TRAIN LAW: TRANSFORMING THE

WITHHOLDING TAX RULES &

RELATED COMPLIANCE
[06.21.19 FRIDAY 8-5 P.M.] [PICPA, MANDALUYONG CITY]
Atty. Willie B. Santiago, CPA
 OUTLINE
• I. BIR ISSUANCES ON
WTW-IT, EWT & FWT
IMPLEMENTATION OF
TRAIN LAW?
• II. WHAT’S NEW & WHAT
TO EXPECT?
HIGHLIGHTS OF EVENTS &
MILESTONES
 AREAS OF CONCERNS
• REVISIT OF ALL BIR ISSUANCES IN
RELATION TO IMPLEMENTATION OF
WT-W/IT, EWT & FWT
• ANTICIPATED CHALLENGES IN THE
PREPARATION OF RETURNS &
STATUTORY REPORTS
• COMPLIANCE 101
• PREPARATION FOR FUTURE BIR TAX
AUDIT
 OUTLINE
• I. WT-W/INCOME TAX
• II. EWT & FWT
 I. WT-W/INCOME TAX
• SAMPLE\ON WT-W\11-2018-AMENDS RR 2-98
ON WITHHOLDING TAX BROUGHT ABOUT BY
TRAIN-WTW PAGES 21-46.pdf
• SAMPLE\ON WT-W\50-2018-Q&A ON
INCOME TAX & WITHHOLDING TAX
PROVISIONS OF TRAIN LAW.pdf
• SAMPLE\ON WT-W\96-2018-REVOKING THE
PROVISIONS OF RMC 50-2018 ON TAXABILITY
OF HMO PREMIUMS SHOULDERED BY
EMPLOYER IN EXCESS OF PHP 90K.pdf
II. EWT & FWT
CIRCULARIZATION OF LIST OF TOP
WITHHOLDING AGENTS
Revenue Memorandum Circular No. 86-2018 [October 11, 2018]
• circularizes the lists of withholding
agents
• required to deduct & remit
• 1% & 2% CWT
• for the purchase of goods & services
• SAMPLE\ON TOP WITHHOLDING AGENTS
• SAMPLE\ON DELISTED TOP
WITHHOLDING AGENTS
• following lists of WA were posted on the
BIR website, www.bir.gov.ph &
• were further classified as follows:

• List of existing WA

• List of additional WA &

• List of WA for deletion from
existing list
• obligation to deduct & remit the
withheld taxes shall continue,
commence, or cease, as the case may be,

• starting November 1, 2018

• All previously-published lists of WA are
repealed & superseded
• Any TP not found in the published lists
• is deemed excluded &
• therefore not required to deduct 1% &
2% CWT
GUIDELINES ON THE PUBLICATION
Revenue Memorandum Order No. 26-2018 [May 24, 2018]

• prescribes the guidelines on the

•publication of
TWA
• pursuant to RR No. 11-2018
• TWAs shall include the ff. Top TP
• which have been classified & duly notified
by the Commissioner
– unless previously de-classified as such or
– have ceased business operations:

• LT under RR No. 1-98, as amended

• Top 20K Private Corp. under RR No. 6-
2009
• Top 5K individual TP under RR No. 6-2009
• TWAs shall also include TP
• which have been newly identified &
included

• as Medium TP &

Taxpayer
• those under the

Account Management
Program (TAMP)
• CIR-approved list of TWAs &
• regular semestral lists of TWAs
• for inclusion or deletion
• shall be published in a newspaper of
general circulation

• not later than 15 June & 15

December
• with the complete names of TP &
RDOs/LTS Divisions where they are
registered
•list shall also be
posted in the BIR
website &
•disseminated
through the
issuance of RMC
• publication of the CIR-approved list is

sufficient notice to
the concerned TWAs
• but the concerned RDOs may still
prepare &
• personally serve individual
written notices of inclusion/deletion to the
concerned TWAs
• under their respective jurisdictions
• obligation to withhold
• 1% & 2% creditable withholding taxes
• on goods & services, respectively

1st day
• shall commence on the

of the month ff. the

month of publication
CIRCULARIZATION OF BIR FORMS
0619-E & 0619F
Revenue Memorandum Circular No. 73-2018 [August 31, 2018]

