RR No. 12-2013: Amends Section 2.58.5 of RR No. 2-98, as amended, relative to the requirements for deductibility of certain income payments

Summary

RR No. 12-2013 further amends Section 2.58.5 of RR No. 2-98 on the requirements for deductibility of income payments subject to withholding.

Key points

1. Withholding must be paid. An income payment that is otherwise deductible is allowed as a deduction from the payor’s gross income only if the required withheld income tax has been paid to the BIR under Sections 57 and 58 of the Code.
2. No cure at audit. No deduction is allowed where no withholding was made under Sections 57 and 58, even if withholding tax is paid at the time of audit investigation or reinvestigation or reconsideration.

Who is affected

• Payors of income payments subject to withholding

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