RR No. 6-2018 — Revoke Revenue Regulation (RR) No. 12-2013 relative to the requirement for deductibility of certain expen e , thereby rein tating the provi ion of Section 2.58.5 of RR No. 14-2002, a amended by RR No. 17-2003 (Publi hed in Manila Bulletin on January 23, 2018) Dige t |

BUREAU OF INTERNAL REVENUE REPuBLiC oF tHE PHiiLIPPInES DEPARtMENt OF FINANCE Quezon City FUREAU OF INTERNAL REVENUE LECORDS MGT DIVISION RECEIVED JAN 19-2018/4 2:18P.M U/VoA

November 20. 2017

REVENUE REGULATIONS NO. 0-2018

SUBJECT : Revoking Revenue Reguiations (RR) No. 12-2013 Thereby Reinstating the Provisions of Section 2.58.5 of RR No. 14-2002, as Amended by RR No. 17-2003.

TO Concerned. All Withholding Agents, Internal Revenue Officers, Employees and Others

reinstating the provisions of Section 2.58.5 of RR No. 14-2002, as amended by RR No. 17.2003. of the National Internal Revenue Code of 1997. as amended, these regulations are hereby promulgated to revoke RR No. 12-2013, relative to the requirements for deductibility of certain expenses, thereby SECTION 1. SCOPE. - Pursuant to the provisions of Section 244, in relation to Section 34(K)

No. 12-2013 is hereby revoked, in effect, reinstating the provisions stated under RR No. 14-2002, as amended by RR No. 17-2003 to read as follows: SECTION 2. REQUIREMENTS FOR DEDUCTIBILITY OF CERTAIN EXPENSES. - RR

Bureau in accordance with Secs. 57 and 58 of the Code. otherwise deductible under the Code shall be allowed as a deduction from the payor's gross income only if it is shown that the income tax required to be withheld has been paid to the "Sec. 2.58.5. Requirements for Deductibility. - Any income payment which is

was made: A deduction will also be allowed in the following cases where no withholding of ta

surcharges, reinvestigation/reconsideration. agent pays the tax including the interest incident to the failure to withhold the tax. and (A) The payee reported the income and pays the tax due thereon and the withholding if applicable, atthe time of theaudit/investigation O

reinvestigation/reconsideration. withhold the tax, and surcharges, if applicable, at the time of audit/investigation or withholding agent/taxpayer pays the tax, including the interest incident to the failure to (B) The recipient/payee failed to report the income on the due date thereof. but the

between the correct amount and the amount of tax withheld including the interest, incident to such error, and surcharges. if applicable. at the time of the audit/investigation or reinvestigation/reconsideration. (C ) The withholding agent erroneously underwithheld the tax but pays the difference

of raw materials forming part of finished product or purchases of goods for resale, shall be allowed as deductions upon withholding agent's payment of the basic withholding tax and penalties incident to non-withholding or underwithholding." Items of deduction representing return of capital such as those pertaining to purchases

revoked or amended accordingly. issuances or parts thereof which are inconsistent with the provisions of these Regulations are hereby SECTION 3. REPEALING CLAUSE. - A!l existing rules and regulations or any revenue

following publication in any newspaper of general circulation. SECTION 4. EFFECTIVITY. -- These Regulations shall take effect after fifteen (15) days

000578 CARLOS G. DOMIN&UEZ Secretary of Finance JAN 0 5 2018 Recommending Approval:

Commissioner of Internal Revenue Aa$aw&any CAESAR R. DULAY *011725 DUREAU OF INTERNAI REVINUE RECORDS MGT DIVISION RECEIVED JAN 1 9 2018 4:78P. M bMgx