Withholding tax sounds like a back-office problem until payroll is wrong, a supplier asks for a certificate, or the Bureau of Internal Revenue flags a missing remittance.
In the Philippines, withholding tax is not just about deducting money from salaries. It can apply to compensation, professional fees, rentals, royalties, dividends, supplier payments, and other payments made in the course of business.
This guide explains what is subject to withholding, who is required to withhold tax, and which payments are generally not covered. It is written for employers, HR teams, business owners, finance staff, and employees who want practical answers without drowning in tax jargon.
What Is Withholding Tax?
Withholding tax is a system where a payor deducts part of a payment and remits it to the BIR on behalf of the payee. Think of it as tax collection at the source, before the income fully reaches the taxpayer.
The Bureau of Internal Revenue describes withheld taxes as advance payments that may be credited against the taxpayer’s tax due, depending on the type of withholding involved.
How withholding tax works
In a typical transaction:
- A business, employer, or withholding agent makes a payment.
- The law requires that party to deduct the correct amount of tax withheld.
- The amount withheld is remitted to the BIR.
- The payee receives the net amount.
- The withheld amount may serve as a tax credit, final tax, or compensation tax payment.
For example, when an employee receives salary, the employer may deduct withholding tax on compensation. When a company pays a consultant, the payment may be subject to expanded withholding tax or EWT.
Why withholding tax matters
Withholding tax helps the government collect income tax throughout the calendar year instead of waiting for every taxpayer to pay at year-end.
For businesses, it is also a tax compliance issue. Failing to withhold, deduct, remit, or report the correct amount can lead to BIR tax assessments, penalties, and audit problems.
What Is Subject To Withholding Tax In The Philippines?
Not every payment is automatically subject to withholding tax in the Philippines. The answer depends on the nature of the payment, the recipient, the payor’s status, and the applicable Philippine tax laws.
The practical rule is this: payments made in the course of business should be reviewed before release, especially if they involve compensation, services, rent, passive income, or payments to suppliers.
Compensation paid to employees
Employees are subject to withholding tax on compensation when their taxable income exceeds applicable exemption or threshold rules.
Compensation may include:
- Basic salary
- Wages
- Overtime pay
- Commissions
- Taxable allowance
- Bonuses
- Taxable benefits
- Other amounts forming part of the employee’s gross income
The employer deducts the amount of income tax from the employee’s gross compensation and remits it to the BIR. BIR Form 2316 is used as the Certificate of Compensation Payment/Tax Withheld.
Professional fees and service income
Professional fees are commonly subject to expanded withholding tax.
This may apply to payments to:
- Lawyers
- Accountants
- Doctors
- Engineers
- Architects
- Consultants
- Freelancers
- Creatives
- IT and software service providers
This is where many businesses slip. They treat every vendor invoice the same, when some payments are subject to expanded withholding tax and others are not.
Rentals and lease payments
Rental payments may be subject to EWT, including rent for:
- Office space
- Warehouses
- Equipment
- Vehicles
- Real properties used for business
The payor usually withholds a percentage of the gross rental payment and remits it to the BIR.
Supplier and contractor payments
Certain payments to local suppliers, contractors, and service providers may be subject to withholding tax depending on the transaction and the withholding agent’s classification.
Examples include:
- Contractor fees
- Subcontractor payments
- Maintenance services
- Security and janitorial services
- Business consulting
- Outsourced operational support
BIR guidance on EWT includes several payment categories, including professional fees, rentals, contractors, and certain supplier payments.
Passive income
Some passive income is subject to final withholding tax rather than creditable withholding tax.
This can include:
- Interest income
- Dividends
- Royalties
- Certain winnings
- Other passive income covered by tax laws
For example, BIR regulations identify certain interest, royalty, prize, and winnings income as subject to final withholding tax.
Payments to non-resident individuals or foreign corporations
Payments to a nonresident individual or foreign corporations may be subject to withholding depending on the source of income, tax treaty rules, and Philippine tax laws.
Common examples include:
- Royalty payments
- Service fees
- Dividends
- Interest
- Licensing fees
- Payments to multinational service providers
These transactions need extra care because the rate, documentation, and exemption from withholding may depend on treaty relief or BIR requirements.
Types Of Withholding Tax In The Philippines
The types of withholding tax matter because each one works differently. Some are creditable, some are final, and some are tied directly to payroll.
