creditable withholding tax

[busn_09]

can someone please give insights about creditable withholding tax?

how true is it that only those supported with certificate can only be claimed as deduction?

how about those without certificates?

may expiry date ba ang CWT?

maraming salamat

[pife]

ang cwt ay ini issue ng bumili ng iyong goods or services. may mga kumpanya na required mag deduct ng cwt sa lahat ng kanilang supplier, usually top 20K corp, PEZA/BOI registered companies. at minsan naman lahat ng kumpanya ay kailangan mag deduct ng cwt sa kanilang binili na serbisyo i.e. professional fee, rental.

ang cwt ay "advance tax" na binabayaran ng mga supplier. if you are a professional (excluding general professional partnership) na nag bebenta ng serbisyo, ang withholding tax na binawas ng customer mo is actually an advance tax payment on your side.

so dahil sya ay advance tax payment kailangan mo syang i declare at i deduct sa iyong annual income tax payable, hence the name creditable.

may expiry ba? ang cwt ay dapat na i declare on on the year kapag nag file ka ng annual income tax return. naka attach dapat yung cwt sa itr. e halimbawa kung ang cwt mo ay dated year 2007, at hindi mo sya na i declare ng 2007? puede ba ba sya i declare sa 2008 itr mo? HINDI.

only those with valid certicates can be claimed.

kung nawala mo sya, e di  manghingi ka ng copy sa customer mo. your customer retains 1 copy of cwt.

[busn_09]

further clarification po

usually, late naman nagbibigay ng certificate ang iba

sabi kasi ng iba only those with certificate ang pwede iclaim na deduction sa ITR

question: if in 2010 meron akong 300k na CWT at 200k lang ang may 2307 can i claimed the 300k as deduction? if not, what will happen to the 100k

[syntax]

kailangan po hingin nyo muna yung copy ng 2307 or else di nyo sya magamit as deduction. ina-attach kasi yung mga copy ng 2307 sa ITR.

ito naman po question: binigyan ako ng form 2306 (cert of final tax withheld at source) ng government. Dito nakalagay yung 5% VAT withholding nila sa payment nila sa akin.  pwede ko ba ito gamitin na deduction sa VAT payable kahit na sa form 2550M (monthly VAT declaration) e, hindi ko na nirereflect separately yung sales to government, basta sinasama ko na lang sya sa Total Sales. Ay nalilito na ako. please help.

[jhaypatts]

please read reference:

1. http://www.bir.gov.ph/birforms/form_cer.htm
2. http://www.punongbayan-araullo.com/pnawebsite/pnahome.nsf/section_docs/PM296T_1-4-08

as you can see we can only used creditable withholding tax certificate on the taxable quarter or year only. and assuming your itr have tax credits balance you can use it for the next taxable quarter or year.

in books - bir will disallow tax credits not supported by certificates. also bir will disallow last year certificates

in reality - bir will allow...   - will allow because - at the time of audit you need to present the certificates. this is case to defend yourself ;p so you need to follow up your clients certificate

note: we need to follow up clients in order to avoid this kind of issue/problems.

to syntax:

ref: http://www.punongbayan-araullo.com/pnawebsite/pnahome.nsf/section_docs/QA343G_24-11-05

you can use the vat wtax certificate as deduction to your net vat pyable. see reference for more info

[pinoycpamember01]

ito naman po question: binigyan ako ng form 2306 (cert of final tax withheld at source) ng government. Dito nakalagay yung 5% VAT withholding nila sa payment nila sa akin.  pwede ko ba ito gamitin na deduction sa VAT payable kahit na sa form 2550M (monthly VAT declaration) e, hindi ko na nirereflect separately yung sales to government, basta sinasama ko na lang sya sa Total Sales. Ay nalilito na ako. please help.

The best way to deal with this scenario is to ammend the applicable 2550M or 2550Q for as long as hindi pa close ng year to reflect and separate sales made to government and its agencies.
Kindly check what kind of final tax it is. Normally final taxes can not be used as tax credits.

[pinoycpamember01]

question: if in 2010 meron akong 300k na CWT at 200k lang ang may 2307 can i claimed the 300k as deduction? if not, what will happen to the 100k

You can only claim 200k as tax deduction for the 2010 and the remaining 100k can be applied for 2011.

CWT can be use for a period of 2 years. If ever that the two-year period has lapsed you can go to the RDO to have your CWT revalidated so it can be used for a period extending more than 2 years.