Consolidated Withholding Tax (CWT) and Fringe Benefits Tax (FBT) Regulations Handbook provide the taxpayer, potential investor, accountants or practitioners an easy reference in determining the various withholding tax and FBT requirements that have to be complied with by taxpayers.
The withholding of taxes is a very important tool of tax administration; thus, it is one of the most extensively utilized and effective revenue collection schemes of the government. On the part of the taxpayers, failure to comply with withholding tax requirements could have adverse consequences (i.e., payment of surcharge, interest, compromise penalties and imprisonment in fraudulent cases). It could also mean disallowance of legitimate deductions from gross income, which can translate to potential assessment for deficiency income tax. Failure to observe FBT requirements is subject to essentially the same sanctions. Thus, timely and dutiful observance of relevant withholding tax and FBT obligations is a must to taxpayers.
This handbook consists of two parts, namely: (a) The Consolidated Withholding Tax (CWT) Regulations and (b) The Consolidated Fringe Benefits Tax (FBT) Regulations. The first part is a consolidation of Revenue Regulations (RR) No. 2-98 (the original CWT Regulations in May 1998 to implement the relevant provisions of the National Internal Revenue Code of 1997) and the amendatory regulations issued in 1998 through 2006, while the second part is an integration of RR No. 3-98 (Special Treatment of Fringe Benefits) and the related amendatory regulations issued in 1998 through 2002.
For easy reference, appended are Annexes A to H concerning vital information such as business industry classification for e-fling purposes and sample formats of various relevant Bureau of Internal Revenue (BIR) notice of cancellation and certifications.