EXPANDED WITHHOLDING TAX EWT Revenue Regulations No 2

EXPANDED WITHHOLDING TAX (EWT) (Revenue Regulations No. 2 -98, as amended) Presented by: SUSAN DAJAO TUSOY, CPA, MPS Asst. Chief, Assessment Division RR 19 -Davao City 1

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Types of Withholding Taxes • Withholding Tax on Compensation • Expanded Withholding Tax • Final Withholding Tax; and • Withholding Tax on Government Money Payment 3

FINAL VS. CREDITABLE WITHHOLDING TAX FINAL CREDITABLE • the amount of income tax withheld by the withholding agent is constituted as a full & final payment • taxes withheld are intended to equal the tax due of the payee on the said income • liability rests with the payor as withholding agent • the income recipient is still required to file an income tax return • payee is not required to file an ITR for the particular income 4

Persons Required to Deduct & Withhold 5 Juridical persons, whether or not engaged in trade or business; Individuals in connection with his trade or business, however, individual buyers of real properties are also constituted as withholding agents; All government offices.

Designation of Government Officials as Withholding Agents (EO 651; RR 1 -87; RR 10 -97 and RMO 14 -98) 6 All Heads of Offices (officials holding the highest position) Provincial Governors and Treasurers City Mayors and Treasurers Municipal Mayors & Treasurers Brgy. Captains and Treasurers Note: including their respective accountants

INCOME PAYMENTS SUBJECT TO EWT A. Professional fees, talent fees, etc. , for services rendered by individuals DESCRIPTION 15% if gross income exceeds P 720, 000 10% if otherwise On the gross professional, promotional and talent fees or any other form of remuneration for the services rendered. 1)Those engaged in the practice of profession – all profession requiring gov’t licensure examination and/or regulated by PRC, Supreme Court, etc. 2)Professional entertainers 3)Professional athletes 7

INCOME PAYMENTS SUBJECT TO EWT DESCRIPTION 4. Directors and producers of movies, stage, etc. 5. Insurance agents and adjusters 6. Management and technical consultants 7. Bookkeeping agents and agencies 8. Other recipients of talent fees 9. Fees of directors who are not employees of the company including per diems, allowances and any other form of income payments not subject to w/holding tax on compensation. 8

INCOME PAYMENTS SUBJECT TO EWT DESCRIPTION DISCLOSURE REQUIREMENT Every individual shall periodically disclose his gross income for the current year to the BIR by submitting a Notarized Sworn Declaration to the Collection Division of the Regional Office having jurisdiction of the income earner in (3) copies. Should be filed on June 30 of each year or w/in 15 days after the end of the month the professional/talent/directors income reaches P 720, 000, whichever comes first. 9

INCOME PAYMENTS SUBJECT TO EWT B. Professional Fees, talent fees, etc. , for services of taxable juridical persons DESCRIPTION 15% if gross income exceeds P 720, 000 10% if otherwise On the gross professional, promotional and talent fees or any other form of remuneration for the services rendered. 10

INCOME PAYMENTS SUBJECT TO EWT C. Rentals DESCRIPTION On real properties – 5% On personal properties – 5% On gross rental or lease in excess of P 10, 000 annually Poles, satellites and transmission facilities – 5% Billboards – 5% 11

INCOME PAYMENTS SUBJECT TO EWT DESCRIPTION D. Cinematographic 5% on gross payment film rental and other payments E. Income Payments to certain contractors 2% on gross payments of the ff: - General engineering contractors General building contractors Specialty contractors other contractors 12

INCOME PAYMENTS SUBJEC TO EWT DESCRIPTION F. Income distribution to 15% on the income distributed to the beneficiaries of estates and trusts G. Gross payments to 10% on gross commissions or service fees certain brokers and agents 13

INCOME PAYMENTS SUBJEC TO EWT H. Income payments to partners of general professional partnerships DESCRIPTION On income payments made to partners such as drawings, advances, sharings, allowances and stipends etc. 15% if gross income exceeds P 720, 000 10% if otherwise 14

