V3 Smart Technologies

(Phil) Inc.
SHORT DISCUSSION ON REVENUE MEMORANDUM CIRCULAR 80-
2022 AND RMO 12-2013 AND IT’S TAX IMPLICATION
February 6, 2023
BIR TERMINOLOGIES
 TWA – TOP WITHHOLDING AGENTS
Taxpayers whose gross sales/receipts, or gross purchases, or claimed deductible
itemized expenses, as the case may be, amounted to TWELVE MILLION PESOS
(P12,000,000) during the preceding taxable year.

 EWT – EXPANDED WITHHOLDING TAX

An Expanded Withholding Tax is a tax prescribed on income payments and is
creditable against the payor's income tax due

 CERTTIFICATE OF WITHHOLDING TAX WITHHELD AT SOURCE (BIR 2307)

is a certificate that is accomplished and issued to recipients of income subject to
expanded withholding tax (see sample)
SAMPLE BIR 2307
What are the transactions subject to deduction of
withholding taxes and the applicable rate?

TRANSACTION APPLICABLE RATE

Rental of office, car service etc. 5%
Professional fees 10% or 15%
Subcontracted Services 2%
Directors Fee 15%
Purchase of Materials 1%
Purchase of Services 2%
How to compute EWT? :
 V3 Smart Technologies (Phil) Inc. rented an office space amounting to
112,000.00 from Papa Pi Company, a VAT registered company due on Feb. 28,
2023.
Computation:
Net of VAT – 112,000.00/1.12
= 100,000.00
VAT – 100,000.00 x 12%
= 12,000.00
EWT - 100,000.00 x 1%
= 1,000.00

Amount Due = 111,000.00

FOR NON - VAT
 V3 Smart Technologies (Phil) Inc. hired a consultant for 12,000.00 a month, a
Non-VAT registered company. Due on Feb. 15, 2023
Computation:
Ex VAT = 10,000.00

EWT - 10,000.00 x 5%
= 500.00

Amount Due = 9,500.00

TAX IMPLICATIONS OF NON WITHHOLDING
 This will be subject to deficiency withholding tax assessment
 Will also be subject to Income Tax deficiency since the related expenses will be
disallowed
 Will be subject to penalties, compromise and surcharges by the BUREA OF
INTERNAL REVENUE

INVOICING REQUIREMENTS
1. Company Name : V3 Smart Technologies (Phil) Inc.
2. TIN: 010-482-326-000
3. Address: Unit 301 Sunrise Condo 1 226 Ortigas Ave. Greenhills San Juan City
1502
4. Business style: V3 Smart Technologies (Phil) Inc.
5. Details : Qty. Description Unit Price Total Amount
SAMPLE INVOICE
VATABLE SALES INVOICE NON VAT SALES INVOICE
SAMPLE OFFICIAL RECEIPTS

VATABLE OFFICIAL RECEIPT NON VAT OFFICIAL RECEIPT

QUESTION AND ANSWER:

THANK YOU VERY MUCH!!!