RMC No. 45-2007: Reiterates the mandated duty of the top 10,000 private corporations and of the government to withhold not only on their purchase of goods but also on their purchase of services pursuant to Revenue Regulations No. 2-98

Summary

RMC No. 45-2007 reiterates that the top 10,000 private corporations and the government must withhold tax on purchases of services as well as goods, under Revenue Regulations (RR) No. 2-98.

Key points

1. Top 10,000 private corporations. Section 2.57.2(M) of RR No. 2-98, as amended by RR No. 17-2003, imposes withholding tax of 1% for goods and 2% for services on payments to local or resident suppliers, other than those covered by other withholding rates.
2. Government. Section 2.57.2(N), as subsequently amended by RR No. 30-2003, imposes withholding tax of 1% for goods and 2% for services on the government’s payments to local or resident suppliers, other than those covered by other withholding rates.

Who is affected

• Top 10,000 private corporations
• Government as withholding agent
• Local or resident suppliers of goods and services

Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.