BIR Ruling [DA-135-03]

April 29, 2003 BIR RULING [DA-135-03] Sec. 57 (B); RR 2-98 Amended by RR 6-2001 & RR 14-2002 Indo Phil Textile Mills, Inc. Unit No. 1205 Medical Plaza, Makati City Attention: L.L. Maglanque Chief Accountant Gentlemen : This refers to your letter dated January 17, 2003 requesting clarification of the applicable rate of withholding tax on income payments made by the top five thousand (5,000) corporations to their local supplier of goods. In reply, please be informed that the applicable rate is still one percent (1%) of the income payment as provided for in Revenue Regulations (Rev. Regs.) No. 2-98, as amended by Rev. Regs. 6-2001, and as last amended by Rev. Regs. 14-2002. There has been no amendment to Rev. Regs. No. 2-98 with respect to the rate of withholding on income payments made by a top 5000 corporation to its local supplier of goods. HEaCcD The withholding tax rate reflected at the back side of the September, 2002 revised BIR Form 1601-E is a mere typographical error that cannot change what is provided in Revenue Regulations No. 2-98, as amended by Rev. Regs. Nos. 6-2001 and 14-2002. Accordingly, the rate of withholding tax on income payments made by the top 5000 corporations to their local suppliers of goods is one percent (1%). Please be guided accordingly. Very truly yours, (SGD.) MARIO C. BUAG Deputy Commissioner Legal & Inspection Group