WITHHOLDING TAX ON GOVERNMENT MONEY PAYMENTS Presented by: Susan D. Tusoy, CPA, MPS Asst. Chief, Assessment Division Final Withholding VAT on Government Purchases RA 9337 Payments by the government or any of its political subdivisions, instrumentalities or agencies, including government-owned and controlled corporations (GOCCs) on account of its purchase of goods and services who are subject to VAT 5% Final VAT Withholding on Percentage Tax Rate Persons exempt from VAT under Sec. 109 (z) of the Tax Code 3% Domestic carriers and keepers of garages Cars for rent or hire •Transportation contractors •Domestic carriers by land, air or water 3% International carriers doing business in the Phils. 3% Franchises on radio/tv Franchise on electric, gas, and water utilities 3% Banks and non-bank financial intermediaries 0%, 1%, 3%, 5% Finance Companies 0%, 1%, 3%, 5% 2% Withholding on Percentage Tax Rate Life insurance premiums (w/ certain exclusions) 2% (RMC 222010) Agents of foreign insurance companies 10% /5% Amusements (RMC 18-2010 – includes karaoke bars/videoke bars) 18%,10%, 15%, 30% Sale, barter or exchange of shares or stocks listed or traded through local stock exchange ½ of 1% Shares of stock sold or exchanges through initial public offering 1%, 2%, 4% On gross payments to stock, real estate, commercial, customs, insurance and immigration brokers based on gross receipts 7% I. WITHHOLD TAXES TIME TAX BASE COMPENSATION WHEN PAID / CONTRUCTIVELY PAID TAXABLE COMPENSATION INCOME EXPANDED GMP WHEN PAID / PAYABLE GROSS PAYMENT (NET OF VAT) (VAT PAYEE) GMP WHEN PAID / PAYABLE (NON VAT PAYEE) FINAL OTHER FINAL FRINGE BENEFITS WHEN PAID / PAYABLE WHEN PAID GROSS PAYMENT GROSS PAYMENT GROSS –UP MONETARY VALUE II. WITHHOLING TAX REMITTANCE TYPES COMPEN-SATION FORM 1601-C EFPS FILING EFPS PAYMENT 10th day of the ff month except for the month of December which is due on the Jan. 15 Staggered Filing (RR 262002) 15th day of the ff month except for the month of December which is due on the Jan. 20 MANUAL FILING/ PAYMENT EXPANDED 1601-E BANKS 1602 Real Property (Ordinary Asset) 1606 10th day of the ff month Not applicable Not applicable FINAL OTHER FINAL 1601-F 10th day of the ff month Staggered Filing (RR 262002) 15th day of the ff month W/TAX ON VAT & PERCENTAGE 1600 (ALPHALIS T) 10th day of the ff month 10th day of the ff month 10th day of the ff month FRINGE BENEFITS 1603 10th day of the month following the end of the qtr. 15th day of the month ff the end of the quarter 15th day of the month ff the end of the quarter III. WITHHOLDING TAX CERTIFICATES TYPES FORM TIME COMPENSATION 2316 Jan 31 of the ff year For terminated employees - last payment of salary EXPANDED 2304 (Exempt) 20 days ff. close of the quarter or upon demand 2307 (Taxable) GOV’T. MONEY PAYMENTS 2307 For Non-VAT : 10th day of the ff month 2306 For VAT FINAL TAX 2306 Jan. 31 of the following year FRINGE BENEFITS 2306 Jan. 31 of the following year : 10th day on the month ff month IV. ANNUAL RETURNS TYPE FORM COMPENSATION 1604 CF EXPANDED 1604E DESCRIPTION Alphalist of employees Less than 10 employees – manual filing 10 employees or more - softcopy eFPS Filer - e-attach Alphalist of payees Less than 10 payees 10 payees or more eFPS Filer – manual filing - softcopy - e-attach TIME Jan. 31 of the ff year March 1 of the ff year ON MANDATORY ATTACHMENTS RR No. 2-2006 REVENUE REGULATIONS NO. 2-2006 Mandatory Attachments : 1. Summary Alphalist of Withholding Agents of Income Payments Subjected to Tax Withheld at Source (SAWT) to Tax Returns With Claimed Tax Credits due to Creditable Tax Withheld At Source REVENUE REGULATIONS NO. 2-2006 2. Monthly Alphalist of Payees (MAP) Whose Income Received Have Been Subjected to Withholding Tax in the Withholding Tax Remittance Return Filed by the Withholding Agent/Payor of Income Payments 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. 1601E, 1601-F, 1600) showing , among others, total amounts of income/gross sales/gross receipts and taxes withheld and remitted. SAWT/MAP Below 10 payees - hard copy 10 or more payees - softcopy (diskette, CD etc.) EFPS regardless of the number of income payees/ income recipient - e-attach Illustration A local government unit purchased the following goods and services for the month of November 2013. Invoice Price Fertilizers - P56,000.00 Construction Materials - 44,800.00 Repair of Aircon Units - 22,400.00 Rental of equipments - 33,600.00 Compute for the withholding tax on government money payments assuming the seller is: a) Non-VAT registered b) VAT taxpayer Answer – Non VAT Supplier Invoice Price Tax Base GMP % Tax Tax Rate EWT 560.00 0.00 Fertilizers 56,000.00 56,000.00 EWT 1% GMP - none Const. Materials 44,800.00 44,800.00 EWT – 1% GMP – 3% 448.00 1,344.00 Repair of Aircon Untis 22,400.00 22,400.00 EWT – 2% GMP – 3% 448.00 672.00 Rental of Equipments 33,600.00 33,600.00 EWT – 5% GMP – 3% 1,680.00 1,008.00 Answer – VAT Supplier Invoice Price Fertilizers 56,000.00 Tax Base Tax Rate EWT GMP VAT 56,000.00 EWT 1% 560.00 None EWT – 1% GMP – 5% 400.00 2,000.00 Const. Materials 44,800.00 40,000.00 Repair of Aircon Untis 22,400.00 20,000.00 EWT – 2% GMP – 5% 400.00 1,000.00 Rental of Equipments 33,600.00 30,000.00 EWT – 5% GMP – 5% 1,500.00 1,500.00 The usefulness of the cup is its emptiness. -Bruce Lee THE END