INCOME PAYMENTS SUBJECT TO EWT I. Professional fees paid to medical practitioners DESCRIPTION 15% if gross income exceeds P 720, 000 10% if otherwise 1. On PF paid by hospitals or clinics, or paid directly to the medical practitioners by patients who were admitted and confined 2. PF paid to medical practitioners by HMOs and/or similar establishments 15

INCOME PAYMENTS SUBJECT TO EWT DESCRIPTION a) It shall be the duty of the hospital/clinic/HMO to remit taxes withheld from professional fees 1) PF paid by HMOs to medical practitioners 2) PF paid by patients to medical practitioners thru the hospitals or clinics 3) PF paid by patients directly to medical practitioners where the 10% or 15% shall in turn be given by medical practitioners directly to the Accounting Office of the hospitals/ clinics 16

INCOME PAYMENTS SUBJECT TO EWT DESCRIPTION b)Exception - The W/tax shall not apply if there is proof that no PF has in fact been charged provided that a sworn declaration is jointly executed by the medical practitioner, and the patient or the duly authorized representative in case the patient is a minor or incapacitated. The sworn declaration shall form part of the records of the hospital/clinic and shall be readily available upon BIR audit. 17

INCOME PAYMENTS SUBJECT TO EWT DESCRIPTION The hospital/clinic shall inform the BIR about any medical practitioner who fails or refuses to execute the sworn declaration within ten days from occurrence. 18

INCOME PAYMENTS SUBJECT TO EWT DESCRIPTION c. Hospitals and clinics shall submit the names and address of medical practitioners every 15 th day after end of each quarter to the Collection Division using the prescribed format (Annex A of RR 3 -99): i) Medical practitioners whose PF was paid by patients directly to the hospital/clinic 19

INCOME PAYMENTS SUBJECT TO EWT DESCRIPTION ii) Medical practitioners whose PF was paid to them directly by the patients and the 10%/15% WT was not given by such practitioner to the Accounting Office of the hosp. /clinic iii) Medical practitioners whose PF was paid to them directly by the patients but the 10%/15% WT was not given by such practitioner to the Accounting Office of the hosp. /clinic 20

INCOME PAYMENTS SUBJEC TO EWT DESCRIPTION iv) Medical Practitioner who did not charge any PF from their patients. d) The term medical practitioner shall include medical technologists, allied health workers (e. g. , occupational therapists, physical therapists, speech therapists, nurses, etc. ) and other medical practitioners who are not under an employer-employee relationship with the hosp. or clinic. 21

INCOME PAYMENTS SUBJEC TO EWT DESCRIPTION e) The hospitals /clinics/HMO shall be responsible for the accurate computation, timely remittance and issuance of withholding tax certificates every 20 th day following close of the taxable quarter or upon request of the payee. The hospital/clinic/HMO shall include in their Alphalist of Payees Subject to Expanded Wtax (BIR Form 1604 E) the above income recipients. 22

INCOME PAYMENTS SUBJECT TO EWT J. Gross selling price or total amount of consideration or its equivalent paid to seller/owner for the sale, exchange, or transfer of real property classified ad ordinary asset DESCRIPTION Seller/transferor is exempt from creditable withholding tax in accordance with Sec. 2. 57. 5 of the regulation - exempt Seller/transferor is habitually engaged in the real estate business: Selling price is P 500 k of less SP <P 500 K but => P 2 M SP <P 2 M Seller/transferor is not habitually engaged in the real estate business 23 - 1. 5% - 3. 0% - 5. 0% - 6. 0%

INCOME PAYMENTS SUBJECT TO EWT K. Additional income payments to gov’t. personnel from importers, shipping and airline companies DESCRIPTION On gross additional payments to gov’t. personnel for overtime services as authorized by law - 15% 1% on ½ of the gross amounts paid L. Certain income payments made by credit card companies 24

INCOME PAYMENTS SUBJEC TO EWT M. Income payments made by the top 20 K private corp. to their local/ resident supplier of goods/services other than those covered by other wtax rates DESCRIPTION Supplier of goods – 1% Supplier of services – 2% Withholding tax on Agricultural Purchases in their original state shall apply on excess of the cumulative amount of P 300, 000 within the same taxable year. 25

On Agricultural Products (RR 6 -2009) 26 v. For purchases involving agricultural products in their original state, the tax required to be withheld shall only apply to purchases in excess of the cumulative amount of P 300, 000. 00 within the same taxable year.

