
Bureau of Internal Revenue (BIR) issued Revenue Regulations No. 12-2013 dated July 12, 2013 (RR No. 12-2013) amending Section 2.85.5 of Revenue Regulations No. 2-98 (RR No.2-98), as amended, relative to the requirements for deductibility of certain income payments.
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...