RMC No. 47-2023 — Reiterates the proper time of remittance of Withholding Taxes by National Government Agencies and Instrumentalities, Local Government Units, and Government Owned and Controlled Corporations

REPUBLIC OF THE PHILIPPINES

DEPARTMENT OF FINANCE BUREAU OF INTERNAL REVENUE National Office Building Quezon City 0 3 MAY 2023

REVENUE MEMORANDUM CIRCULAR NO. 47. 2023

SUBJECT Reiterating the Proper Time of Remittance of Withholding Taxes by National Government Agencies and Instrumentalities, Local Government Units, and Government Owned and Controlled Corporations

$ TO All Internal Revenue Officers and Others Concerned

Units (LGUs), and Government Owned and Controlled Corporations (GOCCs). taxes by National Government Agencies (NGAs) and instrumentalities, Local Government This Circular is hereby issued to reiterate the proper time of remittance of withholding

recognized as accruals and recorded in their books of accounts. continue the practice of deduction and subsequent remittance of corresponding withholding taxes due from expenditures when it was actually paid, despite such expenditures were earlier There are reports that certain NGAs, LGUs, GOCCs, and other government entities.

the tax was already required under Revenue Regulations (RR) No. 12-2001, amending Section 2.57.4 of RR No. 2-98, which provides the following: Please be informed that, since 2001, the proper time of withholding and remittance of

amended to read as follows: "Section 4. Time of Withholding - Section 2.57.4 of RR 2-98, is hereby

income payment is paid or payable, or the income payment is accrued or recorded as an expense or asset, whichever is applicable,_in the payor's books. Sec. 2.57.4. Time of withholding. -- The obligation of the payor to deduct and withhold the tax under Section 2.57 of these Regulations arises at the time an whichever comes first. The term "payable" refers to the date the obligation becomes due, demandable or legally enforceable.

return period in which the same is claimed as an expense or amortized for tax purposes. x x x " (Underscoring supplied) has been recorded as an expense or asset, whicheyer is applicable, in the pavor's books, the obligation to withhold shall arise in the last month of the Provided..however, that where income is not vet paid or pavable but the same

Commission on Audit in the Government Accounting Manuals for NGAs and LGUs since On the other hand, the accrual basis of accounting was already prescribed by the

the International Public Sector Accounting Standards. Hence, a long period of departure from 2002, pursuant to the Philippine Public Sector Accounting Standards that are harmonized with

BUREAU OF iNtERNAL REVENIE NNNYYG C

MAY 03 223

RECORDS MGIDIVEW

government entities where their duty to deduct and withhold the tax is erroneously grounded. the cash basis of accounting which is, apparently, still being adopted by these concerned

are hereby requested to strictly comply with the proper time of remittance of the withholding tax obligations to avoid payment of the corresponding penalties. Accordingly, all concerned NGAs, LGUs, and GOCCs and other government entities

wide publicity as possible. All internal revenue officers and employees are hereby enjoined to give this Circular a

R LUMAGUI, JR Commissioner of Internal Revenue 007034

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BUREAUOE INFRNAL EN O MAY 03 2023 3 C wtiie

RECORDS M.Y UIT