On Agricultural Products 27 v Agricultural Products in their original state shall only include: • corn • copra • rice • sugar cane • coffee • marine food • coconut products • vegetables • palay • cassava • fruits • poultry and livestocks

Illustration: 28 Number of Transactions Year Purchase Amount One 2009 P 90, 000 Two 2010 320, 000 One 2011 400, 000 One 2012 90, 000

Amount 29 of EWT: In 2009 In 2010 In 2011 In 2012 - not subject P 20, 000 x 1% = P 200. 00 P 100, 000 x 2% = P 1, 000 not subject

INCOME PAYMENTS SUBJEC TO EWT N. Income payments made by the gov’t. to its local/resident supplier of goods/services other than those covered by other wtax rates O. Commissions of independent and/or exclusive sales representatives, and marketing agents and companies DESCRIPTION Supplier of goods – 1% Supplier of services – 2% 10% on gross commissions, rebates, discounts, and other similar considerations 30

INCOME PAYMENTS SUBJEC TO EWT P. Tolling fees paid to refineries DESCRIPTION 5% on gross processing/tolling fees Q. Payments made by 1% on gross payments pre-need companies to funeral parlor R. Payments to embalmers 1% on gross payment 31

INCOME PAYMENTS SUBJEC TO EWT S. Income payments to suppliers of agricultural products DESCRIPTION 1% (suspended until further notice pursuant to RR 3 -2004) T. Income payments on 10% on income payments purchases of minerals, mineral products and quarry resources as defined and discussed in Sec. 151 of the Tax Code 32

INCOME PAYMENTS SUBJEC TO EWT DESCRIPTION U. MERALCO payments V. Interest income on the 10% / 20% refund paid either through direct payment or application against customers’ billing by other electric distribution utilities. 33

INCOME PAYMENTS SUBJECT TO EWT DESCRIPTION W. Income payments made by the top 5, 000 individual taxpayers to their local/resident supplier of goods/services other than those covered by other w/tax rates Individuals engaged in trade or business including non resident aliens engaged in trade or business in the Philippines. Withholding tax on Agricultural Purchases in their original state shall apply on excess of the cumulative amount of P 300, 000 within the same taxable year. Supplier of goods – 1% Supplier of services – 2% 34

UPDATE ON EXPANDED WITHHOLDING TAX REGULATIONS RMC 38 -2011 and RMC 49 -2011 35

RMC 38 -2011 (on EWT) 36 PAYMENTS OF PHIC TO: medical practitioners are subject to 10% or 15% EWT Hospitals/clinics for medical services (facility fee) provided to PHIC members are subject to 2% Expanded Withholding Tax

Illustration 37 Patient A was confined in Hospital X, a PHIC-accredited hospital. Patient A, being a PHIC member, accomplished PHIC Form and submitted the same to Hospital X. Upon settlement of the bills, he only paid an amount net of PHIC benefits. Based on the hospital bills, the patient’s PHIC benefits include the following: Professional Fees P 4, 000 Facility Fee 10, 000 Total P 14, 000

Q 1 38 How much should be the tax to be withheld by PHIC?

Q 1 39 Answer: Withholding on Professional Fees* (P 4, 000 x 15%**) Php 600. 00 Withholding on Facility Fees (P 10, 000 x 2%) 200. 00 Total *Non-VAT Registered Taxpayer Php 800. 00 ** On the assumption that the medical practitioner did not submit a sworn declaration of his gross income.

Q 2 40 Will the total amount of P 14, 000 be reflected in the Official Receipt (OR) to be issued by Hospital X?

