Creation, Modification and Dropping of Alphanumeric Tax Codes (ATC) of Selected Revenue Sources Subject to Withholding Tax

October 9, 2003 REVENUE MEMORANDUM ORDER NO. 34-03 SUBJECT : Creation, Modification and Dropping of Alphanumeric Tax Codes (ATC) of Selected Revenue Sources Subject to Withholding Tax TO : All Collection Agents, Revenue District Officers and Other Internal Revenue Officers Concerned I. Objective : To facilitate the proper identification and monitoring of Withholding Taxes based on BIR Form No. 1600, 1601 E, 1601F, 2306 and 2307, and for Integrated Tax System. (ITS) purposes. A. The following ATCs are hereby created: ISSUANCE/ ATC KIND OF TAXES LEGAL BASIS/ REASONS Income Payments Subject to Final Withholding Taxes 1. Capital Gains Tax on sale/exchange or other disposition of RR 17-2003 WI 450 real property Individual (6%) Sec. 2.57.1 (A) (6) 2. Capital gains tax on the sale/exchange or other disposition of RR 17-2003 WC 450 land and building Corporate (6%) Sec. 2.57.1 (G) (5) Income Payments Subject to Creditable Withholding Taxes 3. Income payments made to suppliers of Agricultural products RR 17-2003 Sec. 2.57.2 (S) Individual (1%) WI 610 Corporate (1%) WC-610 4. Income payments on purchases of minerals, mineral products RR 17-2003 and quarry resources Sec. 2.57.2 (T) Individual (1%) WI 630 Corporate (1%) WC 630 B. The following descriptions of ATCs are hereby Modified: ISSUANCE/ ATC KIND OF TAXES LEGAL BASIS REASONS Income Payments Subject to Creditable Withholding Taxes Existing Description New Description Amounts paid to certain brokers Gross commission or service and agents; i.e. customs, fees of custom, insurance, insurance, real estate and stock, real estate, RR 17-2003 commercial brokers and fees of immigration and commercial Sec. 2.57.2 (G) agents of professional entertainers brokers & fees of agents of (50%) professional entertainers Individual (10%) WI 140 Corporate (10%) WC 140 Professional fees paid to medical Payments for practitioners by Hospitals/Clinics medical/dental/veterinary services thru Hospitals/ RR 17-2003 WI 151 Clinics/Health Maintenance Sec. 2.57.2 (I) Organizations, including direct payments to service providers (10%) Income payments made by Income payments made by government offices on their The government to its RR 17-2003 purchases of goods from local local/resident suppliers of Sec. 2.57.2 (N) suppliers goods and services Individual (2%) W 157 Corporate (2%) WC 157 Income payments made by top Income payments made by 5,000 corporations to local top 10,000 private RR 17-2003 suppliers of goods corporations to their Sec. 2.57.2 local/resident suppliers of (M) goods Individual (1%) WI 158 Corporate (1%) WC 158 Income payments made by top 10,000 private corporations to their local/resident suppliers of services Individual (2 %) WI 160 Corporate (2 %) WC 160 Commission of independent and Commission, rebates, exclusive distributors, discounts and other similar medical/technical and sales considerations paid/granted RR 17-2003 representatives and marketing to independent and/or Sec. 2.57.2 (O) agents of multi-level marketing exclusive sales representatives and marketing agent and sub- agents of companies Individual (10%) Corporate (10%) WI 515 WC 515 Tax on shares of stock sold or Tax on shares of stock sold exchanged through initial public or exchanged through initial Per offering and secondary public offering Memorandum of ACIR TAS not over 25% 4 % Dated WB 201 April 9, 2003 over 25% but not exceeding 33 1/3% 2 % WB202 over 33 1/3% 1 % WB203 C. The following ATCs are hereby dropped: ISSUANCE/ ATC KIND OF TAXES LEGAL BASIS/ REASONS 1. On Capital Gains from sale of real properties (Capital Assets) RR 7-20 II 420 Sec. 2.57.1 (A) (6) 2. On Capital Gains from sale of real properties (Capital Assets) RR 17-2003 IC 420 Sec. 2.57.1 (G)(5) 3. Tax on shares of stock sold or exchanged through secondary public offering Per Memorandum not over 25% 4% of ACIR, WB 206 over 25% but not exceeding 33 1/3% 2% TAS dated WB 207 over 33 1/3% 1% April 9, 2003 WB 208 4. On services rendered by stock, real estate, commercial RR 17-2003 customs, insurance and immigration brokers Sec. 2.512 (G) WB 210 II. Repealing Clause: This Revenue Memorandum Order revises portions of all other issuances inconsistent herewith. III. Effectivity: This Revenue Memorandum Order shall take effect immediately. (SGD.) GUILLERMO L. PARAYNO, JR. Commissioner of Internal Revenue