Gross payments made by top withholding agents to manufacturers or direct importers for covered goods intended for wholesale are subject to a preferential 0.5% creditable withholding tax (CWT), the Bureau of Internal Revenue (BIR) said in a circular. The BIR issued Revenue Memorandum Circular No. 79-2026 on Monday, as reported by BusinessWorld.
The circular seeks to clarify when top withholding agents should apply the 0.5% CWT rate on purchases of certain goods for wholesale. Covered transactions include those involving specific product categories, though the full list is detailed in the memorandum. The measure aims to streamline tax compliance for large-scale wholesale activities.
The new rules apply only to purchases intended for wholesale, not retail, and are effective immediately. Taxpayers are advised to review the circular to ensure proper application of the withholding tax rate.