Prescribing the Use of the Updated Government Money Payment Chart

August 10, 2009 REVENUE MEMORANDUM CIRCULAR NO. 056-09 SUBJECT : Prescribing the Use of the Updated Government Money Payment Chart (Annex "A") to Implement Sections 2.57.2, 4.114 and 5.116 of Revenue Regulations (RR) No. 2-98, as Amended by RR No. 16-2005, in Relation to Sections 57 (B), 114 (C) and 116 to 123 of Republic Act (RA) No. 8424, as Amended by RA No. 9337, Amending for the Purpose Revenue Memorandum Circular No. 5-2006 (RMC 5-2006) TO : All Government Withholding Agents, Internal Revenue Officials, Employees and Others Concerned For the information and guidance of all government withholding agents, internal revenue officials, employees and others concerned, the Government Money Payment Chart under RMC 5-2006 prescribing the withholding tax rates to be used in the computation of taxes to be withheld (creditable and final) on the sale of goods and services to the government or to any of its political subdivisions including barangays, instrumentalities or agencies, and government-owned or controlled-corporations (GOCCs), is hereby updated/amended. This new Government Money Payment Chart which is attached hereto as Annex "A" and made an integral part hereof, takes into consideration the new rates provided in RR Nos. 12-2001, 14-2002, 17-2003, 30-2003, 16-2005 and other related issuances. aACHDS All concerned are hereby enjoined to give this circular as wide a publicity as possible. (SGD.) SIXTO S. ESQUIVIAS IV Commissioner of Internal Revenue ANNEX A Government Money Payment Chart Creditable Final Nature of Income Payment Income Percentage VAT Total Income Payments Classification Tax (Goods or Service) BIR Form BIR Form BIR Form No. 1601-E No. 1600 No. 1600 Maintenance and Operating Expenses Payment for Communication Services (PLDT, Smart, Globe, Sun, etc.) Service 2% 3% 5% 5% or 7% Payment for Repairs & Maintenance of Government Facilities and Vehicles Service 2% 3% 5% 5% or 7% Payment for Transport of Goods, Merchandise, Cargo domestic air, sea & land (within the Phils.) Service 2% 3% 5% 5% or 7% domestic air, sea & land (Phils. to foreign country) Service 2% NONE NONE 2% International Air & Sea Carriers (Phils. to foreign) Service 2% 3% NONE 5% Payment for Transport of Passengers domestic air & sea (w/in the Phils.) Service 2% NONE 5% 7% domestic land (w/in the Phils.) Service 2% 3% NONE 5% International air & sea (Phils. to foreign) Service 2% 3% NONE 5% Payment for Purchase of Supplies & Materials, including equipments Goods 1% 3% 5% 4% or 6% Payment for Rental of Properties: 1. Real Property Service 5% 3% 5% 8% or 10% 2. Cinematographic films Service 5% 3% 5% 8% or 10% 3. Personal Property Service 5% 3% 5% 8% or 10% (see NOTE No. 1) Payment for: a. Use or Lease of property Service NONE NONE 12% 12% or property rights to non-resident owner b. Services rendered by local Service NONE NONE 12% 12% insurance companies with respect to reinsurance premiums payable to non-residents c. Other services rendered Service NONE NONE 12% 12% in the Phil. by non-residents Payment to Water Distribution Utilities Manila Water Company, Inc. Service 2% NONE 5% 7% Maynilad Water Services, Inc. (MWSI) * Service 2% NONE 5% 7% * Income Tax Holiday up to December 31, 2009 (BIR Ruling No. DA-278-2009) Service NONE NONE 5% 5% Other water utilities Service 2% 2% 5% 4% or 7% Payment to Power Distribution Utilities Service 2% NONE 5% 7% Meralco, VECO, etc. Electric Cooperatives 1. Registered with NEA Service NONE NONE 5% 5% 2. Registered with CDA a. Do not transact Service NONE NONE 5% 5% with non-members b. Transacting with Service members and non-members b.1 With members Service NONE NONE 5% 5% b.2 With non-members Service NONE NONE 5% 5% and have an accumulated reserve and undivided net savings of not more than P10M b.3 With non-members Service NONE NONE 5% 5% and have an accumulated reserve and undivided net savings of more than P10M (see RMC 72-2003) Payment to Cooperatives: (Other than Electric Cooperatives duly registered with CDA) A. 1. With BIR issued Service NONE NONE NONE NONE exemption certificate 2. Without BIR issued 2% NONE 5% 7% exemption certificate B. 1. With BIR exemption Goods NONE NONE NONE NONE certificate 2. Without BIR exemption 1% NONE 5% 6% certificate Payment for Trainings Service 2% 3% 5% 5% or 7% and Seminars Payment for Purchase