• circularizes the availability of the new BIR

Form Nos.
• 0619-E
– Monthly Remittance Form of Creditable Income
Taxes Withheld (Expanded)
• 0619-F
– Monthly Remittance Form of Final Income Taxes
Withheld
• both January 2018 versions
• Ff. new BIR forms shall be used by the
WA in remitting the WT of the first 2
months of every calendar quarter
– BIR Form No. 0619-E
– BIR Form No. 0619-F
• TP shall file their respective remittance
forms on the ff. due dates:
– Non-eFPS TP-within 10th day of the ff. month in
which withholding was made
– eFPS TP-within 15th day of the ff. month,
depending on the industry grouping as prescribed
under RR No. 26-2002
• Payment shall be made through the ff
modes:
• Manual Return

•eBIRForms
•eFPS
• new BIR Form Nos. 0619-E & 0619-F are
already available under
• BIR Forms-Payment/Remittance Forms
section of the BIR website
– manual filers
• Offline eBIRForms Package v7.1
– eBIRForms filers
• eFPS system
– eFPS filers
• Manual & eBIRForms filers can choose
between manual or online
payment/remittance of WT due
• Manual Payment/Remittance
– Over-the-counter at AAB located within the
territorial jurisdiction of RDO where TP is
registered
• In places where there are no AABs
– return shall be filed & tax due shall be paid with
– the concerned RCO
– through the Mobile Revenue Collection Officers
System (MRCOS) facility
– under the jurisdiction of RDO
• Online Payment/Remittance
• Through GCash Mobile Payment

•LBP Linkbiz Portal

– for TP who have ATM accounts with LBP and/or
holders of Bancnet ATM/ Debit Card

•DBP Tax Online

– for holders of VISA/ Master Credit Card and/or
Bancnet ATM/ Debit
• If manual filer has no withholding tax due
for the month
• TP is still required to file & follow the

“No
existing procedure for

Payment”,
• which is to file through the use of

eBIRForms
NEW CWT RATE ON PROFESSIONAL
PROMOTIONAL & TALENT FEES
Revenue Regulations No. 14-2018 [April 5, 2018]
• it amends Sections 2 & 14 of RR No. 11-
2018
• specifically CWT rate on
• professional, promotional & talent fees
received by
• VAT-registered individual payees &
• the deadline for the submission of certain
reportorial requirements prescribed under
RR 11-2018
• As amended
• Section 2 of RR 11-2018 now imposes a
• 10% CWT on
• gross professional
• promotional &
• talent fees or
• any other form of remuneration
• regardless of amount
• for services rendered by VAT-registered
individual payees
• Section 14 has also been amended as
follows:
• Income payees subject to WT
– under Sec. 2 of RR No. 11-2018 &

–seeking exemption from the

prescribed WT rates
• shall submit on or before 20 April 2018
– duly accomplished “Income Payee’s Sworn
Declaration of Gross Receipts/Sales”
– together with a copy of COR
– to the income payor/WA
– SAMPLE\11-2018 ANNEX B-2 INCOME PAYEES SWORN DECLARATION OF GROSS RECEIPTS OF SELF EMPLOYED PROFESSIONAL-
LONE INCOME PAYOR.doc
• WA who received the “Income Payee’s
Sworn Declaration of Gross Receipts/
Sales” & copy of the payee’s COR
• shall submit on or before 30 April 2018
• duly accomplished “Income Payor/
Withholding Agent’s Sworn Declaration,”
• together with the List of Payees
• who have submitted “Income Payee’s
Sworn Declaration of Gross
Receipts/Sales” & copies of CORs
• SAMPLE\11-2018 ANNEX C INCOME PAYOR WITHHOLDING AGENTS
SWORN DECLARATION.doc
• list of payees
• who are subject to refund

change of
– either due to the

rates of withholding or
– due to the qualification to avail of exemption from
WT
• shall likewise be attached to the 1st
quarter return
– which shall be filed on or before 30 April 2018
NEW WITHHOLDING TAX RULES
Revenue Regulations No. 11-2018 [March 15, 2018]

• further amends certain provisions of RR No.

2-98
• to implement amendments introduced by the
• TRAIN Law relative to

•withholding of
income tax
AMENDMENTS ON FWT
• Citizen or Resident Alien Individual
• PCSO & lotto winnings amounting to Php

