WITHHOLDING TAX

An income payment is subject to the expanded

withholding tax, if the following conditions concur:
a. An expense is paid or payable by the taxpayer, which
is income to the recipient thereof subject to income tax;
b. The income is fixed or determinable at the time of
payment;
c. The income is one of the income payments listed in
the regulations that is subject to withholding tax;
d. The income recipient is a resident of the Philippines
liable to income tax; and
e. The payor-withholding agent is also a resident of the
Philippines.
 WITHHOLDING TAX
EXEMPT FROM EWT
1. National government and its instrumentalities, including provincial, city or
municipal governments and barangays, except government-owned or controlled
corporations;
2. Persons enjoying exemption from payment of income taxes pursuant to the
provisions of any law, general or special, such as but not limited to the following:
a. Sales of real property by a corporation which is registered with and certified by
HLURB or HUDCC as engaged in socialized housing project where the selling
price of the house and lot or only the lot does not exceed P180,000 in Metro
Manila and other highly urbanized areas and P150,000 in other areas;
b. Corporations registered with the BOI, PEZA, and SBMA, enjoying exemption
from income tax under E.O. 226, R.A. 7916, and R.A. 7227;
c. Corporations which are exempt from income tax under Section 30 of the Tax
Code, such as GSIS, SSS, PHIC, PCSO, and PAGCOR;
d. General professional partnerships; and
e. Joint ventures or consortium formed for the purpose of undertaking construction
projects or engaging in petroleum, coal, geothermal and other energy operations
f. International carriers (by air or water) subject to 2.5% Gross Phil Billings
 WITHHOLDING TAX
1. Professional fees for services rendered by individuals; and
professional entertainers and athletes, and directors:
If gross income for current year exceeds P720,000 - 10%
If gross income for current year does not P720,000 - 15%
2. If recipient of professional fees, talent fees, etc. is
a juridical person:
If gross income for current year exceeds P720,000 - 10%
If gross income for current year does not P720,000 - 15%
3. Rental income
Real properties - 5%
Personal properties of P10,000 per payment; P10,000
shall not apply when accumulated rental to same
lessor exceeds or is reasonably expected to exceed
P10,000 within a year - 5%
Poles, satellites and transmission facilities - 5%
Billboards - 5%

 WITHHOLDING TAX
4. Gross payments to resident individuals and corporate cine-
matographic film owners, lessors, or distributors - 5%
5. Gross payments to contractors - 2%
6. Income distribution to beneficiaries - 15%
7. Income payments to certain brokers and agents - 10%
8. Income payments to partners of general professional
partnerships:
If gross income for current year exceedsP720,000 - 15%
If otherwise - 10%
9. Professional fees paid to medical practitioners
If gross income for current year exceedsP720,000 - 15%
If otherwise - 10%
10. Gross additional payments to government personnel from
importers, shipping and airline companies, or their
agents - 15%
11. One-half of gross amounts paid by any credit card
company in the Philippines - 1%
 WITHHOLDING TAX
12. Income payments made by any Top 20,000 Corp
Supplier of goods - 1%
Supplier of services - 2%
13. Income payments made by government to its local/resident
supplier of goods and services other than those covered
by other rates of withholding taxes
Supplier of goods - 1%
Supplier of services - 2%
14. Commissions of independent and exclusive distributors,
and marketing agents of companies - 10%
15. Tolling fees paid to refineries - 5%
16. Payments made by pre-need companies to funeral parlor - 1%
17. Payments made to embalmers - 1%
18. Income payments made to suppliers of agricultural products - 1%
19. Income payments on purchases of minerals, mineral pro-
ducts and quarry resources - 10%
20. MERALCO refund to customers
With active contracts - 25%
With terminated contracts - 32%