Q 2 41 Answer: No. Hospital X shall issue the OR only for the amount pertaining to the facility fee, which is P 10, 000. With respect to the PF of P 4, 000, the concerned medical practitioner shall issue the OR.

Q 3 42 What amount should be reflected in the Certificate of Income and Tax Withheld that will be issued by PHIC?

Q 3 43 Answer: PHIC to issue Form 2307 in the following manner: In name of Hospital X In the name of the Med. Prac. Income Payment P 10, 000. 00 P 4, 000. 00 Withholding Tax 200. 00 600. 00

RMC 49 -2011 44 I. COVERED UNDER THE NEW PHILHEALTH CASE RATE PROGRAM PHIC to pay the entire rate case amount directly to hospital/clinic/facility PHIC to withhold 2% on the entire case rate payment

RMC 49 -2011 45 The hospital/clinic/facility shall withhold 10% or 15% EWT on its payment to medical practitioner Government Hospitals shall withhold taxes on Gov’t. Money Payments • 5% for VAT-Reg. Medical Practitioners • 3% for Non-VAT Registered Medical Practitioners

RMC 49 -2011 46 II. NOT COVERED UNDER THE NEW PHILHEALTH CASE RATE PROGRAM PHIC to pay PF directly to the medical practitioner Facility Fee to the hospital/clinic PHIC to withhold 10% or 15% EWT on its payment to medical practitioner 2% on Facility Fee for hospital/clinic 5% VAT Withholding on its payment to VAT Reg. Medical Practitioner or 3% Percentage Tax Withholding on Non. VAT Registered Medical Practitioner

Using the same illustration, the proper withholding shall be as follows: 47 NOT COVERED BY PHIC CASE RATE PROGRAM PHIC shall withhold 10%/15% EWT on PF If Medical Prac. is VAT Reg. (P 4, 000/112%) x 15%*=P 535. 71 If Medical Prac. is Non-VAT Reg. P 4, 000 x 15% * = P 600. 00 PHIC shall withhold 2% from Facility Fee PHIC shall also withhold 5% VAT or 3% Percentage Tax for Non-VAT Medical Practitioner on PF only P 10, 000 x 2% =P 200. 00 If Medical Prac. is VAT Reg. (P 4, 000/112%) x 5%=P 178. 57 If Medical Prac. is Non-VAT Reg. P 4, 000 x 3% = P 120. 00 *on the assumption that medical practitioner did not submit sworn declaration of income

Illustration # 2 48 Patient A was confined in Hospital X, a PHIC-accredited hospital for Dengue II (Dengue Fever and DHF Grades III & IV). Patient A, being a PHIC member, accomplished PHIC Form and submitted the same to Hospital X. Upon settlement of his hospital bills, he only paid an amount net of his PHIC benefits. Based on Phil. Health Circulars Nos. 011 -2011, 011 -A-2011 and 011 -B-2011, Dengue is covered under the Case Rate Program; and pursuant to the aforementioned Phil. Health Circulars, the entire case rate shall be paid to the concerned facility provider. Dengue II (Dengue Fever and DHF Grades III & IV) –P 16, 000

RMC 49 -2011 49 FOR THOSE COVERED UNDER THE RATE CASE PROGRAM, PHIC SHALL WITHHOLD THE FOLLOWING ON ITS ENTIRE PAYMENT TO HOSPITAL/ CLINIC/ FACILITY: 2% EWT on the entire amount P 16, 000 x 2% On Gov’t. Money Payments None (being exempt from VAT pursuant to Sec. 109(G) of the Tax Code of 1997)

Assume Hospital X paid P 4, 800 PF to the Medical Practitioner 50 If Hospital X is CASE a non-government COVERED BY PHIC RATE PROGRAM hospital 10%/15% Expanded Withholding Tax For VAT-Reg. Medical Practitioner (P 4, 800/112%) x 15%* = P 642. 85 For NON-VAT-Reg. Medical Practitioner PHIC shall NOT withhold 10%/15% EWTP 4, 800 on PF x 15%* = P 720. 00 Withholding on Gov’t. Money Payment None (being a non-government hospital) *on the assumption that medical practitioner did not submit sworn declaration of income