Withholding tax on compensation
This applies to employee compensation. The employer withholds income tax from salary and other taxable compensation, then remits it to the BIR.
At year-end, the employee receives BIR Form 2316, which summarizes compensation, tax due, and tax withheld.
Expanded withholding tax
Expanded withholding tax, or EWT, applies to certain income payments made to suppliers, professionals, lessors, contractors, and other payees.
Unlike final tax, EWT is generally creditable. This means the payee may use the amount withheld as a tax credit against annual income tax or quarterly income tax, depending on the taxpayer’s filing obligations.
Final withholding tax
Final withholding tax applies to certain income where the amount withheld is already the final tax.
This often covers specific types of passive income, such as certain interest, dividend, royalty, and non-resident income payments. Once the final tax is withheld and remitted, the payee generally does not include that same income in the regular income tax computation.
Who Is Required to Withhold Tax?
A taxpayer is not required to withhold tax just because they are making a payment. The obligation applies when Philippine tax laws or BIR rules classify the payor as a withholding agent for that type of payment.
In simple terms, the person or entity controlling the payment is often the one responsible for withholding.
Employers
Employers are required to withhold tax on taxable compensation paid to employees.
This includes:
- Monthly salary
- Taxable bonuses
- Taxable allowances
- Commissions
- Other taxable compensation
The employer must compute the correct amount, deduct it from payroll, remit it, and issue the proper BIR forms.
Businesses and corporations
Businesses may be required to withhold tax on payments to professionals, suppliers, contractors, landlords, and other payees.
This includes corporations, partnerships, sole proprietors, and entities designated under BIR rules.
Government offices and agencies
Government agencies also act as withholding agents when making certain payments for goods, services, compensation, or other covered transactions.
Payors of passive income
Banks, corporations, and other payors may be required to withhold final tax from interest, dividends, royalties, and similar income.
The payee may never directly “pay” that tax because the amount is withheld before payment is released.
Payments Generally Not Subject To Withholding
Some payments are not subject to withholding tax, but this is where businesses should be careful. “Not subject to withholding” does not always mean “not taxable.” It may simply mean withholding is not required at the point of payment.
Properly documented reimbursements
Reimbursements may not be subject to withholding when they are supported by receipts and are clearly paid back at cost.
For example, if an employee pays for a company expense and submits valid receipts, the reimbursement may be treated differently from an allowance.
Non-taxable or exempt compensation
Certain compensation items may be exempt from withholding tax, depending on the rules and limits.
Examples may include:
- De minimis benefits within allowed limits
- Mandatory employee contributions
- Qualified non-taxable retirement benefits
- Certain non-taxable separation pay
- Other exempt compensation recognized by BIR rules
The BIR withholding tax calculator references non-taxable or exempt compensation items when determining taxable compensation income.
Payments covered by valid exemption
Some payees may qualify for tax exemption or exemption from withholding, but the payor should not rely on verbal claims.
Ask for documentation. Check the BIR website, www.bir.gov.ph, relevant tax information materials, certificates, rulings, or applicable BIR forms before treating a payment as exempt. The BIR website provides access to tax laws, BIR forms, real property zonal values, and tax information materials.
Payments outside withholding coverage
Some payments may fall outside withholding coverage because of the payor’s status, the payee’s classification, the type of transaction, or a specific threshold.
Still, the safest habit is simple: before paying the tax, releasing a supplier payment, or closing payroll, confirm whether withholding applies. That one check can prevent a messy audit later.
Tax Exemption And Exemption From Withholding
Not every payment is taxable, and not every taxable payment requires withholding. These two concepts are often confused, which can lead to payroll errors, incorrect supplier payments, or unnecessary BIR compliance issues. Understanding the distinction helps businesses apply the correct tax treatment and avoid penalties.
What is tax exemption?
A tax exemption means that certain income, transactions, or taxpayers are not subject to a particular tax under Philippine tax laws. If income is exempt, no income tax is due on that amount, provided all legal requirements are met.
Examples of income or entities that may qualify for a tax exemption include:
- Certain government entities
- Qualified nonprofit or charitable organizations
- Income specifically exempt under the National Internal Revenue Code or special laws
- Benefits and compensation classified as non-taxable under applicable regulations
A tax exemption does not automatically remove all filing or documentation requirements. Some exempt entities are still required to maintain records or submit a tax return depending on the applicable rules.
