFICATES
CONSEQUENCES FOR FAILURE
TO WITHHOLD
1. 25% SURCHARGE; 50% WILLFULL
2. 20% INTEREST PER ANNUM
3. COMPROMISE PENALTY OR
CRIMINAL LIABILITY
4. DISALLOWANCE OF EXPENSES /
PUCHASES AS DEDUCTION
 With proof that payee reported the incomeinterest and penalties
 Without proof that payee reported the incomewithholding tax, interest and penalties
PENALTY PROVISION:
Sec. 80 LIABILITY FOR THE TAX
A. Municipality/Barangay – He shall be liable for the
withholding and remittance of the correct tax due. He
shall be liable for penalties or additions to the tax
with respect to such failure to withhold and remit.
B. EMPLOYEE – When an employee fails or refuses
to file withholding exemption or willfully supplies in
accurate information, the tax required to be withhold
by the employer shall be collected from him
including the penalties or additions to the tax. If
there is an excess, it shall no longer be refunded but
forfeited in favor of the government.
PENALTY PROVISION
 In addition to the imposition of administrative penalty,
willful failure by such person to keep any record and
to supply the correct and accurate information at the
time required herein, shall be subject to the
criminal penalty under the relevant provisions of
the Tax Code of 1997, upon conviction of the
offender.
 The imposition of any of the penalties under the Tax
Code of 1997 and the compromise of the criminal
penalty on such violations, notwithstanding,
shall not in any manner relieve the
violating taxpayer from the obligation to
submit the required documents
Penalties for Non-Compliance
•LATE FILING
 Non-withholding
Under withholding
Under remittance
Failure to refund excess taxes
withheld on compensation
• overwithholding
• overremittance
Revenue Memorandum Order No. 16-2013
Subject: Directive to inform all Government Offices including any of its agencies,
political subdivisions or instrumentalities, or government- owned or controlled
corporations (GOCCs), to act and serve as “Role Model” to the Taxpaying
Public with regards to Tax Compliance
1. To inform the aforementioned Government offices and GOCCs under
their respective jurisdictions to strictly comply with all the provisions with
NIRC, as amended and its implementing rules and regulations;
2. To treat these Government offices and GOCCs in equal manner with
the other taxpaying public in matters of enforcement and collection of
taxes with no exception;
3. To impose and assess the necessary legal increments.
4. No special treatment.
5. In cases of violations and/or failure to comply. Be civil and criminally
charged.
6. To recommend the filing of civil and/or criminal actions, if necessary, on
these erring Heads, Executives, Directors and Officers of these
Government offices or GOCCs in accordance with the provisions of the
NIRC, as amended and other applicable laws.
ask not what your country can do for you –
ask what you can do for your country.
JFK
Thank you very much . . .
End of presentation