New criteria in determining Top Withholding Agents

(Revenue Regulations No. 7-2019)

This Tax Alert is issued to inform all concerned on the amended criteria in determining the Top Withholding Agents (TWAs) required to withhold 2% and 1% on purchases of services and goods, respectively.

Pursuant to RR No. 07-2019, TWAs shall refer to those taxpayers whose gross sales/ receipts, gross purchases, or claimed deductible itemized expenses amounted to Php12M during the preceding taxable year.

Previously under RR No. 11-2018, TWAs include only large taxpayers, top 20,000 private corporations, top 5,000 individuals, medium taxpayers, and those under the Taxpayer Account Management Program.

Based on the new criteria, the BIR shall publish the additional top withholding agents and those that are delisted in a newspaper of general circulation and may be posted also in the BIR website. The obligation to withhold shall commence/cease on the first day of the month following the month of publication.

Taxpayers classified as TWA prior to June 29, 2019, the effectivity date of RR No. 7-2019, shall remain as such until failure to satisfy the Php12M criteria and duly published as delisted from the existing list of TWAs.