Saturday, November 1, 2014

Requirements for Deductibility of Any Income Payment

Revenue Regulations No. 12-2013 was issued by the BIR amending Section 2.58.5 of revenue Regulations No. 2-98, as amended, Relative to the requirements for Deductibility of Certain Income Payments:

"Sec. 2.58.5. Requirements for Deductibility. - Any income payment which is otherwise deductible under the Code shall be allowed as a deduction from the payor's gross income only if it is shown that the income tax required to be withheld has been paid to the Bureau in accordance with secs. 57 and 58 of the Code.

No deduction will also be allowed notwithstanding payments of withholding tax at the time of the audit investigation or reinvestigation/reconsideration in cases where no withholding of tax was made in accordance with Secs. 57 and 58 of the Code."

Please refer http://www.bir.gov.ph/images/bir_files/old_files/pdf/73009RR%2012-2013.pdf of the full text of the regulations.

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