RMO No. 34-2003 — Create , modifie and drop Alphanumeric Tax Code of elected revenue ource ubject to Withholding Tax Dige t | Full Text

REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE BUREAU OF INTERNAL REVENUE Quezon City October 9, 2003 REVENUE MEMORANDUM ORDER NO. 34-2003 SUBJECT : Creation, Modification and Dropping of Alphanumeric Tax Codes (ATC) of Selected Revenue Sources Subject to Withholding Tax TO : All Collection Agents, Revenue District Officers and Other Internal Revenue Officers Concerned I. Objective : To facilitate the proper identification and monitoring of Withholding Taxes based on BIR Form No. 1600, 1601 E, 1601F, 2306 and 2307, and for Integrated Tax System (ITS) purposes. A. The following ATCs are hereby created: ISSUANCE/ ATC LEGAL KIND OF TAXES BASIS/ Income Payments Subject to Final Withholding Taxes REASONS 1. Capital Gains Tax on sale/exchange or other disposition of RR 17-2003 WI 450 real property - Individual ( 6%) Sec. 2.57.1 WC 450 2. Capital gains tax on the sale/exchange or other disposition of (A) (6) land and building - Corporate ( 6%) RR 17-2003 Sec. 2.57.1 (G) (5) Income Payments Subject to Creditable Withholding Taxes 3. Income payments made to suppliers of Agricultural products RR 17-2003 Sec. 2.57.2 (S) - Individual (1%) - Corporate (1%) WI 610 WC 610 4. Income payments on purchases of minerals, mineral products RR 17-2003 and quarry resources Sec. 2.57.2 (T) - Individual (1%) WI 630 - Corporate (1%) WC 630

B. The following descriptions of ATCs are hereby Modified: ISSUANCE/ ATC LEGAL KIND OF TAXES BASIS/ REASONS Income Payments Subject to Creditable Withholding Taxes RR 17-2003 Existing Description New Description Sec. 2.57.2 (G) Amounts paid to certain brokers Gross commission or service and agents; i.e. customs, fees of custom, insurance, insurance, real estate and stock, real estate, commercial brokers and fees of immigration and commercial agents of professional entertainers brokers & fees of agents of ( 5%) professional entertainers - Individual (10%) WI 140 - Corporate (10%) WC 140 Payments for Professional fees paid to medical medical/dental/veterinary RR 17-2003 WI 151 practitioners by Hospitals/Clinics services thru Hospitals/ Clinics/Health Maintenance Sec. 2.57.2 (I) Income payments made by Organizations, including government offices on their direct payments to service RR 17-2003 purchases of goods from local providers (10%) Sec. 2.57.2 (N) suppliers Income payments made by the government to its local/resident suppliers of goods and services - Individual (2%) WI 157 - Corporate (2%) WC 157 Income payments made by Income payments made by top top 10,000 private RR 17-2003 5,000 corporations to local corporations to their Sec. 2.57.2 suppliers of goods local/resident suppliers of goods (M) - Individual (1%) WI 158 - Corporate (1%) WC 158 Income payments made by top 10,000 private corporations to their local/resident suppliers of services Commission of independent and - Individual (2 %) WI 160 exclusive distributors, - Corporate (2 %) WC 160 medical/technical and sales Commission, rebates, representatives and marketing discounts and other similar RR 17-2003 agents of multi-level marketing considerations paid/granted Sec. 2.57.2 (O) to independent and/or exclusive sales WI 515 representatives and WC 515 marketing agents and sub- agents of companies - Individual (10%) - Corporate (10%)

KIND OF TAXES ISSUANCE/ ATC LEGAL Existing Description New Description BASIS/ WB 201 Tax on shares of stock sold or Tax on shares of stock sold REASONS WB202 exchanged through initial public or exchanged through initial offering and secondary public offering Per Memorandum not over 25% - 4% of ACIR, TAS Dated April 9, 2003 over 25% but not exceeding 33 1/3% - 2 % over 33 1/3% - 1% WB203 C. The following ATCs are hereby dropped: KIND OF TAXES ISSUANCE/ ATC 1. On Capital Gains from sale of real properties (Capital Assets) LEGAL II 420 BASIS/ IC 420 2. On Capital Gains from sale of real properties (Capital Assets) REASONS RR 17-2003 Sec. 2.57.1 (A) (6) RR 17-2003 Sec. 2.57.1 (G)(5) 3. Tax on shares of stock sold or exchanged through secondary Per public offering Memorandum - not over 25% - 4% of ACIR, WB 206 - over 25% but not exceeding 33 1/3% - 2% TAS dated WB 207 - over 33 1/3% - 1% April 9, 2003 WB 208 4. On services rendered by stock, real estate, commercial, RR 17-2003 customs, insurance and immigration brokers Sec. 2.57.2 (G) WB 210 II. Repealing Clause : This Revenue Memorandum Order revises portions of all other issuances inconsistent herewith. III. Effectivity : This Revenue Memorandum Order shall take effect immediately. (Original Signed) GUILLERMO L. PARAYNO, Jr. Commissioner of Internal Revenue b-3