RR No. 1-2019: Further amends certain provisions of RR No. 2-98 as amended by RR No. 11-2018, which implemented the provisions of RA No. 10963 (TRAIN Law), relative to some changes in the rate of Creditable Withholding Tax on certain income payments

Summary

RR No. 1-2019 further amends RR No. 2-98, as amended by RR No. 11-2018, to apply the Creditable Withholding Tax rate range under Section 57 of the Tax Code starting January 1, 2019.

Key points

1. Rate range. From January 1, 2019, the rate of withholding is not less than one percent (1%) but not more than fifteen percent (15%) of the income payment.
2. MERALCO payments. The gross amount of the MERALCO refund under Supreme Court Case G.R. No. 141314 (Phase IV) is subject to fifteen percent (15%). Interest on meter deposit refunds is subject to ten percent (10%) for Residential and General Service customers whose monthly electricity exceeds 200 kwh, and fifteen percent (15%) for Non-Residential Customers.
3. Other distribution utilities. Interest on meter deposit refunds paid by other electric Distribution Utilities follows the same rates: 10% for Residential and General Service customers above 200 kwh monthly consumption, and 15% for Non-Residential Customers.
4. Other debt instruments. Interest income from other debt instruments outside the coverage of deposit substitutes and RR No. 14-2012 is subject to fifteen percent (15%), unless otherwise provided by law or regulations.
5. Provision amended. Section 2 of RR No. 11-2018, on the amendments to Section 2.57.2 of RR 2-98, is further amended.

Who is affected

• Withholding agents
• Recipients of MERALCO refunds and meter deposit interest

Deadlines and effectivity

• Rates apply beginning January 1, 2019

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