- Hired by Public or Government Sector.
If the income-payer/withholding agent is a government entity, it shall withhold bot income and the applicable business taxes, if any. However, if the payee’s annual gross receipts will not exceed P250,000.00 from a lone payer, the income payments may be exempt from both withholding tax on income upon submission of a Sworn Declaration of Gross Receipts/Sales attached as “Annex B-2” of RR No. 11-2018, together with the copy of the Certificate of Registration (COR) or Copy of the BIR Form 1901 (duly received by the concerned BIR office), and withholding of percentage tax, if payee signified the option to avail the 8% income tax rate regime in the sworn declaration.
- Hired by Private Sector.
If the income-payer/withholding agent is a private entity, it shall withhold income tax only since the corresponding business tax shall be paid by the payee him/herself. However, if the payee’s annual gross receipts will not exceed P250,000.00 from a lone income payer, the income payments may be exempt from withholding tax on income upon submission of a Sworn Declaration of Gross Receipts/Sales attached as “Annex B-2” of RR No. 11-2018 together with the copy of the COR or Copy of the BIR Form 1901 (duly received by the concerned BIR office).
The nature of the service rendered shall determine the applicable withholding tax rates on income. For services rendered by individuals falling under Section 2.57.2 (A) of RR No. 11-2018, the rates prescribed thereon shall be used, and all others not under the aforesaid section, shall be subject to two percent (2%).
when they are checking whether your business is complying with its Tax obligations,