It is important to be informed that there are income payments exempt from withholding tax. Sec 2.57.5 of RR 2-98 lists the income payments exempted from withholding, thus withholding of creditable withholding tax prescribed in RR2-98 shall not apply to income payments made to the following:
A.) National government and its instrumentalities, including provincial, city or municipal governments;
B.) Persons enjoying exemption from payment of income taxes pursuant to the provisions of any law, general or special, such as but not limited to the following:
(1) sales of real property by a corporation registered with HLURB or HUDCC...
(2) Corporations registered with the Board of Investments (BOI) and enjoying exemption from the income tax (income tax holiday) provided by RA 7916 and the Omnibus Investment Code of 1987.
(3) Corporations which are exempt from income tax under Sec. 30 of NIRC to wit, GSIS, SSS, PHIC, PCSO, PAGCOR....
Other common issues assessed by examiners which are exempt from withholding tax:
- Income payment to General Professional Partnerships
Chapter III, SEC. 26 of NIRC prescribes the Tax Liability of Members of General Professional Partnerships. - A general professional partnership as such shall not be subject to the income tax imposed under this Chapter. Persons engaging in business as partners in a general professional partnership shall be liable for income tax only in their separate and individual capacities.
Income payment to International Carrier
Sec. 28 (A)(3)(b)
An international carrier doing business in the Philippines shall pay a tax of two and one-half percent (2 1/2%) on its 'Gross Philippine Billings'
ftp://ftp.bir.gov.ph/webadmin1/pdf/14572rmc04_72.pdf
hi!
ReplyDeleteI have a question. we actually rented some public jeepneys for installation of toploads and those jeepneys are under PUJ Associations so the payment will be under the name of the assoc. which has TIN but is NONVAT. We were advised by our external accountant that since our company is included on the top 20,000 taxpaying companies, we have the right to withhold 5% from the payment since it's for rental. Now our problem is, the PUJ association is claiming that we shouldn't deduct any amount since they are a NONVAT cooperative. We have already explained and supported the deductions with Certificate of Creditable Tax Withheld At Source (BIR Form 2307). I'd like to know where we stand on this issue. I appreciate your help. thanks!
This case might be subjected to further legal basis.
ReplyDeleteSince cooperatives are exempted to normal tax on regular corporation, creditable withholding tax is of no use, thus payments shall be exempted to withholding. Just secure a copy of their certificate of tax exemption.
Furthermore, VAT issue is different from withholding tax.
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ویژگی های بهترین مشاور سئوشامل درک عمیقی از سه موضوع سئو داخلی،سئو خارجی و سئو تکنیکال است.
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