Philippines withholding tax, especially Expanded Withholding Tax (EWT) on professional fees and other payments.
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Form 2307 Purpose
Form 2307 is the certificate issued by the withholding agent (payor) to the payee, documenting the tax withheld. The payee uses this to claim creditable withholding tax against their income tax liability.
FWT nature
Final withholding tax is withheld at source and constitutes the full tax on the income. The payee does NOT include this income in the regular ITR.
Rendered from the canonical facts model · method attested Jul 13, 2026 (covers the method, not the currency of individual figures). General reference only — confirm with a qualified professional before acting.
Quick Reference
| Field | Value |
|---|---|
| Country | Philippines |
| Tax | Withholding Tax (Creditable and Final) |
| Currency | PHP (₱) only |
| Tax year | Calendar year |
| Primary legislation | NIRC Sections 57-58, as amended; RR 2-98, as amended by RR 11-2018 and RR 14-2023 |
| Tax authority | Bureau of Internal Revenue (BIR) |
| Validated by | Pending |
| Validation date | Pending |
| Skill version | 1.0 |
Key Distinction
| Type | Treatment |
|---|---|
| Creditable Withholding Tax (CWT / EWT) | Withheld tax is creditable against final income tax liability; payee reports gross income and claims credit |
| Final Withholding Tax (FWT) | Tax withheld constitutes the full and final tax; payee does NOT report this income in the ITR |
Rates -- Individual Payees
| Annual Gross Income of Payee | EWT Rate |
|---|---|
| ≤₱3,000,000 | 5% |
| >₱3,000,000 | 10% |
Rates -- Non-Individual (Corporate) Payees
| Annual Gross Income of Payee | EWT Rate |
|---|---|
| ≤₱720,000 | 10% |
| >₱720,000 | 15% |
To apply the lower EWT rate (5% for individuals, 10% for corporates):
Requirements table
| Requirement | Detail |
|---|---|
| Sworn Declaration | Payee must submit Annex B-1 (multiple payors), B-2 (single payor), or B-3 (non-individual) |
| With COR | Attach copy of BIR Certificate of Registration (Form 2303) |
| Deadline | By 15 January of each year, or before first payment for new engagements |
| Default if not submitted | Higher rate applies (10% for individuals, 15% for corporates) |
EWT on professional fees applies to licensed professionals under PRC and Supreme Court, including:
Other Common EWT Rates
| Payment Type | Rate |
|---|---|
| Rentals -- real property | 5% |
| Rentals -- personal property (≥₱10,000) | 5% |
| Income payments to contractors/subcontractors | 2% |
| Income payments by top withholding agents (goods) | 1% |
| Income payments by top withholding agents (services) | 2% |
| Commission payments to agents | 5%/10% (individual) |
| Interest on deposits and deposit substitutes | 20% (final) |
| Royalties | 20% (final) |
| Prizes (>₱10,000) | 20% (final) |
| Dividends (from domestic corp to individual) | 10% (final) |
Key Information on Form 2307
| Field | Content |
|---|---|
| Withholding Agent TIN | Payor's Tax Identification Number |
| Payee TIN | Recipient's Tax Identification Number |
| Period covered | Quarter/year of the payments |
| Income payment | Gross amount paid |
| Tax withheld | Amount withheld at the applicable EWT rate |
| ATC (Alphanumeric Tax Code) | Identifies the type of income and applicable rate |
Common ATCs for Professional Fees
| ATC | Description | Rate |
|---|---|---|
| WI100 | Professional fees -- individual (≤₱3M) | 5% |
| WI010 | Professional fees -- individual (>₱3M) | 10% |
| WC100 | Professional fees -- corporate (≤₱720K) | 10% |
| WC010 | Professional fees -- corporate (>₱720K) | 15% |
Quarterly Remittance
| Form | Purpose | Deadline |
|---|---|---|
| Form 1601-EQ | Quarterly Remittance Return of Creditable Income Taxes Withheld (Expanded) | Last day of the month following the close of the quarter |
| Attachments | Quarterly Alphalist of Payees (QAP) | Filed with Form 1601-EQ |
Monthly Remittance
