RMO No. 22-2005: Prescribes the guidelines and procedures in the implementation of RR No. 8-2005 on the inclusion as income payments subject to Creditable Withholding Tax of the Manila Electric Company refund to Phase IV customers

Key points

1. Withholding rates. The tax is withheld on the gross refund, whether by postdated check or application to the customer’s bill. The rate is 25% for customers with active contracts and 32% for customers with terminated contracts.
2. Remittance and reports. MERALCO remits through the Electronic Filing and Payment System (EFPS) using BIR Form No. 1601-E on or before the 15th day of the following month. It submits a Monthly Alphalist of Payees/Customers (MAP) for each of the 3 months of the quarter to the Large Taxpayers Assistance Division I, attached to the e-filed form.
3. Certificates. Customers subjected to withholding get BIR Form No. 2307 on or before the 20th day of the month after the quarter closes, or upon demand.
4. Registration and exemptions. Commercial and industrial customers submit their Certificate of Registration to MERALCO before the refund or bill application. Customers claiming exemption submit a certified true copy of the Certificate of Exemption or a BIR-issued ruling. The exemption certificate applies only prospectively from its issuance, never retroactively.
5. No certificate needed. National government agencies and instrumentalities (including provincial, city, municipal governments and barangays, if registered in their own name with MERALCO), GOCCs such as GSIS, SSS, PHIC, PCSO and PAGCOR, and foreign embassies and international organizations such as WHO, IRRI and UNESCO.
6. Refunds to exempt customers. Refunds of creditable tax withheld from tax-exempt customers adjust the recorded collection performance of the Large Taxpayers Service. If the source cannot be directly identified or includes more than the MERALCO tax credit, the amount is apportioned as MERALCO tax credits over total credits/payments in the taxable year, multiplied by the total refunded.

Who is affected

• MERALCO
• MERALCO Phase IV customers receiving refunds
• Commercial and industrial customers

Deadlines and effectivity

• Remit BIR Form No. 1601-E on or before the 15th day of the following month
• BIR Form No. 2307 on or before the 20th day of the month after quarter end