Deadline for Remitting the Expanded Withholding Tax on Rental Payment

May 23, 1990 BIR RULING NO. 090-90 50 (b) 000-009 090-90 S i r : This refers to your letter dated September 5, 1989 stating that your rent is 5% of sales or P18,000.00, whichever is higher; that your rent for September, 1989 will therefore be computed after September 30 by the lessor and the bill will be submitted to you about October 5, 1989 and you will make the payment and deduct the 5% expanded withholding tax by about October 7, 1989; that someone in your Office staff says that you should pay the tax to this Office on or before October 10 since the rent corresponds to the month of September; that another says you should pay on or before November 10, inasmuch as payment will be made in October nor is the rent payable in September since the amount will only be determined after September 30; and that you feel that the latter opinion is logical since you will be pressed for time in preparing and making the payment if you follow the first opinion considering that you will have not more than 3 days whereas if the rent is determinable or paid in September you will have the full 10 days allowed by law to make the remittance. Based on the foregoing representations, you now in effect request a ruling as to the deadline for remitting the expanded withholding tax on your rental payment. In reply, please be informed that under Section 3 of Revenue Regulations No. 6-85, as amended, otherwise known as the Revised and Consolidated Expanded Withholding Tax Regulations implementing Section 50(b) of the Tax Code, as amended, the obligation of the payor to deduct and withhold arises at the time an income which is subject to withholding is payable or paid. Under Section 5(a) of said Regulations, the taxes therein deducted and withheld shall be paid upon filing a return in duplicate with the Revenue District Officer or the Collection Agent of the City or duly authorized Treasurer of the Municipality where the withholding agent has his legal residence or principal place of business except in cases where the Commissioner of Internal Revenue allows otherwise. The required return shall be filed within ten (10) days after the end of each month. Accordingly, with respect to rental payments made by you for the month of September, 1989, the 5% expanded withholding tax thereon shall be deducted and withheld at the time said income payment is payable or paid. The taxes deducted and withheld during said month of September 1989, should be remitted/paid to this Office within ten (10) days after September 30 or on or before October 10, 1989. In other words, even if the amount of your rental payment due for the month of September, 1989 cannot as yet be determined until after September 30, when your total sale for the said month could definitely be arrived at, the percentage of said total for the said month upon which the said rental payment is based, could definitely be determined within ten (10) days after said date even without the corresponding bill from your lessor. Therefore, after September 30, 1989 the rental payment as determined is already payable subject to withholding, which as aforesaid should be remitted to this Office upon filing of the corresponding return; i.e., within ten (10) days after September 30, 1989 or on or before October 10, 1989. cd Very truly yours, (SGD.) JOSE U. ONG Commissioner