Summary
RMC No. 47-2023 reiterates the proper time for National Government Agencies, Local Government Units and Government Owned and Controlled Corporations to remit withholding taxes.
Key points
- When the duty to withhold arises. Under Section 2.57.4 of RR No. 2-98, the payor must deduct and withhold when an income payment is paid or payable, or when it is accrued or recorded as an expense or asset in the payor’s books, whichever comes first.
- Recorded but unpaid income. Where the income is not yet paid or payable but is recorded as an expense or asset, the duty to withhold arises in the last month of the return period in which it is claimed as an expense or amortized for tax purposes.
- Accrual basis in government. The Commission on Audit has prescribed the accrual basis in the Government Accounting Manuals for NGAs and LGUs since 2002. The Circular notes that these entities still apparently follow the cash basis in treating their withholding duty.
- Request to comply. NGAs, LGUs, GOCCs and other government entities are requested to strictly follow the proper time of remittance to avoid penalties.
Who is affected
- National Government Agencies and instrumentalities
- Local Government Units
- Government Owned and Controlled Corporations
Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.
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