Assume the Hospital X paid P 4, 800 PF to the Medical Practitioner 51 If Hospital. BY X PHIC is a government hospital COVERED CASE RATE PROGRAM 10%/15% Expanded Withholding Tax For VAT-Reg. Medical Practitioner (P 4, 800/112%) x 15%* = P 642. 85 For NON-VAT-Reg. Medical Practitioner P 4, 800 x 15%* = P 720. 00 PHIC shall NOT withhold 10%/15% EWT on PF Withholding on Gov’t. Money For VAT-Reg. Medical Practitioner Payment (P 4, 800/112%) x 5% = P 214. 29 For NON-VAT-Reg. Medical Practitioner P 4, 800 x 3% = P 144. 00 *on the assumption that medical practitioner did not submit sworn declaration of income

RMC 21 -2005 52 Sourcing, Pooling and Distribution of Phil. Health Common Fund PF for services rendered by salaried public health providers may be retained by health care institution for distribution among health personnel Shall not be subject to 10% EWT by PHIC

RMC 21 -2005 53 The public health institution upon the distribution of their personnel shall be responsible for: Withholding the corresponding tax on compensation Include in Form 2316 Include in Form 1604 CF For disbursements other than distribution to personnel Shall withhold appropriate taxes as provided under RR 2 -98, as amended

VAT TREATMENT OF THE PAYMENT FOR SECURITY SERVICES (RMC 39 -2007) 54

I. BACKGROUND 55 INCOME TAX: v. Cash basis or Accrual basis may be adopted as accounting method for reporting of income v. The timing of the imposition of the tax depends on the accounting method employed.

VALUE-ADDED TAX: 56 v v Seller of Services, including security agencies, have to be taxed solely on the Cash Basis – upon actual or constructive receipt of income

VALUE-ADDED TAX: 57 v. Gross Receipts – must constitute the gross income of the taxpayer when received or earned. v. If amount received does not form part of gross income, the same cannot be part of gross receipts subject to VAT.

58 Do the salaries of security guards form part of the taxable gross receipts of a security agency? Prior to RMC 39 -2007: § § Salaries of the security guards are actually the liability of the agency, hence, includible in its gross receipts for business tax purposes. BIR Ruling Nos. 69 -02, 049 -85 and 271 -81

RMC 39 -2007: § 59 Liability of the security agencies for the prescribed increases in the wage rates of workers are explicitly required to be borne by the principal or clients of the service contractor pursuant to Sec 6 of RA 6727 (The Wage Rationalization Act)

RMC 39 -2007: 60 § Sec 1, Rule XIV of the 1994 Revised Rules and Regulations implementing RA 5487 provided that the monies received by the agency from its clients as an amount reserved for the remuneration of the guard or detective must be segregated.

RMC 39 -2007: 61 § Security Agency has no control or dominion over the portion of the payment received from its client which is intended or earmarked as salaries of the guards. § Only receipts which a taxpayer is free to enjoy at his option is taxed to him as his income. (Corliss v Bowers, 281 U. S. 376)

II. INCOME TAX TREATMENT OF THE PAYMENTS MADE TO SECURITY AGENCY: 62 1. On the Part of the Security Agency: v Agency Fee (amount net of VAT) – part of gross income subject to income tax v Security Guards’ Salaries – LIABILITY Ø If the Contract does not provide for a breakdown of the amount payable to the Security Agency, the entire amount representing the Contract Price will be taxed as income to the Agency, which must form part of its gross receipts.