| Form | Purpose | Deadline |
|---|---|---|
| Form 0619-E | Monthly Remittance Return of Creditable Income Taxes Withheld (Expanded) | 10th day of the following month (for months 1 and 2 of each quarter) |
Annual Information Return (BIR guidance on Form 1604-E. Corrected by Jonathan I. Ruiz (CPA, Philippines))
| Form | Purpose | Deadline |
|---|---|---|
| Form 1604-E | Annual Information Return of Creditable Income Taxes Withheld (Expanded) | On or before 1 March of the following year (NOT 31 January — that is the 1604-C / 1604-F deadline) |
| Attachments | Annual Alphalist of Payees | Filed with Form 1604-E |
Common FWT Rates
| Income Type | Rate |
|---|---|
| Interest on bank deposits (PHP) | 20% |
| Interest on long-term deposits (>5 years) | Exempt |
| Royalties (books, literary, musical) | 10% |
| Royalties (other) | 20% |
| Prizes (>₱10,000) | 20% |
| PCSO/lotto winnings (>₱10,000) | 20% |
| Dividends from domestic corporation | 10% |
| Capital gains on sale of shares (not traded) | 15% |
| Capital gains tax on real property | 6% |
FWT Forms
| Form | Purpose | Deadline |
|---|---|---|
| Form 1601-FQ | Quarterly Final Withholding Tax | Last day of month following quarter end |
| Form 1604-F | Annual Final Withholding Tax | 31 January of following year |
Situation: CPA bills client ₱100,000 for consulting. CPA's annual gross receipts are under ₱3M and sworn declaration has been submitted.
Withholding: ₱100,000 × 5% = ₱5,000 withheld. Client pays ₱95,000 net and issues Form 2307 for ₱5,000.
CPA's ITR: Reports ₱100,000 gross income. Claims ₱5,000 creditable tax.
Situation: Same CPA, but did not submit Annex B-1.
Withholding: Higher rate applies: ₱100,000 × 10% = ₱10,000. Client pays ₱90,000 net.
Situation: Accounting firm (corporation) bills ₱500,000. Annual gross >₱720,000.
Withholding: ₱500,000 × 15% = ₱75,000 withheld.
Penalties (NIRC ss.248–250, 255; RR 21-2018. Corrected by Jonathan I. Ruiz (CPA, Philippines))
| Offence | Penalty |
|---|---|
| Failure to withhold | Withholding agent liable for the amount not withheld + 25% surcharge + 12% interest per annum |
| Failure to remit | 25% surcharge + 12% interest per annum (NIRC s.249 as amended by TRAIN; RR 21-2018 — the old 20% has not applied since 2018) |
| Failure to issue Form 2307 | Fine PHP 1,000 per failure |
| Failure to file Form 1604-E (an INFORMATION return) | NIRC s.250: PHP 1,000 per failure, capped at PHP 25,000 per calendar year |
| Failure to file Form 1601-EQ (a REMITTANCE return, tax due) | Ordinary failure-to-file exposure: 25% surcharge + 12% interest on the unremitted tax, plus potential NIRC s.255 criminal liability for wilful non-filing — NOT a flat PHP 1,000 |
| Late filing | 25% surcharge on tax due |
Key BIR Issuances
| Issuance | Topic |
|---|---|
| RR 2-98 | Original withholding tax regulations |
| RR 11-2018 | TRAIN Law amendments to withholding |
| RR 14-2023 | Further amendments |
| RMO 23-2018 | Guidelines on 8% income tax rate election |
Key Forms Summary
| Form | Who Files | Purpose |
|---|---|---|
| 2307 | Withholding agent → payee | Certificate of creditable tax withheld |
| 0619-E | Withholding agent | Monthly remittance (months 1, 2 of quarter) |
| 1601-EQ | Withholding agent | Quarterly remittance |
| 1604-E | Withholding agent | Annual information return |
| 1601-FQ | Withholding agent | Quarterly final withholding tax |
| 1604-F | Withholding agent | Annual final withholding tax |
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Review status
Accountant-reviewed
Reviewed by a named licensed practitioner against the stated sources, as general reference material.
Accountant-reviewed
Reviewed by Jonathan I. Ruiz CPA · 13 July 2026
Applicable period: 2025
A named accountant reviewed this complete Guide version within the stated scope. It is not a guarantee.
View review record →Other Philippines computations in the OpenAccountants Tax Library.
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