RR No. 7-2019: Amends pertinent provisions of Section 2 under RR No. 11-2018 specifically on the requirements for top withholding agents

Key points

1. Withholding rates. Income payments by top withholding agents, including non-resident aliens engaged in trade or business in the Philippines, to local or resident suppliers are subject to withholding tax. The rate is One percent (1%) for suppliers of goods and Two percent (2%) for suppliers of services.
2. Who is a top withholding agent. These are taxpayers whose gross sales or receipts, gross purchases, or claimed deductible itemized expenses, as the case may be, amounted to TWELVE MILLION PESOS (P12,000,000.00) during the preceding taxable year.
3. Publication and delisting. Concerned LTS, RRs and RDOs publish the top withholding agents in a newspaper of general circulation, and may also post them on the BIR website, as notice. Agents classified before effectivity remain so until they fail the criteria and are published as delisted.
4. Meaning of terms. Goods means tangible personal property, excluding intangible personal property and the agricultural products defined under item (N). A regular supplier is one engaged in business or profession with whom the buyer has had at least six (6) transactions, regardless of amount, in the previous or current year.
5. Casual purchases. As a general rule, casual purchases from non-regular suppliers are not covered. However, a single purchase of Ten thousand pesos (P10,000) or more is subject to withholding tax.

Who is affected

• Top withholding agents (private corporations or individuals)
• Local or resident suppliers of goods and services

Deadlines and effectivity

• Withholding starts on the first (1st) day of the month following the month of publication
• Threshold based on the preceding taxable year