PUBLISHED: July 30, 2021 What is Expanded Withholding Tax (EWT)?
Expanded Withholding Tax Philippines (EWT) is a kind of withholding tax on certain income payments. The Withholding of Creditable Tax at Source or Expanded Withholding Tax is a tax imposed and prescribed on the items of income payable to natural and/or juridical persons, living in the Philippines, by a payor-corporation/person which shall be credited against the income tax liability of the taxpayer for the taxable year. This is remitted to the BIR.
Expanded Withholding Tax Philippines (EWT) Characteristics
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- It is withheld from certain income payments.
- It is creditable against the income tax due of the payee (the person to whom payment is due).
- This tax must be remitted by the withholding agent to the government through the BIR.
Expanded Withholding Tax Philippines (EWT) Rates
| Tax Codes | Payment Made to: | Description | Tax Rate |
| Payments of Professional fees (CPA’s, Lawyers, Engineers, etc.) | |||
| WI010 | Individual | – if the gross income of payee for the year does not exceed ₱3 Million | 5% |
| WI011 | Individual | – if the gross income of payee for the year exceeds ₱3 Million | 10% |
| WC010 | Corporate | – if the gross income of payee for the year does not exceed ₱720,000 | 10% |
| WC011 | Corporate | – if the gross income of payee for the year exceeds ₱720,000 | 15% |
| WI100 | Individual | Payments of Rentals | 5% |
| WI120 | Individual | Payments to Contractors | 2% |
| WC100 | Corporate | Payments of Rentals | 5% |
| WC120 | Corporate | Payments to Contractors | 2% |
Companies who are designated by the BIR as Top Withholding Agents (TWA) and companies who are under the Taxpayer Account Management Program (TAMP), certain withholding taxes are mandatory.
| Tax Codes | Payment Made to: | Description | Tax Rate |
| WI158 | Individual | Payments to supplier of services | 1% |
| WI160 | Individual | Payments to supplier of goods | 2% |
| WC158 | Corporate | Payments to supplier of services | 1% |
| WC160 | Corporate | Payments to supplier of goods | 2% |
Withholding agents are also obliged to issue to the payee a signed BIR Form 2307 that contains all the information and amount of tax withheld from such payments. This certificate will serve as an evidence of the credit claim of the payee against the payee’s annual income tax due.
When to file Expanded Withholding Tax Philippines (EWT)?
BIR 1604E shall be filled on or before March 1 of the year following the calendar year in which the income payments subject to expanded withholding taxes or exempt from withholding tax were paid.
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