Illustration: 63 Assume that Vigilant Security Agency, Inc. was contracted by Tanzo Jewelry Corp. , to provide security services to the latter’s store. The contract price on a monthly basis is P 18, 000. 00 broken down into: Security Guards’ Salaries of P 14, 179. 08 and Agency Fee of P 3, 820. 92 (inclusive of VAT)

Journal Entries: 64 Debit: Cash Prepaid Income Tax (2% EWT on agency fee) 17, 931. 77 68. 23 Credit: Service Income (agency fee) Output Tax (on agency fee) Due to Security Guards 3, 411. 54 409. 38 14, 179. 08

Journal Entries: 65 Upon Payment of the Security Guards’ Salaries: Debit: Due to Security Guard 14, 179. 08 Credit: Cash Withholding Tax Payable Ø The 12, 617. 11 1, 541. 97 Security Agency who is the trustee of the funds segregated and earmarked as salaries of the security guards is the withholding agent for purposes of the withholding tax on compensation.

2. On the Part of the Client or User of Security Services: 66 Journal Entries: Debit: Security Services-Agency Fee 3, 411. 54 Security Services-SG Salaries 14, 179. 08 Input Tax (only on Agency Fee) 409. 38 Credit: Cash WHT Payable(2% EWT on agency fee) 17, 931. 77 68. 23

VAT TREATMENT OF THE PAYMENTS FOR SECURITY 67 SERVICES: 1. On the Part of the Security Agency: v 12% Output Tax shall be based on the Agency Fee which in turn will be the Input Tax of its Client. v Salaries of the Security Guards will not form part of the its gross receipts subject to VAT but shall be recognized as a LIABILITY of the security agency.

VAT TREATMENT OF THE PAYMENTS FOR SECURITY SERVICES: 68 2. On the Part of the Client: v Input Tax credit is based on the Agency Fee paid by the Client. v VAT official receipt must be issued to the Client.

VAT TREATMENT OF THE PAYMENTS FOR SECURITY SERVICES: 69 2. On the Part of the Client: v The Client can not claim Input Tax Credit on the salary portion of the Security Services Expense because it pertains to service Exempt from VAT pursuant to Sec 109 (I) of the NIRCServices rendered by individual pursuant to employee-employer relationship

MANNER OF ISSUING RECEIPT FOR THE ENTIRE CONTRACT PRICE: 70 On the Agency Fee: v VAT Official Receipt must be issued pursuant to Sec 113 of the NIRC as implemented by Sec. 4. 113 -1 of RR 16 -2005. v The receipt should cover only the amount of Agency Fee paid with the indication that such amount received includes the VAT. The VAT must be shown as a separate item in the VAT Official Receipt.

MANNER OF ISSUING RECEIPT FOR THE ENTIRE CONTRACT PRICE: 71 On the Security Guards’ Salaries: v Must be covered by a Non-VAT Acknowledgement Receipt. v Duly Notarized Certification of the Expanded Withholding Taxes (see ANNEX A of this RMC) must also be submitted.

WITHHOLDING TAX COMPLIANCE: 72 On the Agency Fees: v. The Client is constituted as the withholding agent of the EWT (following the rule on RR 2 -98, as amended by RR 30 -03).

WITHHOLDING TAX COMPLIANCE: 73 On the Security Guards’ Salaries: v The Security Agency shall be the one responsible for the Withholding of Tax on Compensation. v While it is the Client who claims the payment as an expense, it is the Security Agency who physically controls the payment of salaries of the Security Guards.

WITHHOLDING TAX COMPLIANCE: 74 On the Security Guards’ Salaries: v. Security Agency must Furnish its Client, on or before January 31 of the year following the year of withholding, a Notarized Certification (see Annex A) indicating the names of the guards employed by the Client, their respective TINS, the amount of their salaries and the amount of tax withheld from each.

