In the taxpayer's accounting books, it is included in the assets section, since Form 2307 is reflected as prepayments of income tax. Income tax prepayments are deductible from your income tax during the quarterly and annual income tax filing. Since Form 2307 Sample functions as income tax credits, it is imperative that the beneficiary take note of this when filing Income Tax Returns, as it is legitimate proof of withholding tax. Otherwise, you will not be allowed to claim your tax credit.
Who must retain the EWT?
All registered taxpayers must retain items subject to EWT.
Apart from that, Revenue Regulation (RR) No. 11-2018 basically provides the list of taxpayers aimed at withholding the EWT from revenue payments to regular providers at 2% in services and 1% in goods. These taxpayers are identified as Top Withholding Agents (TWA).
If you received form BIR 2307, here is what to do.
To ensure that the tax withholding amount is correctly accepted as a tax credit on the income tax liability, be sure to properly file BIR Form 2307 along with the Quarterly / Annual Income Tax Return. Always take note of the deadlines.
Below are the forms to which the certificate must be attached:
-Income tax return
-Extended Withholding Tax (EWT)
-Percentage tax
-VAT withholding
In addition to this, you must enter this in your SAWT or Summary of the Alphabetical List of Withholding Tax at Source, which is done monthly. This serves as the detailed list of certificates your company received during the month.
My company was the one that issued form 2307. Shall we finish then?
No. As a withholding agent, there are still quite a few forms that you need to complete and submit the following:
- 0619E - Monthly remittance of creditable income tax withheld
So he withheld taxes. That's not yours to keep. You must send the money together with this payment form through the authorized agent banks of BIR.
- 1601-EQ - Quarterly Statement of Creditable Income Tax Remittances Withheld
This is the summary quarterly version of the taxes withheld.
- QAP: quarterly alphabetical list of beneficiaries
You best site must also provide details of the summary quarterly version, which is generally called an alpha list of beneficiaries from whom you withheld taxes. This is what they call the attachment or the support list for the 1601-EQ. If you add the transaction totals from the QAP, it must match the numbers reported in the 1601-EQ.
- 1604-E - Annual Information Statement of Creditable Income Tax Withheld (Extended) / Income Payments Exempt From Tax Withholding
This is the annualized version of the taxes withheld for the year.
- Alphabetical list of beneficiaries: annualized
At the end of the year, you must send the government the alphabetical list of beneficiaries that was paid throughout the year.
How can we automate the tedious task of entering and generating these reports?
Yes, we understand how difficult and time-consuming these tasks are, but it is the law and you must follow it. However, we can make things easier for you!
How?
Here at QNE Philippines all you need to do is enter or load a particular transaction once. Once we have the required information, everything will be automated. You don't need to keep track of these confusing forms. We can even file the reports electronically for you!
What is FORM BIR 2550Q
BIR Form 2550Q, also known as Quarterly Value Added Tax Return, is a form of sales tax that applies to the sale or exchange of goods and services in the Philippines. Serving as a form of indirect tax, VAT is transferred to the buyer who consumes the product / service.