10K or less- Exempt

• Interest income from a depository bank

under Expanded FCDU- 15%

• Cash and/or property dividends actually or
constructively received from
– domestic corporation
– joint stock company
– insurance or mutual fund companies &
– ROHQ of multinational companies
– or on the share of an individual in the
distributable net income after tax of a partnership
(except GPP) of which he is a partner
– or on the share of an individual in the net income
after tax of an association, a joint account or a
joint venture or consortium taxable as a
corporation of which he is a member or co-
venturer-10%
• Net capital gains
• realized during TY
• from the sale, barter, exchange or other
disposition of shares of stock in a

not
domestic corporation

traded in the stock

exchange - 15%
• Non-Resident Aliens Engaged in Trade or
Business (NRAETB)
• Net capital gains realized during TY
• from the sale, barter, exchange or other
disposition of shares of stock
• in a domestic corporation not traded in

the stock exchange- 15%

• Domestic Corporations
• Interest income derived from a
depository bank under the Expanded

FCDU- 15%
• Net capital gains realized during TY from
the sale, barter, exchange or other
disposition of shares of stock in a
domestic corporation not traded in the

stock exchange- 15%

FRINGE BENEFITS TAX
• grossed-up monetary value of fringe
benefits granted to the ff. employees
– except rank & file employees
• shall be subject to FBT rates indicated
below:

• Citizen/resident alien/NRAETB-35%
• Non-resident alien not engaged in trade

or business- 25%
RECAPITULATION & ANTICIPATED
CHALLENGES
WHAT ARE THE NEW FORMS &
STATUTORY REPORTS UNDER
TRAIN LAW & IRR
• SAMPLES\RMC NO. 27-2018 NEW BIR FORMS
AFFECTED BY TRAIN LAW AS OF APRIL 16
2018.pdf
• SAMPLES\1601 EQ MANUAL.jpg
• SAMPLES\0605 FOR 1ST QUARTER 1601EQ
MANUAL.pdf
• SAMPLES\1601EQ EFPS.pdf
• SAMPLES\MAP.xlsx
• SAMPLES\QAP.jpg
• SAMPLES\QAP PROCEDURES FOR ALPHALIST
DATA ENTRY VERSION 6.0.jpg
• Common Concerns & Challenges
• Whether subject or not subject
• Rates to be used
• Future legislation which may impact
compliance specifically on TRAIN Law 2
for Corporate Income Recipient
• How to be creative & analytical + prepare
analytics & trending study
• FS preparation
• BIR tax audit & requirements
 WHETHER SUBJECT OR NOT
SUBJECT & RATES TO BE USED
• SAMPLES\WITHHOLDING TAX NEW.xls
 IMPACT OF IMPENDING TRAIN
LAW 2 ON WITHHOLDING FOR
CORPORATE INCOME RECIPIENT
 HOW TO BE CREATIVE &
ANALYTICAL
• Prepare analytics
• Prepare trending study
• Prepare year-end tax reconciliation & tax
risk analysis
 FS PREPARATION & RELATED
IMPACT OF EWT COMPLIANCE
• SAMPLES\AFS.pdf
• SAMPLES\TAX RECONCILIATION
WORKINGS.xlsx
 PREPARATION FOR FUTURE BIR
TAX AUDIT
• SAMPLES\BIR REQUEST FOR PRESENTATION
OF RECORDS.pdf
• SAMPLES\DISALLOWED EXPENSES.jpg
AMENDMENTS ON EWT
RR 11-2018 NEW WITHHOLDING TAX RULES
[JANUARY 31, 2018]
• amends RR 2-98 or the WT Regulations
• areas of amendments are as follows:
• Expanded coverage of income payments
subject to creditable withholding tax &
increasing the tax rates

not
• Expanded coverage on TP

required to be deducted &

withheld from their receipt of income
• Amendment on the manner
• venue &
• time of filing of withholding tax
returns &
• payment of taxes withheld at source including
the alphabetical list of payees
• Transitory provision applicable to TP availing
exemption from withholding
 SPECIFIC
AMENDMENTS
 Expanded coverage of income payments
subject to Creditable WT & increasing the
tax rates

• PF for individual payee

–Not exceeding Php 3M-5%
–More than Php 3M-10%
• PF for non-individual payee
–Not exceeding Php 720,000-10%
–More than Php 720,000-15%
BASIC COMPLIANCE 101
ON PF
• Individuals engaged in practice of profession or
callings
• lawyers, CPAs, doctors, architects, engineers,
marine surveyors, doctors of veterinary science,
dentist, professional appraisers, connoisseurs of
tobacco, actuaries, interior decorators, designers
• RESP
– real estate consultants, real estate appraisers & real
estate brokers
– requiring government licensure examination given by
the Real Estate Service pursuant to RA No. 9646
– all other profession requiring government licensure
examination regulated by PRC/SC
 ON PF PAID TO MEDICAL
PRACTITIONERS
• It shall be the duty of the hospitals, clinics, HMOs
• to withhold & remit taxes
• due on PF of their respective accredited medical
practitioners
• paid by patients who were admitted & confined
to such hospitals & clinics
• They must ensure that correct taxes due on PF of
their medical practitioners
• have been withheld & timely remitted to the BIR
• hospitals & clinics shall not allow their medical
practitioners to receive payment of PF
• directly from patients
• who were admitted & confined to such
hospital or clinic &

