Philippines Withholding Tax
Withholding Tax (WHT)
Withholding Tax (WHT) is a crucial tax-collection mechanism mandated by the National Internal Revenue Code (NIRC) in the Philippines. It essentially requires businesses to retain ("withhold") a portion of payments made to suppliers or service providers and directly remit that amount to the Bureau of Internal Revenue (BIR). This process ensures income taxes are collected at the source, streamlining tax compliance.
When Xendit provides payment services to Philippine businesses classified as Top Withholding Agents (TWAs), the merchant must:
- Withhold the applicable tax from Xendit’s service fees
- Remit the tax to the BIR
- Issue BIR Form 2307 (Certificate of Creditable Tax Withheld at Source) to Xendit as official proof of the withheld tax
Withholding tax for indirect fee deduction
With indirect fee deduction, we’ll consolidate your fees every month, rather than deducting them from individual transactions. You’ll then settle this total amount separately, which facilitates the application of any mandated withholding tax deductions.
You can request a 2% Withholding Tax (WHT) deduction from your total outstanding bill amount by contacting us at help@xendit.ph. Once your request is approved, you can easily enable or disable this feature in your billing settings. To access this option, click on the gear icon on your Billing Statements page.
Once this feature is activated, you only have to pay 98% of your outstanding bills
After a payment of 98% of the bill amount, the bill status will remain Unpaid, while the Withholding Tax column will include a Partially paid status pill.
Once you have uploaded your Withholding Tax Slip and it has been processed by Xendit, the status of the bill will be updated to Paid.
Withholding tax for direct deduction
In this scenario, fees are deducted from your transactions at settlement time. Once you have uploaded your Withholding Tax Slip and it has been processed, the amount will be sent to your available Xendit balance.
How to upload your Withholding Tax slip (BIR 2307)
- Navigate to Settings > Billing Statements
- Find the invoice associated with your WHT and click Upload Withholding Tax Slip
- Upload your Withholding Tax Slip in PDF format (maximum file size: 1MB)
You’ll receive an email notification once your Withholding Tax Slip has been approved. If your submission is rejected, please review the information, make necessary corrections, and re-upload the slip.
We will process your
How to view your withholding tax
For indirect fee deduction:
1. Navigate to Settings > Billing Statements
2. Information on your withholding tax is available in your Billing Statements table
For direct deduction:
1. Go to the Balance History tab on your dashboard
2. Download the data for the required date range to confirm or record fees
3. Create a pivot table to organize data using:
- Line Type
- Amount
Frequently Asked Questions (FAQ)
Q: What is BIR Form 2307?
A: BIR Form 2307, or the Certificate of Creditable Tax Withheld at Source, is an official document issued in the Philippines under the National Internal Revenue Code (NIRC) of 1997, as amended. It serves as proof that a
withholding agent has withheld and remitted the applicable percentage of tax from income payments made to a payee. This form is used to support claims for tax credits against the income tax payable by the payee. It is
part of the Philippines' tax compliance system, enabling the Bureau of Internal Revenue (BIR) to ensure proper collection of taxes at the point of payment.
Q: What is Withholding Tax under BIR regulations?
A: Withholding tax, according to the legal framework in the Philippines under the National Internal Revenue Code (NIRC) of 1997, as amended, is an amount withheld by the payer from income payments made to a
payee. The withheld tax is then remitted directly to the Bureau of Internal Revenue (BIR) by the payer. It is a mechanism employed by the Philippine government to ensure tax compliance and facilitate the collection of
taxes at the source of income.
Q: Why should I submit my BIR Form 2307?
A: Submitting your BIR Form 2307 helps ensure compliance with tax regulations in the Philippines and allows us to accurately process and reconcile your transactions. It serves as official documentation of taxes withheld and remitted to the Bureau of Internal Revenue (BIR) on your behalf.
Q: Who is eligible to make Withholding Tax deductions? Corporate or individuals?
A: Both corporate entities and individuals are eligible to make withholding tax deductions, depending on the nature of the transaction and the applicable tax regulations under the Philippines' National Internal Revenue
Code (NIRC) of 1997, as amended. In particular, Top Withholding Agents (TWAs) — which include large taxpayers, government agencies, and
specially designated corporations and individuals — have an obligation to withhold taxes on certain purchases of goods and services, even if the supplier is not habitually engaged in business. TWAs are identified and
notified by the Bureau of Internal Revenue (BIR) through official issuances and are subject to specific withholding rules, including withholding a percentage of payments at source. For more details, you may refer to relevant BIR Revenue Regulations and Revenue Memorandum Circulars
regarding Top Withholding Agents.
