RMC No. 143-2019: Clarifies the inclusion of taxpayers as top Withholding Agents who are obliged to remit the 1% and 2% Creditable Withholding Taxes pursuant to the criteria of Revenue Regulations No. 7-2019

Key points

1. Groups excluded by OM No. 20-2019. Operations Memorandum (OM) Order No. 20-2019 excludes these taxpayers from the TWA list even if they meet the RR criteria: national government agencies, GOCCs, state universities and colleges, and local government units; taxpayers included because of one-time transactions such as Estate and Donor’s Tax; and tax-exempt taxpayers with no proprietary activities, such as foundations, non-stock non-profit and tax-exempt educational institutions, and religious and charitable institutions.
2. Commission-based individuals. Individuals earning on commission, such as insurance agents and real estate brokers, are checked against their duly-filed 2018 Quarterly Income Tax Returns (BIR Form No. 1701Q) to see how regular their transactions are. If the ₱12M criteria is met in only one (1) taxable quarter, the taxpayer does not qualify as TWA.
3. Published lists. A taxpayer included or not deleted in a published TWA list cannot be compelled to withhold the 1% and 2% CWTs if it does not meet the RR No. 7-2019 criteria. The same applies if it meets them but falls within the excluded groups in OM No. 20-2019.

Who is affected

• Top Withholding Agents
• Government agencies, GOCCs, SUCs and LGUs
• Commission-based individuals such as insurance agents and real estate brokers
• Tax-exempt taxpayers with no proprietary activities