1601E - withholding tax on rentals

[GOwin]

Tinatanong ako ng BIR office kung bakit daw zero yung rate na nilalagay ko sa form eh dapat daw 5% yun. Sabi ko, kasi po according to the BIR website explaining withholding tax eh in excess of 10,000. In fact, my business is home-based.

Ilagay ko daw kung anon'g ruling or law yung basis ko. Ano dapat ang isulat kong ruling or basis?

Link: BIR tax information on Withholding Taxes

[GOwin]

Let me answer the same question I asked. In summary, you don't need to pay the 5% withholding tax if your rent is less than 10,000 a year. However, you are  still required to file form 1601-E, which is due on the 10^th of each month.

The latest ruling on this matter is found in REVENUE REGULATIONS NO. 17-2003, section 3. (aka RR17-2003 sec. 3) issued on March 31, 2003 by the BIR.

       (2)     Personal properties. - On gross rental or lease in excess of Ten Thousand Pesos  P10,000.00) annually for the continued use or possession of personal property used in business which the payor or obligor has not taken or is not taking title, or in which he has no equity, except those under financial lease arrangements with leasing and finance companies authorized to operate under Republic Act No. 8556 (Financing Company Act of 1998). – Five percent (5%)

Electronic copy of this ruling is in here.

Thanks to snowweb for helping me clarify this issue.