• instead must include PF in the total

medical bill of the patient
• which shall be payable directly to the hospital
or clinic
 ON PRO-BONO
• Execute sworn declaration jointly by MP &
patient
• SAMPLES\11-2018 ANNEX A ON AFFIDAVIT-
DECLARATION THAT NO PF HAS BEEN
CHARGED BY MEDICAL PRACTITIONER.doc
• shall form part of the records of the
hospital/clinic
• shall be made readily available for BIR audit
• Hospital/clinic to report to BIR MP who fail to
execute Annex “A” within 10 days
 HOSPITAL’S ADDITIONAL
OBLIGATION TO BIR
• Submit list of MP
• whose PF was paid directly to the
hospital/clinic

pro-bono
• MP with

arrangement
• On a quarterly basis
• 15th day after the end of each quarter
• Submit list of accredited MP
 WHO ARE INCLUDED AS MP?
• MedTech
• allied health workers
– occupational therapists
– physical therapists
– speech therapists
– nurses &
– other MP who are not under an employer-
employee relationship with the
hospital/clinic/HMO
 HOSPITAL’S OBLIGATION TO MP
• Issue 2307 every 20th day after the close
of the quarter
• SAMPLES\2307.png
 OTHER INCOME RECIPIENTS
• Professional entertainers
– such as, but not limited to, actors & actresses,
singers, lyricists, composers & emcees
• Professional athletes
– including basketball players, pelotaris & jockeys
• All directors & producers involved in movies,
stage, radio, television & musical productions
• Insurance agents & insurance adjusters
• Management & technical consultants
• Bookkeeping agents & agencies
• Fees of directors

not
• who are

employees of the
company paying such fees
• whose duties are confined to attendance
at & participation in the meetings of the
BOD
• Income Payments to certain brokers & agents
• on gross commissions of
• customs
• insurance
• stock
• immigration &
• commercial brokers
• fees of agents of professional entertainers &

• RESPs who failed or did not take

up the licensure examination given by PRC
• Commissions of independent and/or exclusive
sales representatives & marketing agents of

multi-level
companies
 BASIS & EXTENT OF
WITHHOLDING TAX
• In the case of professional entertainers,
professional athletes, directors involved in
movies, stage, radio, television & musical
productions & other recipients of talent fees
• the amounts subject to withholding tax
• shall include amounts paid to them
• In consideration for the use of their names or
pictures in print, broadcast, or other media or
for public appearances
• for purposes of advertisements or sales
proportion
• If the recipient of the aforementioned
income,

• however, is an employee of the

• lone income payor
• such fees or payments shall be
considered
• supplemental compensation
• subject to the withholding tax on
compensation
 OBLIGATION OF INCOME
RECIPIENT
• Submit Sworn Declaration + COR if PF shall not
exceed Php 3M
• Not later than Jan. 15 or
• at least prior to the initial payment of PF
• To avail of lower 5%, otherwise 10%
• SAMPLES\11-2018 ANNEX B-1 INCOME PAYEES
SWORN DECLARATION OF GROSS RECEIPTS-
SELF EMPLOYED PROFESSIONALS-SEVERAL
INCOME PAYORS.doc
• SAMPLES\2303.pdf
WHEN WILL THE 10% HIGHER EWT
RATE APPLIES TO INDIVIDUAL
PAYEE?
• payee failed to provide Sworn
Declaration
• income payment exceeds ₱3M