To update your status as TWA in Xendit, please reach out to the Xendit Finance Team through help@xendit.ph
Q: What kind of services require withholding tax?
A: According to Philippine tax regulations, services such as those categorized under professional, technical, or similar services are subject to withholding tax and must be supported by a BIR Form 2307. The specific
applicable rates depend on the nature of the service provided.
Q: When is the right time to upload my withholding tax certificate?
A: You should upload your BIR Form 2307 after making payment for the invoice associated with the withholding tax.
Q: What is the basis of the computation of the withholding tax?
A: The basis of the withholding tax is the amount appearing in the tax invoice or the gross amount, net of rounding discount in the billing statement.
Q: Where should I submit my BIR Form 2307?
A: Starting May 22, 2025, we only accept BIR Form 2307 submissions through the dashboard.
Q: Where can I find the upload button to submit my BIR Form 2307?
A: Login to your dashboard and navigate to Setting → Billing and Fees → Billing Statement Page → Upload your BIR Form 2307 according to the associated invoice ID.
Q: When is the deadline for submitting BIR Form 2307?
A: We encourage customers to submit their BIR Form 2307 promptly after making a payment. The validity for submissions for the current tax period is until February 28 of the following year. After this date, we will no
longer accept forms related to past periods.
Q: What happens if I forget to submit the BIR Form 2307 and the validity date has passed?
A: In line with regulations, we will no longer be able to accept submissions beyond the validity period. Otherwise, you will have to settle the outstanding balance accordingly.
Q: What file formats are accepted for BIR Form 2307?
A: We accept BIR Form 2307 submissions in PDF format.
Q: Is there a limit to the file size I can upload?
A: Yes, each PDF file must not exceed 1MB in size.
Q: How long does it take to process the submitted BIR Form 2307?
A: Processing typically takes 3–5 working days, although it may be faster in some cases.
Q: My submission keeps failing, what should I do?
A: Please verify all information stated in your BIR Form 2307 and try uploading it again.
Q: If all information is correct but the submission still fails, what should I do?
A: Please contact our customer service via email at help@xendit.ph, Live Chat or Viber (reference) for assistance.
Q: Can I still submit BIR Form 2307 through email or Viber?
A: No, starting May 22 2025, we will only process BIR Form 2307 submissions made via the dashboard.
Q: I've previously submitted my BIR Form 2307 through email. Should I re-upload it?
A: If you submitted it before May 22, 2025, you do not need to re-upload. However, for any submissions after May 22, 2025, you are required to upload the form through the dashboard.
Q: Can I submit one BIR Form 2307 for multiple invoices?
A: We encourage customers to create and submit one BIR Form 2307 per invoice ID. Submitting a single form for multiple invoices may lead to submission rejections and delays in processing.
Q: Which value should we use as the basis for the 2% withholding tax?
A: The 2% withholding tax should be computed based on the Tax Base or subtotal amount stated on the
invoice.
Q: What tax code should I use to report the withholding tax?
A: You may refer to the BIR's updated regulations for guidance. Typically, services like intermediary or agency services fall under the appropriate codes stated by the BIR.
Q: What happens if the Tax Base on the BIR Form 2307 differs from the subtotal on the invoice?
A: We advise customers to ensure that the Tax Base matches the amount stated in our invoice. Discrepancies may delay the validation process.
Q: We have made a payment with a 2% withholding tax deduction, but our billing status still shows unpaid.
A: The billing status will update to "Paid" after you upload the corresponding BIR Form 2307 and it has been validated. We will then process the adjustment to your billing balance.
Q: We have made full payment without a withholding deduction, and our billing status is already "Paid." Do we still need to submit the BIR Form 2307?
A: TWAs eligible for withholding tax obligations are still required to file and report the withholding using BIR Form 2307, even if full payment has been made.
Q: What about the BIR Form 2307 we have already reported for the invoice we have paid?
A: TWAs should still upload the BIR Form 2307 to the dashboard. Upon validation, we will process the necessary refund or adjustment to the cash balance.
Q: I haven't made the payment yet, but I have already issued and generated the BIR Form 2307. However, I am unable to upload it to my billing statement page. What should I do?
A: We apologize, but based on internal regulations, we can only accept BIR Form 2307 submissions after the payment has been made for the associated invoice. Please complete the payment first before uploading.
Q: I’ve already completed the bill payment, but I still can’t upload the withholding tax slip. What should I do?
A: The system only allows uploads of withholding tax certificates until February 28 each year. If you’re unable
to upload the document, it’s likely because the deadline has passed. After this date, submissions for the relevant tax year are no longer accepted.
Last Updated on 2025-05-26