New Rules on Withholding Agents for Purchases of Services and Goods

(Revenue Regulations No. 11-2018)

This Tax Alert is issued to inform all concerned on the new rules in determining the taxpayers required to withhold on purchases of goods and services other than those covered by other rates of withholding tax.

Under RR No. 11-2018, a new classification of withholding agents is created, top withholding agents, who are required to withhold 1% on purchases of goods and 2% on purchases of services:

Taxpayers classified and duly notified by the Commissioner as such

Large taxpayers
Top 20,000 corporations
Top 5000 individuals

2. Identified Medium Taxpayers and those under Taxpayer Account Management Program (TAMP)

Additional top withholding agents shall be published in newspapers or on the BIR website. This shall serve as their “notice” as top withholding agents. The obligation to withhold starts on the first day of the month following the month of publication.

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