The Bureau of Internal Revenue (BIR) has issued Revenue Regulation (RR) 5-2025 on Feb. 27, 2025, which amends RR 2-98 by revising the withholding tax rates and adjusting the basis of certain income payments subject to creditable withholding tax to align with Republic Act 12066, or the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (Create More) Act.
Under the new regulation, the withholding tax rate on certain income payments made by credit card companies has been reduced from one percent to 0.5 percent on the gross amount paid by the credit card company.
Similarly, remittances of electronic marketplace operators and digital financial services providers to merchants is subject to a 0.5 percent withholding tax on its gross remittances to the sellers.
Please be guided accordingly.
Source:
P&A Grant Thornton
Certified Public Accountants