Thursday, June 1, 2017

Types of Withholding Taxes, Duties & Obligations of a Withholding Agent and Time of Withholding

In my previous blogs, I mentioned about the importance of withholding tax system, persons exempt from withholding tax and persons required to deduct and withhold. This day, the  topics are Types of Withholding Taxes, Time of Withholding and Duties & Obligations of a Withholding Agent.

Types of Withholding Taxes

1. Withholding Tax on Gross Compensation
2. Expanded or Creditable Withholding Tax Service Income. Service Income and Purchases of goods)
3. Final Withholding Tax (Passive Investment Income) - Interest, Dividends, Royalties, Prizes, Winnings and Capital Gain
4. Withholding Tax on Government Money Payment (Income Tax, VAT and Percentage Tax)
5. Quarterly Withholding Tax (Individual Engage in Business or Profession and Corporation)

Duties & Obligations of a Withholding Agent

1. To register
2. To deduct and withhold
3. To remit the tax withheld 
4. To file withholding tax returns
5. To issue withholding tax certificate

Time of Withholding

Ordinarily, the obligation of the payor to deduct and withhold arises:

1. At the an income payment is paid or payable
2. Income payment is accrued or recorded as an expense or asset, whichever is applicable in the payor's books, whichever is come first.

The topic was discussed by Dr. Ruperto P. Somera, Ph. D. DBA, DBE, CPA, a resource speaker of Philippine Institute of Certified Public Accountants (CPAs) of a Seminar on Issues, Problems and Solutions in Tax Audit and Investigation; Comprehensive Discussion of Withholding Tax last May 25, 2017.

No comments:

Post a Comment