Orientation on Withholding Tax for Job Order Personnel

Report
Orientation on Withholding Tax
for Job Order Contractors
BUREAU OF INTERNAL REVENUE
REVENUE REGION 19, DAVAO CITY
Susan D. Tusoy, CPA, MPS
Asst. Chief, Assessment Division
Upon Registration
Use Form 1901 for self-employed
Job Orders
Use Form 1902 for Employed
Registration type
Non-VAT Taxpayer
•Not subject to percentage tax
•Subject to percentage tax
VAT Taxpayer
• Engaged in VAT taxable transaction
• Sales/Receipts exceed the threshold
• Those who opt to register
Self-Employed/Engaged in
Business or Practice of Profession
Subject to:
Registration Requirement (Form 1901)
Annual Registration Fee
Quarterly Income Tax Return (1st – 3rd qtr)
Annual Income Tax Return
Monthly Percentage Tax or VAT Returns
Books of Accounts
Issuance of Invoices
Percentage Tax
Subject to 3% percentage tax
Gross sales/receipts for not exceed the
VAT threshold
Use form 2551M
Due every 20th day of the following month
VAT
Threshold is P1,919,500.00
Monthly VAT – use Form 2550M
due every 20th day of the following month
For the 1st two months of the quarter
Quarterly VAT – use Form 2550Q
Due every 25th day of the following quarter
For every quarter ending
Withholding Tax
Creditable Against Income Tax
 2% EWT for those not engaged in the practice of
profession (services)
or
 10% or 15% for those engaged in the practice of
profession (licensed holder)
Withholding Tax
Creditable against Percentage Tax (for Non-VAT)
3% of gross receipts
Withholding Tax on VAT by gov’t. agencies
5% creditable against VAT (for VAT taxpayer)
Job Order Contractor
Services rendered by job order personnel
shall not be considered as government
service
No employer-employee relationship
Said personnel are only entitled to the
basic salary of the position
Job Order - Registration
Form – 1901
Where to Register – preferably in the RDO having
jurisdiction over the place of assignment
Due date - 30 days from date of signing of contract
Attachment:
1. photocopy of NSO certified BC of applicant
2. photocopy of NSO certified BC of dependent, if
applicable
3. photocopy of marriage contract, if applicable
REGISTRATION TAX TYPE – FOR JOs
INCOME TAX
REG.
FEE
Licensed Professionals
(whether or not doing
their respective field of
expertise
Non-licensed
professionals/clerical
works
Laborers (when
qualified as MIE)
QUARTERLY
ANNUAL
(special arrangement)
PT /
VAT

×



×


×
×

×
WITHHOLDING TAXES FOR JOs
Expanded WTax
GI<P720K
Licensed Prof. (whether
or not doing their
respective field of
expertise
10%
Business Tax
GI>P720K
% Tax
VAT
15%
3%
5%
(12% if TP will avail of
the substituted filing
under RR 14-2003)
5%
Non-licensed
professionals
2%
2%
3%
(12% if TP will avail of
the substituted filing
under RR 14-2003)
Laborers
2%
n/a
n/a
n/a
Filing of Percentage Tax
Returns for JOs
Qualified taxpayers may avail of substituted filing
by submitting a duly filled-up:
 Annex A (Notice of Availment of the Substituted Filing of
Percenage Tax) of RR 14-2003
Annex E (Notice of Availment of the Option to Pay the
Tax Through the Withholding Tax Process (may not be
necessary because Wtax is mandatory for gov’t agencies)
Filing of VAT Returns for JO
Qualified taxpayers may avail of substituted filing by
submitting a duly filled-up (RR 14-2003):
 Annex B (Notice of Availment of the Substituted Filing of VAT)
Annex C (Sworn Declaration and Waiver of the Privilege to
Claim Input Tax Credits Under Section 110 of the Tax Code)
Annex E (Notice of Availment of the Option to Pay the Tax
Through the Withholding Tax Process (may not be submitted
because Wtax is mandatory for gov’t agencies)
Sample Computation of Income Tax
Optional Standard Deduction
Gross Receipts
Less: Optional Standard Deduction
Net Income
Less: Personal Exemption
Net Taxable Income
Tax Due
Tax Withheld (1st to 4th Qtr)
Quarterly Income Tax Payment
Payable - April 15
(40%)
P 200,000
80,000
P 120,000
50,000
P 70,000
P
4,000
0
8,500
4,000
P 4,500
INCOME TAX TABLE
OVER BUT NOT OVER AMOUNT RATE OF EXCESS OVER
Not over
10,0000
5%
10,000
30,000
500 +
10%
10,000
30,000
70,000
2,500 +
15%
30,000
70,000
140,000
8,500 +
20%
70,000
140,000
250,000
22,500 +
25%
140,000
250,000
500,000
50,000 +
30%
250,000
500,000
over
125,000 +
32%
500,000
Advantages of using optional
standard deduction
shall not be required to submit with his tax
return such financial statements otherwise
required under the Code
shall keep such records pertaining to his
gross sales or gross receipts only
17
Income Tax Due Dates
Income Tax Period
1st Quarter
2nd Quarter
3rd Quarter
Annual Return
Due Date
Individual
April 15
Aug. 15
Nov. 15
April 15
Withholding Agent’s
Responsibility
Issue BIR Form 2306 –Cert. of Final Tax Withheld at Source duly signed
by both the payor and the payee (for lone payor)
shall attach duly signed Form 2306 to BIR Form 1600
For JOs with more than one payors, the Wtax Agent shall issue BIR
FORM 2307 – for Withholding tax on Percentage
- shall be treated ad creditable wtax
The end

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