•despite receiving Sworn

Declaration from the income payee
WHEN WILL THE 15% HIGHER EWT
RATE APPLIES TO NON-
INDIVIDUAL PAYEE?
• payee failed to provide Sworn
Declaration on Php 720K threshold
• income payment exceeds Php 720K
• Despite receiving Sworn Declaration
• SAMPLES\11-2018 ANNEX B-3 INCOME
PAYEES SWORN DECLARATION OF GROSS
RECEIPTS-NON-INDIVIDUALS.doc
 ADDITIONAL OBLIGATION OF
PAYOR UNDER THIS RR
• To execute Sworn Statement on the number of
payees who have submitted Annexes
• SAMPLES\11-2018 ANNEX C INCOME PAYOR
WITHHOLDING AGENTS SWORN
DECLARATION.doc
• Together with list of payees
• On or before January 31 of each year
 OTHER INCOME PAYMENTS
• Rentals of real, personal, poles, satellites &
transmission facilities, billboards at 5%
• Contractor payments at 2%
– General engineering
– General building
– Specialty
– Others
– SAMPLES\11-2018-AMENDS RR 2-98 ON
WITHHOLDING TAX BROUGHT ABOUT BY
TRAIN.pdf
• Income payments to partners of GPP-
15%-10% for threshold at Php 720K
• Sale of real property classified as
ordinary asset + seller is habitually
engaged, with SP of
– Php 500K & below-1.5%
– Php 500K-Php 2M-3%
– Php 2M & up-5%
• Registration with HLURB or HUDCC
– shall be sufficient for a seller to be considered as
habitually engaged in the real estate business.
• If the seller is not registered with HLURB or
HUDCC
– he may prove that he is engaged in the real estate
business by offering other satisfactory evidence
– for example, he consummated during the
preceding year at least 6 taxable real estate
transactions, regardless of amount
– banks shall not be considered as habitually
engaged in the real estate business
• Credit card companies payment-1/2 of 1%
 ON WITHHOLDING ON LOCAL
PURCHASES OF GOODS & SERVICES
• TP classified & duly notified by Commissioner
• In newspaper of general circulation or BIR website as
• LT
• SAMPLE\LTDO HEADING.pdf
• Top 20K Corp
• SAMPLE\TOP 20K NOTICE.pdf
• Top 5K Individuals
• identified Medium TP & those under
• SAMPLE\MEDIUM TP.pdf
• Taxpayer Account Management Program (TAMP)
• SAMPLE\TAMP LETTER.jpg
• Local purchases of goods -1%
– does not include agricultural products

• Local purchases of services -

2%
• SAMPLES\BIR DIGEST ON INCLUSION &
DELETION AS TWA.doc
 WHAT IS MEANT BY LOCAL
RESIDENT SUPPLIER?
• Regular supplier
• Does not include casual purchase or purchase
from non-regular supplier & oftentimes
involving a single purchase
• Single purchase involving Php 10K or
more shall be subject to withholding
• Regardless of the amount but involves 6
transactions
• obligation to withhold shall commence
on the 1st day of the month ff. the month
of publication
• Existing WA which have not been delisted
prior to these regulations
• shall remain as top withholding agent.
• initial & succeeding publications
• shall include the additional top
withholding agents &
• those that are delisted.
 OTHER RECIPIENTS OF INCOME
• SAMPLES\11-2018-AMENDS RR 2-98 ON
WITHHOLDING TAX BROUGHT ABOUT BY
TRAIN.pdf
 SUPPLIER OF AGRICULTURAL
PRODUCTS
• Income payments made to agricultural
suppliers such as those payments made by
– Hotels, restaurants, resorts,
– Caterers, food processors, canneries,
supermarkets
– Livestock, poultry, fish & marine product dealers
– Hardwares, Factories, furniture shops & all other
establishments

– in excess of the cumulative amount of Php

300K within the same TY-1%
 WHAT ARE AGRICULTURAL PRODUCTS?
• agricultural, forest & marine food & non-food
products
– livestock & poultry of a kind generally used as, or
yielding or producing of foods for human
consumption
– breeding stock & genetic materials
• “Livestock”-cow, bull & calf, pig, sheep, goat
• “Poultry”-fowl, duck, goose, turkey
• “Marine products”-fish & crustacean such as
but not limited to, eel, trout, lobster, shrimp,
prawn, oyster, mussel & clam, shell & other
aquatic products.
• Meat, fruit, fish, vegetable & other agricultural
& marine food products
– even if they have undergone the simple processes
of preparation or preservation for the market
– such as freezing, drying, salting, smoking or
stripping
– including those using advanced technological
means of packaging
– such as shrink wrapping in plastics, vacuum
packing, tetra-pack & other similar packaging
method
 AGRICULTURAL FOOD PRODUCTS
• corn coconut, copra, palay, cassava, coffee,
• Polished or husked rice, corn grits,
• locally produced raw cane sugar &
• ordinary salt
• Campaign contributions & purchases related
to campaigns-5%
 Expanded coverage on the subject TP not
required to be deducted & withheld from
their receipt of income
• Income earner whose source of income comes
from lone income payor &
– total income does not exceed Php 250,000
– should not be subjected to WT
– provided a Sworn Declaration shall be submitted to
the lone income payor
– before the initial payment of income or before
January 15 of each year, whichever is applicable
– Otherwise, the amount will be subject to WT
– SAMPLE\ON PF\11-2018 ANNEX B-2 INCOME PAYEES SWORN
DECLARATION OF GROSS RECEIPTS OF SELF EMPLOYED PROFESSIONAL-
LONE INCOME PAYOR.doc
• Payor shall in turn execute its own Sworn
Declaration
• stating the number of payees not subjected to
withholding tax

