New ATC for Withholding Tax by Joint Ventures

The Bureau of Internal Revenue (BIR) of the Philippines has issued a new Revenue Memorandum Order (RMO) No. 14-2023, dated December 20, 2023. This memorandum is crucial for the proper identification and monitoring of payments for creditable withholding tax on certain income payments made by joint ventures or consortiums. The issuance of this RMO is in line with Revenue Regulations (RR) No. 14-2023.

Key Highlights of RMO No. 14-2023

Objective

The primary objective of this RMO is to facilitate the proper identification and monitoring of payments for creditable withholding tax on certain income payments by joint ventures or consortiums. This is achieved through the creation of specific Alphanumeric Tax Codes (ATCs).

Newly Created ATCs

The following ATCs have been created to streamline the process:

1. WI750 / WC730

• Description: Income payments made by joint ventures, whether incorporated or not, taxable or non-taxable, to their local/resident supplier of goods.

• Tax Rate: 1%

• Legal Basis: RR No. 14-2023

• BIR Form No.: Not specified

2. WI760 / WC740

• Description: Income payments made by joint ventures, whether incorporated or not, taxable or non-taxable, to their local/resident supplier of services.

• Tax Rate: 2%

• Legal Basis: RR No. 14-2023

• BIR Form No.: 1601-EQ / 2307

3. WC750

• Description: On the share of each co-venturer/member from the net income of the joint venture/consortium not taxable as a corporation prior to actual or constructive distribution thereof.

• Tax Rate: 15%

• Legal Basis: RR No. 14-2023

• BIR Form No.: Not specified

Repealing Clause

This RMO revises portions of all other issuances that are inconsistent with it, ensuring that the new guidelines are the prevailing rules.

Effectivity

The RMO takes effect immediately upon issuance, ensuring that the new ATCs are to be used without delay.

Conclusion

The issuance of RMO No. 14-2023 by the BIR is a significant step towards improving the efficiency and accuracy of tax collection from joint ventures and consortiums. By creating specific ATCs for different types of income payments, the BIR aims to streamline the process and ensure proper compliance with tax regulations.

Reference: RMO No. 14-2024