What is exemption from withholding?
An exemption from withholding means the payor is not required to deduct withholding tax from a payment, even though the income itself may still be taxable.
In other words:
- Tax exemption relates to whether income is taxable.
- Exemption from withholding relates to whether tax must be deducted before payment is released.
These are separate concepts. A taxpayer should not assume that qualifying for one automatically qualifies them for the other.
When can exemption from withholding apply?
The Bureau of Internal Revenue (BIR) may allow exemption from withholding in situations provided under tax laws, regulations, or specific rulings. Depending on the transaction, the payee may need to provide supporting documentation before the payor can stop withholding tax.
Examples may include:
- Valid certificates issued by the BIR
- Applicable tax treaty relief for qualified non-resident taxpayers
- Transactions specifically exempt under Philippine tax laws
- Other exemptions recognized by current BIR regulations
Businesses should verify exemption claims before processing payments. Supporting documents should be kept on file in case of a BIR audit or tax assessment.
Best practices for documenting exemptions
Good documentation protects both the payor and the payee. Before treating any payment as exempt, businesses should:
- Request supporting certificates or official documentation.
- Review the applicable BIR regulations and tax information materials.
- Confirm whether the exemption applies to the specific transaction.
- Keep copies of relevant BIR forms and supporting records.
- Check the latest guidance on the BIR website, as exemption rules may change over time.
When in doubt, consult a tax professional rather than relying on assumptions. Incorrectly claiming an exemption can result in additional tax liability, penalties, and interest.
How Withholding Tax Is Computed
The amount of withholding tax depends on the type of payment, the applicable withholding rate, and current BIR regulations. There is no single formula that applies to every transaction, so businesses should identify the payment category before calculating the amount to deduct.
Computing withholding tax on compensation
For employees, withholding tax is generally based on taxable compensation after deducting allowable non-taxable benefits and mandatory contributions.
The process typically involves:
- Determine the employee’s gross compensation.
- Deduct mandatory contributions and non-taxable items.
- Compute the employee’s taxable compensation.
- Apply the applicable withholding tax table.
- Deduct the correct withholding tax from payroll.
Example
| Description | Amount |
|---|---|
| Monthly salary | ₱45,000 |
| Less mandatory contributions | ₱2,500 |
| Taxable compensation | ₱42,500 |
| Applicable withholding tax | Based on current BIR withholding tax table |
The employer then deducts the correct amount before the employee earns their net salary.
Computing expanded withholding tax (EWT)
Expanded Withholding Tax is generally computed using the applicable withholding rate multiplied by the taxable payment.
Formula
- Amount withheld = Taxable payment × Applicable EWT rate
Example
A company hires an IT consultant for ₱100,000.
If the applicable EWT rate is 5%:
- Professional fee: ₱100,000
- EWT: ₱5,000
- Net payment to consultant: ₱95,000
The consultant may later claim the ₱5,000 as a tax credit when filing the appropriate income tax return.
Computing final withholding tax
Final withholding tax follows a similar approach but has a different tax effect.
The payor computes the applicable final tax rate based on the type of income, withholds the required amount, and remits it directly to the BIR. Since the tax is final, the payee generally cannot claim it as a credit against future income tax liability.
For example, certain passive income such as interest, royalties, and dividends may be subject to final withholding tax under applicable BIR regulations.
Try the Withholding Tax Calculator
Estimate the amount withheld and the net payment using common BIR withholding tax rates in the Philippines.
Calculation Summary
Tips for accurate computations
To reduce payroll and accounting errors:
- Use the latest BIR withholding tax tables.
- Verify the applicable rate before making payments.
- Review whether deductions or exemptions apply.
- Update payroll systems whenever tax regulations change.
- Keep supporting computation worksheets for future reference.
Businesses with a high volume of transactions should periodically review their calculations to ensure ongoing tax compliance.
BIR Forms Used For Withholding Tax
Withholding tax responsibilities do not end after deducting the correct amount. Businesses must also file the appropriate BIR forms, issue certificates when required, and maintain accurate records to support future tax filings and audits.