of Gasoline/Petroleum Products Goods 1% 3% 5% 4% or 6% Payment for Services Service 2% 3% 5% 5% or 7% Rendered by Gasoline Stations Payment of Insurance Premiums Non-Life Service 2% 3% 5% 5% or 7% Life Service 2% 5% NONE 7% Payment for Purchase of Library Books Goods 1% NONE NONE 1% Payment for Purchase of Other Library Materials Goods 1% 3% 5% 4% or 6% Payment for Services of Service 2% 3% 5% 5% or 7% the following contractors: Security, Janitorial, Maintenance of aircon, computers, elevators, etc. Payment of Professional Service NONE 3% 5% 3% or 5% Services Rendered by General Professional Partnership (GPP) Payment of Professional Fee Service 10% or 15% 3% 5% 13% or 15% Paid to Taxable Juridical Person and 18% or 20% Payment of Professional Fee Service 10% or 15% 3% 5% 13% or 15% Paid to Individuals and 18% (see NOTE No. 2) or 20% Payment for Purchase of Other Goods 1% 3% 5% 4% or 6% Goods (see NOTE No. 3) Payment for Purchase of Goods 1% NONE NONE 1% Agricultural Products (see NOTE No. 4) Payment of Commissions or Service 10% 3% 5% 13% or 15% Service Fees Paid to Customs, Insurance, Real Estate, Stock, Immigration and Commercial Brokers Payment for Purchase of Services 2% 3% 5% 5% or 7% Services Other Than Those Covered by Other Rates of Withholding Tax (RR No. 17-2003) (see NOTE No. 8) Capital Outlay For Purchase of Land 1.5%, 3%, 5% or 6% 3% 5% 4.5%, 6%, Classified as Ordinary Asset 8%, 9% or 6.5%, 8%, 10%, 11% For Land Improvements Goods 1% 3% 5% 4% or 6% Service 2% 3% 5% 5% or 7% For Buildings and Improvements Straight Contract Service 2% 3% 5% 5% or 7% (Labor & Materials) Separate Invoice/Billing Goods 1% 3% 5% 4% or 6% for Materials Separate Invoice/Billing Service 2% 3% 5% 5% or 7% for Labor For Furniture, Fixtures, Goods 1% 3% 5% 4% or 6% Equipment For Information Technology Goods 1% 3% 5% 4% or 6% (IT) Equipment Service 2% 3% 5% 5% or 7% Payment to Radio & TV Service 2% 3% NONE 5% Broadcasting Companies Whose Annual Gross Receipts do not Exceed P10M & Who are Non VAT-registered taxpayer Payment to Agents of Foreign Service 2% 10% NONE 12% Insurance Companies Insurance Agents Payment to Agents of Foreign Service 2% 5% NONE 7% Insurance Companies Owner of the Property Payment for sale, barter or Service 2% 1/2 of 1% NONE 2.5% exchange of stocks listed and traded through Local Stock Exchange Payment for shares of stock sold or exchanged through initial and secondary public offering - Not over 25% Service 2% 4% NONE 6% - Over 25% but not Service 2% 2% NONE 4% exceeding 33 1/3% - Over 33 1/3% Service 2% 1% NONE 3% Payment to Banks and Non-Bank Financial Intermediaries Performing Quasi-Banking Functions (see NOTE No. 5) 1. On interests, commissions Service 2% 5% NONE 7% and discounts from lending activities as well as income from financial leasing, on the basis of remaining maturities of instruments from which such receipts are derived: - Maturity period is five Service 2% 5% NONE 7% years or less - Maturity period is more Service 2% 1% NONE 3% than five years 2. On dividends and equity Service 2% 0% NONE 2% shares and net income of subsidiaries 3. On the following payments treated as gross income under Section 32 of the Tax Code. - Royalties Service NONE 7% NONE 7% - Rental of Property Service 5% 7% NONE 12% - Profits for exchange Service NONE 7% NONE 7% and all other items treated as gross income under Section n 4. On the net trading gains Service NONE 7% NONE 7% within the taxable year on foreign currency, debt securities, derivatives, and other similar financial instruments NOTE: 1. For rental of personal properties in excess of P10,000.00 annually except those under financial lease arrangement with leasing and finance companies under R.A. No. 8556 (Financing Company Act of 1998). 2. 15% EWT if the payee's current year's income exceeds P720,000 and 10% if otherwise pursuant to RR No. 30-2003. 3. For casual or single purchase of goods and services worth P10,000 and above pursuant to Section 3 (N) of RR No. 17-2003 except purchase of agricultural products in their original state such as corn, coconut, copra, palay, etc. pursuant to Section 2 of RR 6-2009. 4. Please refer to Revenue Memorandum Circular Nos. 44-2007 and 45-2007 (RMC 44-2007/45-2007) and RR 6-2009. 5. Please refer to Section 121 of RA 8424 as amended by RA 9337. n Note from the Publisher: Copied verbatim from the official document.