What Are the BIR Regulations for the Creditable Withholding Tax of Employees?

••• tax time image by Tom Oliveira from Fotolia.com

In the Republic of the Philippines, the Bureau of Internal Revenue, or BIR, regulates how employers prepare taxes. Every employer required to withhold taxes on income payments that are subject to creditable income tax fills out the BIR Form No.1604-E, Annual information Return of Creditable Income Taxes Withheld (Expanded)/Income Payments Exempt from Withholding Tax.


The requirement applies to every withholding payor, agent, non-individual or individual that withholds and deducts income payment taxes to expanded/creditable withholding taxes. According to the BIR, the documents contain an alphabetical listing of the payees. Proof of tax payments for an amended return and the return previously filed should be among the documents.


The necessary procedures for filing the BIR creditable withholding tax form are threefold: Form 1604-E is filled out in triplicate, the form must be presented to the Revenue District Office, and then the individual receives a copy of the stamped and validated form. The deadline for the filing of the form is on or before March 1 of the following calendar year when income payments are subjected to expanded withholding taxes or the payments were exempt from withholding taxes and paid.


Creditable withholding taxes concerning professional fees, talent fees and other services are at specific rates. Entertainers, athletes and directors have fees of 20 percent. Professional practices or callings, such as lawyers, accountants, architects and medical doctors, have a rate fee of 10 percent. Other talent fee recipients, insurance agents, technical consultants and bookkeeping agencies require to pay a fee rate of 10 percent.