Previously, we discussed Revenue Memorandum Order (RMO) No. 26-2018, which prescribed guidelines in monitoring and identifying who are the “top withholding agents” (TWAs) of the Bureau of Internal Revenue (BIR). The distinction of being a TWA is not something a taxpayer can brag about, as it imposes additional withholding tax obligations.

Specifically, income payments made by TWAs to their local supplier of goods and services is subject to a 1 percent creditable withholding tax (CWT) for a supplier of goods, and a 2 percent CWT for a supplier of services. Under the RMO, the BIR shall come up with a list showing the taxpayers who shall be included in the current list of TWAs, as well as a list of those who have been delisted.

The list, which shall be published in a newspaper of general circulation as well as posted in the BIR website, shall show the complete names of the TWAs and their respective Revenue District Offices (RDOs)/Large Taxpayer Service (LTS) office where they are registered. Once the list is published, a taxpayer is considered to have been sufficiently notified by the BIR of his TWA status.

Recently, the BIR issued Revenue Memorandum Circular (RMC) No. 86-2018 which provides further guidance on the BIR TWA list. The RMC provides that the TWA list is actually composed of 3 separate lists:

—List of existing TWAs;

—List of additional TWAs; and

—List of withholding agents for deletion from the existing TWA list.

The RMC recommends that taxpayers visit the BIR website, www.bir.gov.ph where the three TWA lists are posted. Once at the home page of the BIR website, there is a link “Top Taxpayers” on the righthand side of the page. Click on that, and it will bring you to another link, “Top Withholding Agents”, which contains the three TWA lists as discussed above. The lists are further broken down into individual and non-individual.

You will also notice that the lists have been scanned from a newspaper and contains the date Oct. 8, 2018, which we assume to be the date that the lists were published. The RMC states that all other TWA lists previously published (which we assume to be previous to October 8) in any newspaper or any other form of publication are repealed and superseded.

As a taxpayer is considered to have been notified by the BIR as of the date of the publication of the list, the obligation of TWAs to withhold the 1 percent CWT for a supplier of goods and 2 percent CWT for a supplier of service shall commence on the first day of the month following the month of publication.

So, what happens if you’re name is on any of the TWA lists? Consider yourself lucky if you have been delisted from the existing TWA list as you no longer have the obligation to withhold on your payments to your local supplier of goods and services. For existing and new TWAs, your obligation to withhold the 1 percent CWT for a supplier of goods and 2 percent CWT for supplier of service shall commence on Nov. 1, 2018.

Manila Times Source

ATTY. PEACHES ARANAS

Managing Partner LMA LAW