article banner

Classification of top withholding agents on purchase of goods and services

ON Jan. 31, the Bureau of Internal Revenue (BIR) issued Revenue Regulations (RR) No. 11-2018 to implement the amendments introduced by the Tax Reform for Acceleration and Inclusion Act (Train) Law (Republic Act No. 10963) relative to the withholding of income tax.

RR No. 11-2018 discussed the amendments to income payments subject to creditable withholding tax, as well as the applicable rates. The RR also provides the new classification of top withholding agents. Per Section 2.57.2 of RR, the top withholding agents now include the following:

-Classified and duly notified by the BIR Commissioner as either any of the following, unless previously declassified as such or have already ceased business operations:

-Large taxpayers under RR No. 1-98,

-Top 20,000 private corporations under RR No. 6-2009, and

-Top 5,000 individuals under RR No. 6-2009.

-Taxpayers identified and included as medium taxpayers and those under the Taxpayer Account Management Program (TAMP).

Income payments made by the aforementioned withholding agents to local/resident suppliers and non-resident aliens engaged in trade or business in the Philippines for purchases of goods and services will be subject to a creditable withholding tax of one percent and two percent, respectively.

RR No. 11-2018 further clarifies that “local resident suppliers of goods or services” pertain to suppliers from whom the top withholding agents regularly makes their purchases of goods/services. Casual purchases from non-regular suppliers are not included. However, a single purchase amounting to P10,000 or more is covered by the RR. “Regular suppliers” refer to the suppliers whom the taxpayer-buyer has transacted with at least six times, regardless of the amount per transaction, either in the previous or current year.

The list of top withholding agents will be published in a newspaper of general circulation, and may also be posted on the BIR website. The published list also serves as notice to the top withholding agents. The obligation to withhold begins on the first day of the month following the month of publication.

Please refer to RR No. 11-2018 for more guidelines.


Certified Public Accountants Punongbayan & Araullo (P&A) is the Philippine member firm of Grant Thornton International Ltd.


As published in SunStar Cebu dated 27 March 2018.