RMC No. 63-2012: Clarifies the issues affecting invoicing and recording of income payments for media advertising placements

Key points

1. Billing and withholding by the advertiser. The media supplier bills the client or advertiser for the total media placement. On payment, the advertiser withholds 2% on the entire invoice amount and issues a BIR Form 2307 in the media supplier’s name.
2. Media supplier’s invoicing and income. On receiving payment, the media supplier issues a VAT invoice or official receipt to the advertiser. It reports the entire amount as business income for Income Tax.
3. Commission to the advertising agency. When the media supplier pays the agency’s commission or service fee, it withholds 2% from that fee and issues a BIR Form 2307 in the agency’s name.
4. Agency’s invoicing and VAT. The advertising agency issues its VAT invoice or official receipt to the media supplier for the commission or service fee received. VAT is reported based on that fee.

Who is affected

• Media suppliers
• Clients and advertisers
• Advertising agencies