RR No. 31-2020: Further amends the pertinent provisions of Revenue Regulations (RR) No. 11-2018, as previously amended by RR No. 7-2019, specifically on the criteria for identifying the Top Withholding Agents

Key points

1. Withholding rates. Income payments by top withholding agents, including non-resident aliens engaged in trade or business in the Philippines, to local or resident suppliers are subject to 1% for goods and 2% for services.
2. Thresholds. A top withholding agent has gross sales, receipts or gross purchases in the preceding taxable year of at least Twelve Million Pesos (₱ 12,000,000.00) for RDO Groups A and B, or Five Million Pesos (₱ 5,000,000.00) for Groups C, D and E.
3. Publication and start of withholding. Top withholding agents are published in a newspaper of general circulation and may be posted on the BIR website, which serves as notice. Withholding starts on the first day of the month following publication. Those already classified before effectivity stay until they fail the criteria and are published as delisted.
4. Goods and regular suppliers. Goods mean tangible personal property, excluding intangible property and agricultural products under item (N). Casual purchases from non-regular suppliers are generally not covered, but a single purchase of Ten thousand pesos (₱ 10,000) or more is subject to withholding. A regular supplier is one with at least six (6) transactions with the buyer, regardless of amount, in the previous or current year.

Who is affected

• Top withholding agents, private corporations or individuals
• Local or resident suppliers of goods and services

Deadlines and effectivity

• Thresholds based on gross sales, receipts or purchases of the preceding taxable year
• Withholding starts the first day of the month following publication