Common BIR forms for withholding tax
The following forms are commonly used for withholding tax reporting and documentation.
| BIR Form | Purpose |
|---|---|
| BIR Form 2316 | Certificate of Compensation Payment/Tax Withheld for employees |
| BIR Form 1601-C | Monthly remittance of withholding tax on compensation (or applicable replacement under current BIR rules) |
| BIR Form 1601-EQ | Quarterly remittance of Expanded Withholding Tax |
| BIR Form 2307 | Certificate of Creditable Tax Withheld at Source |
Because filing requirements may change, businesses should always verify the latest versions of BIR forms through the BIR Electronic Services, eBIRForms, or the official BIR website.
Filing and remittance
Most withholding taxes must be filed and remitted on or before the deadlines prescribed by the Bureau of Internal Revenue.
Businesses can generally submit returns through:
- eBIRForms
- Electronic Filing and Payment System (eFPS), if applicable
- Authorized Agent Banks
- Other payment channels approved by the BIR
Late filing or late remittance may result in penalties, interest, and additional tax assessments.
Recordkeeping requirements
Businesses should retain copies of:
- Filed BIR forms
- Payment confirmations
- Certificates issued to employees or suppliers
- Payroll records
- Supplier invoices
- Supporting contracts
- Computation worksheets
Complete documentation makes responding to audits faster and helps demonstrate compliance with Philippine tax requirements.
Employer Responsibilities For Withholding Tax
Employers play a central role in the withholding tax system. Beyond processing payroll, they are responsible for calculating, withholding, remitting, and reporting taxes accurately throughout the year.
Strong internal processes help reduce payroll errors, support tax compliance, and minimize the risk of penalties during a BIR audit.
Calculate the correct withholding tax
Employers should calculate withholding tax based on the employee’s taxable compensation and the latest withholding tax tables issued by the Bureau of Internal Revenue.
Incorrect calculations can lead to:
- Under-withholding
- Over-withholding
- Payroll adjustments
- Additional tax liability
- Employee disputes
- Deduct and remit taxes on time
Once the correct amount is determined, employers must:
- Deduct the tax from employee compensation.
- Remit withheld taxes within the prescribed deadlines.
- File the corresponding withholding tax returns.
- Maintain proof of payment.
- Timely remittance helps avoid surcharges, interest, and administrative penalties.
- Issue required withholding certificates
Employers are responsible for providing employees with BIR Form 2316, which summarizes compensation paid and taxes withheld during the calendar year.
Employees rely on this document for annual income tax compliance, employment transfers, and financial applications.
Maintain complete payroll records
Accurate documentation is essential for both compliance and audit readiness.
Employers should retain:
- Payroll registers
- Compensation records
- Tax computations
- Filed tax returns
- BIR payment confirmations
- Employee tax declarations
- Supporting payroll adjustments
Well-organized records make it easier to respond to BIR inquiries and resolve discrepancies.
Stay updated on tax regulations
Philippine tax rules continue to evolve through new revenue regulations, revenue memorandum circulars, and other BIR issuances.
To stay compliant, employers should:
- Monitor updates on www.bir.gov.ph.
- Subscribe to official tax information materials.
- Review payroll policies regularly.
- Update payroll software when tax rules change.
- Train HR, payroll, and finance teams on new compliance requirements.
Proactive compliance is often less costly than correcting mistakes after an audit. A regular review of withholding procedures helps ensure the correct amount is withheld, reported, and remitted throughout the year.
What Are An Employee's Responsibilities?
While employers are responsible for withholding and remitting taxes, employees also play an important role in ensuring accurate tax compliance. Reviewing payroll records, understanding deductions, and keeping employment information up to date can help prevent filing issues and unnecessary tax adjustments.
Review your payslip regularly
Employees should review every payslip to confirm that the correct withholding tax has been deducted from their compensation.
Pay attention to:
- Gross salary
- Taxable allowances and benefits
- Mandatory government contributions
- Income tax withheld
- Net pay received
If the amount appears incorrect, raise the issue with your employer’s HR or payroll team as soon as possible.
Keep your tax information updated
Changes in employment or personal circumstances can affect payroll and tax reporting.
Employees should promptly notify their employer when there are updates involving:
- Employment status
- Taxpayer Identification Number (TIN)
- Personal information
- Compensation arrangements
- Multiple employers during the same calendar year
Providing accurate information helps employers prepare the correct BIR forms and reduces the risk of reporting errors.
