Withholding Tax
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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 FormForm NameType of Withholding TaxPrescribed Filing Period*
0619EMonthly Remittance Return of Creditable Income Taxes Withheld (Expanded)Expanded Withholding TaxManual:

10th day of the following month.

0619-FMonthly Remittance Return of Final Income Taxes WithheldFinal Withholding TaxManual:

10th day of the following month.

1601CMonthly Remittance Return of Income Taxes Withheld on CompensationWithholding Tax on CompensationManual (January to November):

10th day of the following month.

Manual (December):

On or before January 15 of the following year.

1601-EQQuarterly Remittance Return of Creditable Income Taxes Withheld (Expanded)Expanded Withholding TaxLast day of the month following the quarter.
1601-FQQuarterly Remittance Return of Final Income Taxes WithheldFinal Withholding TaxLast day of the month following the quarter.
1604EAnnual Information Return of Creditable Income Taxes Withheld (Expanded) / Income Payments Exempt From Withholding TaxesExpanded Withholding TaxMarch 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.
1604CFAnnual Income Return of Income Tax Withheld on Compensation and Final Withholding TaxesWithholding Tax on Compensation/ Final Withholding TaxJanuary 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)

File Your Withholding Tax Returns On Time With Us

We can assist you in filing your tax returns on time and managing your tax filing schedules. Engage with our Certified Public Accountants (CPAs) today to get a headstart.