ATC Changes for Joint Venture Withholding Tax

On April 30, 2024, the Bureau of Internal Revenue (BIR) of the Republic of the Philippines issued Revenue Memorandum Order No. 18-2024. This memorandum focuses on the modification of the Alphanumeric Tax Code (ATC) for creditable withholding tax on certain income payments by joint ventures and consortiums. This update is crucial for ensuring proper identification and monitoring of payments, aligning with the latest Revenue Regulations (RR) No. 14-2023.

Objective

The primary objective of this memorandum is to facilitate the accurate identification and monitoring of creditable withholding tax payments on income by joint ventures and consortiums. This is in response to the issuance of Revenue Regulations (RR) No. 14-2023. The modifications aim to streamline the process and ensure compliance with the updated tax codes.

Modifications to the Alphanumeric Tax Code (ATC)

The memorandum outlines specific changes to the existing ATCs as per the ATC Handbook. Below are the details of the modifications:

1. Income Payments Made by Joint Ventures to Local/Resident Supplier of Goods

• Existing ATC: WI750 (Individual), WC730 (Corporate)

• Tax Rate: 1%

• Modified/New ATC: WI770 (Individual), WC770 (Corporate)

2. Income Payments Made by Joint Ventures to Local/Resident Supplier of Services

• Existing ATC: WI760 (Individual), WC740 (Corporate)

• Tax Rate: 2%

• BIR Form No.: 1601-EQ/2307

• Legal Basis: RR No. 14-2023

• Modified/New ATC: WI780 (Individual), WC780 (Corporate)

3. Share of Each Co-Venturer/Member from Net Income of Joint Venture/Consortium Not Taxable as Corporation

• Existing ATC: WC750 (Corporate)

• Tax Rate: 15%

• Modified/New ATC: WC790 (Corporate)

Repealing Clause

This Revenue Memorandum Order (RMO) revises portions of all other issuances that are inconsistent with the provisions outlined in this document.

Effectivity

The modifications specified in this RMO shall take effect immediately upon issuance.

Conclusion

The modification of the Alphanumeric Tax Code (ATC) for creditable withholding tax on certain income payments by joint ventures and consortiums is a significant step towards ensuring compliance and proper tax monitoring. By aligning with the latest Revenue Regulations (RR) No. 14-2023, the Bureau of Internal Revenue (BIR) aims to streamline tax processes and enhance the accuracy of tax payments.

Reference: RMO No. 18-2024