WITHHOLDING TAX COMPLIANCE: 75 On the Security Guards’ Salaries: The Certification together with the Non. VAT Acknowledgement Receipt must be kept on file by the Client as substantiation for the claim of the expense. v

ON MANDATORY ATTACHMENTS (RR 2 -2006) 76

REVENUE REGULATIONS NO. 2 -2006 MANDATORY ATTACHMENTS : 1. S U M M A R Y A L P H A L I S T 77 O F W I T H H O L D I N G AGENTS OF INCOME PAYMENTS SUBJECTED TO TAX WITHHELD AT SOURCE (SAWT) TO TAX RETURNS WITH CLAIMED TAX CREDITS DUE TO CREDITABLE TAX WITHHELD AT SOURCE

REVENUE REGULATIONS NO. 2 -2006 2. MONTHLY ALPHALIST OF PAYEES (MAP) WHOSE INCOME RECEIVED HAVE BEEN S U B J E C T E D T O W I T H 78 HOLDING TAX IN THE WITHHOLDING TAX REMITTANCE RETURN FILED BY THE WITHHOLDING AGENT/PAYOR OF INCOME PAYMENTS

SAWT- defined 79 a consolidated Summary alphalist of withholding agents from whom income was earned or received and subjected to withholding tax S- Summary A- Alphalist of withholding agents W- subjected to Withholding T- Tax

SAWT - defined 80 to be submitted by the payee-recipient of income as attachment to its duly filed return for a given period which Summary List contains a summary of information showing, among others, total amounts of income/gross sales/gross receipts and claimed tax credits taken from all Certificates of Creditable Withholding Tax at Source (BIR Form Nos. 2307/2304/2306/2316) issued by the payors of income payment

FORMAT Annex “A” BIR REGISTERED NAME TRADE NAME ADDRESS TIN SUMMARY ALPHALIST OF WITHHOLDING AGENTS OF INCOME PAYMENTS SUBJECTED TO WITHHOLDING TAX AT SOURCE (SAWT) From ________ to _________ Seq no. 1 TIN Including branch code Registered name (Alphalist) 3 2 Return period From Return Period To Mm/dd/yy 4 a 4 b ATC 5 Nature of income payment 6 AMOUNT Tax base 7 Tax rate 8 Tax Withheld 9 1 2 3 4 5 TOTAL P is true and I declare under the penalties of perjury, that this certificate has been made in good faith, verified by me, and to the best of my knowledge and belief, AMOUNT correct pursuant to the provisions of the NIRC, and the regulations issued under the authority thereof ; that the information contained herein completely reflects a summary of information on all Certificates of Creditable Withholding Tax at Source (BIR Form No. 2307/2304/2306/2316) issued by the payor; that, the income payments has been declared part of the gross income/receipt in the our Income Tax/ VAT/ Percentage Tax Returns where the taxable income was earned or received; that, the information appearing herein is consistent with the information contained in the Certificate of Tax Withheld at Source and that, inconsistent information shall result to denial of the claims for refund/tax credit. _ _____________ Signature over printed name Taxpayer/Authorized representative Attachments to BIR Form Nos. 1700, 1701 Q, 1701, 1702 Q, 811702, 2550 M, 2550 Q, 2551 M, 2553

Monthly Alphalist of Payees(MAP) 82 is a consolidated alphalist of income earners from whom taxes have been withheld by the payor of income for a given return period and in whose behalf, the taxes were remitted. It contains a summary of information on taxes withheld and remitted through the monthly remittance returns (BIR Form Nos. 1601 E, 1601 -F, 1600) showing , among others, total amounts of income/gross sales/gross receipts and taxes withheld and remitted.

FORMAT Annex “B” BIR REGISTERED NAME TRADE NAME ADDRESS TIN MONTHLY ALPHALIST OF PAYEES (MAP) RETURN PERIOD (mm/yyyy) TIN Seq no. 1 Including branch code Registered Name (Alphalist) 3 Return period mm/yy 4 ATC 5 Nature of income payment 6 AMOUNT Tax base 7 Tax rate 8 Tax Withheld 9 2 1 2 3 4 5 TOTAL P I declare under the penalties of perjury, that this has been made in good faith, verified by me, and to the best of my knowledge and AMOUNT belief, is true and correct pursuant to the provisions of the NIRC, and the regulations issued under the authority thereof; that the information contained herein completely reflects all income payments with the corresponding taxes withheld from payees are duly remitted to the BIR and proper Certificates of Creditable Withholding Tax at Source (BIR Form Nos. 2304/2307/2306/2316) have been issued to payees; that, the information appearing herein shall be consistent with the total amount remitted and that, inconsistent information shall result to denial of the claims for expenses. _____________ Signature over printed name Taxpayer/Authorized representative 83 1601 -F, 1600 Attachments to BIR Form Nos. 1601 -E,

