BIR clarifies rules on creditable withholding tax on TWAs
MANILA, Philippines — The Bureau of Internal Revenue (BIR) advises all top withholding agents (TWA), manufacturers, direct importers, taxpayers, and other stakeholders that it has issued a circular clarifying the provision on the imposition of creditable withholding tax (CWT) on TWAs.
The clarification is contained in Revenue Memorandum Circular (RMC) No. 79-2026 and applies to Revenue Regulations (RR) No. 24-2025.
The circular answers frequently asked questions on the implementation of the revenue regulations, including the application of the 0.5% CWT on purchases from manufacturers and direct importers of covered goods intended for wholesale.
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It also clarifies the documentary requirements for establishing a supplier’s status, the proper interpretation of “intended for wholesale,” and the circumstances under which the preferential 0.5% CWT rate applies.
The circular also clarifies the application of the withholding tax rules to purchases involving motor vehicles, whether completely built unit (CBU) or semi-knocked down (SKD), motorcycles, pharmaceutical products, and solid and liquid fuels and related products.
It also prescribes the appropriate corrective measures when an incorrect withholding tax rate has been applied.
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The issuance aims to promote the uniform implementation of RR No. 24-2025, provide clearer guidance to withholding agents and taxpayers, and ensure the proper application of withholding tax rules in covered transactions.
For the full text of the circular, click this link: RMC No. 79-2026. /atm