•together with the latter’s

declaration for submission to the BIR
• SAMPLE\ON PF\11-2018 ANNEX C INCOME
PAYOR WITHHOLDING AGENTS SWORN
DECLARATION.doc
• Failure to submit Sworn Declaration
• necessitates higher withholding tax rate to be
applied

•10% for individuals &

•15% for non-individuals

ILLUSTRATIONS
 Exempted Persons or Entities
• sale of real property by a corporation
• registered with HLURB/HUDCC
• as engaged in socialized housing
• where SP of house & lot or only lot does not
exceed the socialized housing price
• GSIS + SSS + PHIC + LWD
• JV or consortium formed for the purpose of
undertaking construction projects subject to
certain conditions imposed
• individuals earning Php 250,000
ILLUSTRATIONS
Amendment on the manner, venue & time
of filing of WT returns & payment of taxes
withheld at source including the
alphabetical list of payees
• BIR Forms 1601EQ for CWT
• SAMPLES\1601EQ.jpeg
• 1602 for FWT on interest on bank deposits
• 1603 for FWT on fringe benefits
• 1601FQ for all other FWT
• shall be made not later than the last day of
the month ff the close of the quarter during
which the withholding was made
•Quarterly
Alphabetical List
of Payees (QAP) shall
be attached
• SAMPLE\MAP.xlsx
• BIR Monthly Remittance Return Form
• BIR Form No. 0619E
• BIR Form No. 0619F

• shall be filed every 10

th/15 th
(EFPS) of the month for the remittance of
withheld taxes

• For O remittance, the same will still be

filed
 Transitory provision applicable to TP
availing exemption from withholding
• Submission of Income Payee’s Sworn
Declaration of Gross Receipts/Sales
• SAMPLE\ON PF\11-2018 ANNEX B-2 INCOME PAYEES SWORN
DECLARATION OF GROSS RECEIPTS OF SELF EMPLOYED PROFESSIONAL-
LONE INCOME PAYOR.doc
– together with his Certificate of Registration
(COR)/BIR Form 2303
– SAMPLE\2303.pdf
• to the income payor/withholding agent
– on or before April 6, 2018
– should he avail of the exemption from withholding
• Income payor/withholding agent shall in turn
submit the same

April 30,
• on or before

2018
• Any excess on the income tax withheld

• shall be refunded to the

payee
• subject to adjustments on the part of the
payor/withholding agent
• to be reflected in the 1st Quarterly EWT

Return/BIR Form 1601EQ

• QAP
• for submission on or before April 30, 2018
• BIR Form 2307
• SAMPLE\2307.png
• shall be returned by the payee to the payor

• upon receipt of refund

• together with the corrected BIR Form
2307
• if still applicable
• Otherwise, the corrected form will be given in
the next quarter
EXPANDED COVERAGE OF TP
EXEMPT FROM WITHOLDING
• Corporations which are exempt from
income tax

• under Sec. 30 of the Tax

Code
• GOCCs exempt from income tax
• under Section 27(A)(C)
• such as the GSIS, SSS, PHIC &

LWDs
• JV or consortium formed to undertake
construction projects
• upon compliance with the ff 3
conditions:
• Should involve joining or pooling of
resources by licensed local contracts
– that is, licensed as general contractor by PCAB of
DTI
• local contractors engaged in the
construction business
• JV itself must be duly licensed as such by
PCAB
• JVs involving foreign contractors may also
be treated as non-taxable corp,
• subject to the ff. conditions:
– member foreign contractor is covered by a
special license as contractor by the PCAB
– appropriate Tendering Agency (government office)
has certified that the construction project is a
foreign financed/internationally funded
project
– International bidding is allowed under the
Bilateral Agreement entered into by & between
PH & foreign/international financing institution
–pursuant to Contractor’s License Law
KEEP YOUR

QUESTIONS
COMING. SEND THEM TO
ME? We are learning
together! Keep in touch!
willie.santiago@dmdcpa.com.ph