SAWT/MAP 84 Below 10 payees - hard copy 10 or more payees - 3. 5 diskette EFPS regardless of the number of income payees/ income recipient - e-attach

Returns required to be filed with SAWT & Certificate of Creditable Tax Withheld at Source 85 BIR Form No. 1701 Q BIR Form No. 1701 BIR Form No. 1700 BIR Form No. 1702 Q BIR Form No. 1702 BIR Form No. 2550 Q BIR Form No. 2550 M BIR Form No. 2551 M BIR Form No. 2553

1700 1701/Q 2316 SAWT 2307/2316 SAWT 2307 SAWT INCOME 1702/Q RECIPIENTS (PAYEES) BIR 2550 M/Q 2551 M/2553 2307 SAWT Note: Transactions beg. Jan. 1, 2006 – 1702 Q/1701 Q – WITH SAWT 2005 Annual ITR 86 (calendar Jan-Dec) DUE APRIL 15, 2006 –NO SAWT

Returns required to be filed with MAP 87 BIR Form No. 1601 -E BIR Form No. 1601 -F BIR Form No. 1600 The return with the attached MAP shall be filed in three (3) copies to be distributed as follows: Original copy of return with attached MAP - BIR copy Duplicate copy of return with attached MAP - BIR copy Triplicate copy of return with attached MAP - taxpayer’s file copy

1601 -E WITHHOLDING MAP 1601 -F MAP AGENTS (PAYORS) BIR 1600 MAP 88

89 Option 1 - Microsoft Excel Format; Option 2 - Taxpayer’s own extract program; or Option 3 - Data Entry Module developed by the BIR

Required Format in the Submission/ attachment of SAWT/ MAP 90 For option 1 or 2 required to use a validation module of the BIR Only readable diskettes/CD shall be considered as duly filed or attached to the required return.

RETENTION OF THE HARD COPY OF THE CERTIFICATES OF TAX WITHHELD 91 It shall always be retained within the period prescribed in the law for the preservation of books of accounts and accounting records presentation of said hard copy may be requested during audit to prove the tax credits arising from withholding taxes which are being claimed in the tax returns filed.

Statements and Returns 92 BIR Form 1604 CF – Annual Info Return Due date: Jan. 31 of the succeeding year Employers with centralized accounting system, or those mandated to consolidate remittances (large taxpayers), shall prepare alphalist on a regional basis or per branch office, due to the identification of SMW per region where the employee is assigned, which shall be submitted to the BIR where the head office is registered

Statements and Returns 93 Requirement for List of Payees Less than ten (10) payees Manually prepared alphalist With ten(10) or more payees Manually prepared alphalist + softcopy In diskette/cd/or email: esubmission@bir. gov. ph

IV. WITHHOLDING TAX CERTIFICATES TYPES FORM TIME COMPENSATION 2316 Jan 31 of the ff year For terminated employees - last payment of salary EXPANDED 2304 (Exempt) 20 days ff. close of the quarter or upon demand 2307 (Taxable) GOV’T. MONEY PAYMENTS 2307 For Non-VAT : 10 th day of the ff month 2306 For VAT month FINAL TAX 2306 Jan. 31 of the following year FRINGE BENEFITS 2306 Jan. 31 of the following year 94 : 10 th day on the month ff

V. ANNUAL RETURNS TYPE COMPENSATION FORM 1604 CF DESCRIPTION Alphalist of employees TIME Jan. 31 of the ff year Less than 10 employees – manual filing 10 employees or more - softcopy e. FPS Filer - e-attach EXPANDED 1604 E Alphalist of payees Less than 10 payees or more e. FPS Filer 95 – manual filing - softcopy - e-attach March 1 of the ff year

96 The End