Under RR No. 12-2013, no deduction shall be allowed on income payments if it is shown that the applicable withholding taxes required by the rules had not been withheld. No deduction will also be allowed even if during tax assessment on deficiency withholding taxes for alleged failure to withhold, the taxpayer paid the withholding taxes.
In effect RR No. 12-2013 makes it mandatory for taxpayers to withhold on expenses required to be withheld for purposes of expense deduction for income tax purposes in the Philippines. For easy reference, please refer below to the copy of Revenue Regulations No. 12-2013 from the BIR website.
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