RR No. 14-2008: Amends further Section 2.57.2(M) of RR No. 2-98, as amended, increasing the coverage of withholding tax agents who are required to withhold 1% from regular suppliers of goods and 2% from regular suppliers of services from the top 10,000 to top 20,000 private corporations

Key points

1. Rates withheld. Income payments by the top 20,000 private corporations, as determined by the CIR, to local or resident suppliers are subject to creditable withholding tax. The rate is 1% for suppliers of goods and 2% for suppliers of services, including non-resident aliens engaged in trade or business in the Philippines.
2. Criteria for the top 20,000. Criteria include being a large taxpayer or in the earlier top 5,000 or top 10,000 lists, net VAT of at least P 100,000, income tax of at least P 200,000, or percentage taxes of at least P 100,000 for the preceding year. Gross sales over P 10,000,000 or gross purchases over P 5,000,000 for the preceding year also qualify.
3. Written notice required. A corporation is a withholding agent only after the CIR notifies it in writing that it was selected. A large taxpayer is automatically considered one of the top 20,000, but its authority takes effect only upon written notice from the CIR.
4. Ceasing to be a withholding agent. No notice is needed when a taxpayer closes or dissolves, merges or consolidates as the dissolved or absorbed corporation, or otherwise loses juridical personality by operation of law. A GOCC previously in the top 5,000 ceases to be a withholding agent and is treated as one of the top 20,000 instead.
5. Semestral list of suppliers. The withholding agent submits a list of its regular suppliers of goods and services to the Large Taxpayers Assistance Division or Large Taxpayers District Office, or to the RDO with jurisdiction over its principal place of business.
6. Earlier lists continue. Taxpayers in the top 5,000 under RR No. 12-94 or the top 10,000 under RR No. 17-2003 continue to withhold at 1% and 2% unless the CIR writes that they no longer qualify or they cease operations or lose juridical personality.

Who is affected

• Top 20,000 private corporations as notified by the CIR
• Large taxpayers
• Local or resident suppliers of goods and services

Deadlines and effectivity

• Supplier lists due semestrally on or before July 31 and January 31 of each year