Withholding Tax
Withholding Taxes is a corporate tax obligation paid by taxpayers engaged in trade or business activities in the Philippines. Employers withhold from the salary of their employees every month and each amount withheld serves as an advanced payment for the employer’s Income Taxes during the business year.
Types of Withholding Taxes for Businesses
There are different types of withholding taxes for corporations and individuals in the Philippines — namely, the Expanded Withholding Tax, Withholding Tax on Compensation, and Final Withholding Tax.
An Expanded Withholding Tax is a tax prescribed on income payments and is creditable against the payor’s income tax due. Withholding Tax on Compensation deducts and withholds taxes from employees receiving compensation income while Final Withholding Tax is the final payment of the employer’s tax income. It is prescribed for certain payors and is non-creditable towards the payee’s income tax due for the taxable year.
Who Shall File Withholding Taxes?
According to BIR’s guidelines, each withholding tax return must be filed in three copies by the withholding agent or payor. They are required to “deduct and withhold taxes on income payments” subject to Expanded Withholding Tax, Withholding Tax on Compensation, and Final Withholding Tax.
Taxpayers in the Philippines who engage in trade or business are required to withhold their income payments, unless the government imposes exemptions. There are specifically two entities required to withhold creditable income taxes:
- Taxpayers required to file all withholding taxes (e.g., Top Withholding Agents); or
- Taxpayers who are not required to withhold taxes except for several income payments, such as but not limited to:
a. Professional and Talent Fees for Services Rendered;
b. Rentals;
c. Income Payments to Certain Contractors; and
d. Income Distribution to the Beneficiaries.
Table of BIR Forms for Withholding Tax
| BIR Form | Form Name | Type of Withholding Tax | Prescribed Filing Period* |
| 0619E | Monthly Remittance Return of Creditable Income Taxes Withheld (Expanded) | Expanded Withholding Tax | Manual: 10th day of the following month. |
| 0619-F | Monthly Remittance Return of Final Income Taxes Withheld | Final Withholding Tax | Manual: 10th day of the following month. |
| 1601C | Monthly Remittance Return of Income Taxes Withheld on Compensation | Withholding Tax on Compensation | Manual (January to November): 10th day of the following month. Manual (December): On or before January 15 of the following year. |
| 1601-EQ | Quarterly Remittance Return of Creditable Income Taxes Withheld (Expanded) | Expanded Withholding Tax | Last day of the month following the quarter. |
| 1601-FQ | Quarterly Remittance Return of Final Income Taxes Withheld | Final Withholding Tax | Last day of the month following the quarter. |
| 1604E | Annual Information Return of Creditable Income Taxes Withheld (Expanded) / Income Payments Exempt From Withholding Taxes | Expanded Withholding Tax | March 1 of the year following the calendar year in which the income payments subject to expanded withholding taxes or exempt from withholding tax were paid. |
| 1604CF | Annual Income Return of Income Tax Withheld on Compensation and Final Withholding Taxes | Withholding Tax on Compensation/ Final Withholding Tax | January 31 of the year following the calendar year in which the compensation and other income payments subject to final withholding taxes were paid. |
*Deadlines may vary for clients who are registered under the Electronic Filing and Payment System (eFPS)
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