Keep copies of your tax records
Employees should retain copies of important tax documents, including:
- BIR Form 2316
- Payslips
- Employment contracts
- Certificates of tax withheld
- Other payroll-related documents
These records may be needed when applying for loans, changing employers, filing an annual income tax return when required, or responding to requests from the Bureau of Internal Revenue.
Understand your tax obligations
Even if an employer withholds taxes correctly, employees should understand how withholding affects their overall tax position.
For example, individuals with multiple employers, mixed sources of personal income, or business income may have additional filing obligations beyond payroll withholding.
When in doubt, consult a qualified tax adviser or review the latest guidance published by the BIR.
What Common Withholding Tax Mistakes Should Businesses Avoid?
Most withholding tax issues are not caused by complicated tax laws—they result from routine operational mistakes. A missed deduction, outdated rate, or incorrect supplier classification can create compliance issues that are expensive to correct later.
Applying the wrong withholding tax rate
One of the most common errors is using an outdated or incorrect withholding rate.
Businesses should verify:
- The type of payment
- The payee’s classification
- Applicable BIR regulations
- Current Philippine tax rules
- Using the wrong rate can result in underpayment or overpayment of taxes.
Misclassifying workers
Businesses sometimes treat employees as independent contractors—or vice versa—without considering the applicable tax rules.
Worker classification affects:
- Withholding tax obligations
- Income tax treatment
- Government contributions
- Reporting requirements
Incorrect classification may also increase the likelihood of a BIR audit.
Assuming every payment is subject to withholding
Not every payment requires withholding tax.
For example, certain reimbursements, exempt transactions, or payments covered by valid tax exemptions may not require withholding.
Before deducting tax, businesses should determine whether the payment is actually subject to withholding under current Philippine tax laws.
Missing filing and remittance deadlines
Calculating the correct tax is only part of the process.
Businesses also need to:
- File returns on time.
- Remit taxes within prescribed deadlines.
- Issue the required certificates.
- Maintain supporting documentation.
Late submissions can trigger penalties even when the tax computation itself is correct.
Poor documentation
Incomplete records are a common issue during BIR reviews.
Businesses should maintain organized files containing:
- Contracts
- Supplier invoices
- Payroll records
- Tax computations
- Filed returns
- Payment confirmations
- BIR forms
Good documentation makes audits smoother and helps support the tax treatment applied to each transaction.
What Happens If You Fail To Comply With Withholding Tax Rules?
Withholding tax obligations are backed by legal requirements under Philippine tax laws. Failure to comply can expose businesses to financial penalties and increased scrutiny from the Bureau of Internal Revenue.
Financial penalties
Depending on the nature of the violation, businesses may face:
- Surcharges
- Interest on unpaid taxes
- Administrative penalties
- Additional tax assessments
The total amount can increase significantly if errors remain unresolved over multiple reporting periods.
Audit exposure
Repeated filing mistakes or inconsistent withholding records may increase the likelihood of a BIR audit.
During an audit, businesses may be asked to produce:
- Payroll records
- Contracts
- Payment vouchers
- Tax returns
- BIR forms
- Certificates of tax withheld
- Supporting computation documents
Incomplete records can make it more difficult to support the tax treatment used for payments.
Additional tax liability
If withholding tax should have been deducted but was not, the business may become responsible for the unpaid tax, together with applicable penalties.
This can affect cash flow and create unexpected compliance costs, particularly for businesses handling large volumes of supplier or contractor payments.
How Can Businesses Improve Tax Compliance?
Strong tax compliance is built on consistent processes rather than last-minute corrections. Businesses that review their payroll and payment procedures regularly are better positioned to reduce errors and respond confidently to regulatory changes.
Keep payroll and accounting systems updated
Tax rules change over time, so payroll software and accounting procedures should be reviewed regularly to ensure they reflect the latest BIR requirements.
Regular system updates help reduce manual errors and improve reporting accuracy.
Verify every payment before processing
Before releasing payments, confirm:
- Whether the transaction is subject to withholding
- The applicable withholding rate
- Whether any exemption applies
- The correct supporting documentation
A simple review before payment can prevent costly corrections later.
Train HR, payroll, and finance teams
Tax compliance should not rest with one employee.
Regular training helps HR, payroll, finance, procurement, and accounting teams understand:
- Current tax regulations
- Documentation requirements
- Filing deadlines
- Recordkeeping responsibilities
Cross-functional awareness reduces the risk of compliance gaps.
