Imposing Creditable Withholding Tax on Certain Income Payments by Joint Ventures/Consortiums

The bureau has issued Revenue Regulations (RR) No. 14-2023 to further implement Section 57 (B) of the provisions of Sections 244 and 245 of the National Internal Revenue Code of 1997, as amended, and subsequently amend RR No. 2-98 by adding items (V) and (W) imposing creditable withholding tax on certain income payments by joint ventures/consortiums.

The amendments stated in RR No. 14-2023 are as follows:

SECTION 2. AMENDMENTS. - The pertinent provisions of Section 2.57.2 of RR No. 2-98, as amended, is hereby further amended to read as follows:

"Sec. 2.57.2. Income Payments Subject to Creditable Withholding Tax and Rates Prescribed Thereon. Except as herein otherwise provided, there shall be withheld a creditable income tax at the rates herein specified for each class of payee from the following items of income payments to persons residing in the Philippines:

xxx    xxx    xxx

(V) Income payment made by joint ventures/consortiums. - Income payments made by joint ventures, whether incorporated or not, taxable or non-taxable, to their local/resident supplier of goods and services, shall be subjected to the following withholding tax rates:

Supplier of goods - One percent (1%)

Supplier of services - Two percent (2%)

(W) Distributive share of co-ventures/members from the net income of the joint venture/consortium not taxable as corporation. - On the share of each co-venturer/member from the net income of the joint venture/consortium not taxable as corporation prior to actual or constructive distribution thereof - Fifteen percent (15%)

xxx     xxx     xxx"

 Please refer RR No. 14-2023 dated October 2, 2023 of the full text of the said regulations.

Exemption from Issuance of Receipts or Sales or Commercial Invoices by Agricultural Producers

Agricultural Producers have an important role of the growth and success of Agricultural Food Products (Farm Produce, Livestock, Poultry, Marine Product, Ordinary Salt & Agricultural Inputs) in the community. 

Revenue Regulations (RR) No. 12-2023 has issued by the bureau to implement Section 237 of the Tax Code, as amended, relative to the issuance of receipts or sales or commercial invoices by Agricultural Producers.

Under Section 4 of these Regulations has described the Exemption from Issuance of Receipts or Invoices for ease of doing business by the Agricultural Producers of their Agricultural Food Products, provided, that the gross sales/receipts for the year shall not exceed One Million Pesos (P1,000,000.00). Provided, further, however, that Agricultural Producers shall record each sale transaction in a simplified sales book containing the following information:

a. date of transaction;

b. description of goods sold or services rendered;

c. registered name, registered address, and Taxpayer Identification Number (TIN) of the purchaser if engaged in business;

d. amount of sales;

e. amount of tax withheld, if any, and the

f. net amount received

Provided, finally, if the annual gross sales/receipts exceed One Millions Pesos (P1,000,000.00) at any time during the taxable year, the Agricultural Producer shall be required to issue official receipt/sales invoices for every subsequent transaction valued at P100.00 or more. For this purpose, the Agricultural Producer, for the first year of business operation or one year from registration, shall be allowed to purchase and use BIR-printed receipts or BIR-printed invoices from the Revenue District Office (RDO) where they will register pursuant to Section 6 of these Regulations. The Agricultural Producer shall thereafter be require to issue official receipts/sales invoices printed pursuant to an Authority to Print (ATP).

The Agricultural Producer shall still be exempt from the issuance of receipt or invoice even if he or she derives income from the sale of goods or services other than Agricultural Food Products as described in these Regulations, provided that that, the annual aggregate gross sales/receipts shall not exceed One Million Pesos (P1,000,000.00). Provided further, the primary activity of the Agricultural Producer shall not exceed thirty percent (30%) of the aggregate sales or receipt of the Agricultural Producer for a given taxable year.

Please refer RR No. 12-2023 of the full text of these Regulations.