RMC No. 10-2018: Clarifies the time of withholding and remittance of taxes withheld by Withholding Agents including National Government Agencies and Instrumentalities, Local Government Units and Government-Owned and-Controlled Corporations provided under Sec. 4 of RR No. 12-2001

Key points

1. Source of the conflict. The Government Accounting Manual example recognized Due to BIR accounts only when the payable was paid to the income payee.
2. When withholding arises. The obligation to withhold arises when the income payment is paid or payable, or is accrued or recorded as expense or asset in the payor’s books, whichever comes first. It arises once an expense or asset is recorded, whether or not paid.
3. Government projects. The obligation arises when the agency books construction of PPE as Construction in Progress with the appropriate asset classification, since RR No. 12-2001 says whichever comes first.

Who is affected

• Withholding agents
• National government agencies and instrumentalities
• Local government units
• Government-owned and controlled corporations