Monitor updates from the BIR
The Bureau of Internal Revenue regularly issues new regulations, circulars, and tax information materials.
Businesses should periodically review updates through the official BIR website to stay informed about changes affecting:
- Income tax
- Withholding tax
- Reporting requirements
- Electronic filing
- Compliance deadlines
Seek professional guidance when needed
Complex transactions involving multinational companies, non-resident payees, capital gains, excise taxes, or specialized tax rules often require professional advice.
Consulting experienced tax professionals before processing these transactions is usually more cost-effective than resolving compliance issues after an audit.
Need Help Managing Withholding Tax Compliance?
Understanding what is subject to withholding tax is only the first step. Applying the correct withholding rules, maintaining accurate payroll records, preparing BIR forms, and meeting filing deadlines all require careful attention to detail.
Whether you’re an employer managing payroll, a growing business working with multiple suppliers, or an HR team looking to strengthen tax compliance, having reliable processes in place can help reduce errors and avoid unnecessary penalties.
If your organization needs support with payroll administration, HR outsourcing, or back-office operations that impact withholding tax compliance, iScale Solutions can help. Our team works with businesses to streamline payroll and HR processes so they can stay focused on growth while supporting compliance with Philippine tax requirements.
Contact us today to learn how our HR and business support services can help simplify payroll operations and strengthen your overall tax compliance strategy.
Frequently Asked Questions About Withholding Tax in the Philippines
1. What is the withholding tax rate in the Philippines?
There is no single withholding tax rate in the Philippines. The applicable rate depends on the type of income, the nature of the payment, and the recipient. For example, withholding tax on compensation is based on the employee’s taxable income and the current BIR withholding tax tables, while Expanded Withholding Tax (EWT) uses different rates depending on the transaction. Certain passive income, such as interest, royalties, and dividends, may also be subject to Final Withholding Tax under applicable BIR regulations.
2. How do you compute your withholding tax in the Philippines?
The computation depends on the type of withholding tax involved. For employees, employers determine taxable compensation by deducting mandatory government contributions and other non-taxable benefits from gross compensation. The applicable BIR withholding tax table is then used to calculate the amount of income tax to withhold.
For business transactions subject to Expanded Withholding Tax (EWT), the computation is generally:
Withholding Tax = Taxable Payment × Applicable Withholding Tax Rate
Since withholding rates vary by payment type, businesses should always refer to the latest BIR regulations before making payments.
3. Who is required to pay withholding tax in the Philippines?
The obligation to withhold tax generally falls on the payor, not the recipient of the income. Employers are required to withhold tax from employees’ taxable compensation, while businesses, government agencies, and designated withholding agents must withhold tax on certain payments made to suppliers, contractors, professionals, and other payees.
The tax withheld is then remitted to the Bureau of Internal Revenue (BIR) on behalf of the taxpayer.
4. What is 1% and 2% withholding tax?
The 1% and 2% rates refer to specific Expanded Withholding Tax (EWT) rates that may apply to certain business transactions, depending on the type of payment and current BIR regulations.
For example, some purchases of goods or services from suppliers may be subject to a 1% or 2% withholding rate when the transaction falls under applicable BIR rules. These rates have changed over time due to amendments in tax regulations, so businesses should always verify the latest applicable rates before processing payments.
5. Is there a 25% withholding tax in the Philippines?
Yes. A 25% withholding tax may apply to certain payments made to nonresident foreign individuals or foreign corporations, depending on the nature of the income and the applicable provisions of the National Internal Revenue Code or relevant tax treaties.
However, the actual rate may be lower if the recipient qualifies for treaty benefits under an existing tax agreement between the Philippines and another country. Businesses making cross-border payments should review the applicable BIR regulations or seek professional tax advice before applying the withholding rate.
6. Does withholding tax get refunded in the Philippines?
It depends on the type of withholding tax. If more tax is withheld than the taxpayer ultimately owes, the excess may be claimed as a tax credit or, in certain situations, a refund, subject to BIR rules and supporting documentation.
For employees whose taxes have been correctly withheld through payroll, the withholding tax generally satisfies their income tax obligation. For businesses and self-employed individuals, creditable withholding taxes can usually be applied against their annual income tax due. If excess taxes remain after applying available tax credits, the taxpayer may qualify for a refund or carry over the excess to future tax periods, subject to the requirements of the Bureau of Internal Revenue.
