Tax Withheld for Employees BIR Form 2316

BIR Form 2316Doing business in the Philippines and hiring Filipino talent requires compliance with the revenue regulations of the Bureau of Internal Revenue (BIR). This applies to all companies, whether local or foreign owned BPOs, or engaged in any other kind of business and have already registered with the BIR.

Revenue Regulations No. 11-2013

Other than submitting documents to the government, companies in the Philippines are required to provide its employees a hard copy of BIR Form 2316 or the Certificate of Compensation Payment/Tax Withheld. Employers should:

1) Provide its employees with BIR Form 2316 on or before January 31 and
2) Provide the terminated employee with the form on the day of giving the last payment of compensation.

Minimum wage earners (MWEs) are not exempted from this rule. Employers of MWEs should issue BIR Form 2316 (June 2008 Encs version) to their employees on or before January 31 as well.

Several rules should be followed when employers issue the Certificate of Compensation Payment or Tax Withheld form to its employees. Employers should provide the original and duplicate copies of BIR Form No. 2316 with the following information:

1) Name and address of the employer;
2) Employee’s Tax Identification Number (TIN);
3) The amount of exemptions claimed, amount of premium payments on health and/or hospitalization insurance not exceeding P2,400;
4) The sum of compensation paid including nontaxable benefits;
5) The amount of statutory minimum wage receieved by MWEs;
6) Overtime, holiday, night shift differential, and hazard pay received by MWEs;
7) The amount of tax due;
8) The amount of tax withheld during the calendar year; and
9) Other information in the form that needs to be filled out.

For cases covered by substituted filing, employers should provide the employees with the original copy of BIR Form No. 2316 and file the duplicate copy with the BIR not later than February 28 following the close of the calendar year.

Penalties

If an employer or a withholding agent fails to comply with this revenue regulation within the required time, there will be a corresponding fee of P1,000 for each penalty committed. The aggregate amount for all penalties should not exceed P25,000. The fee will be waived unless the failure is due to reasonable cause and not willful neglect.

Furthermore the employer or withholding agent will be punished with a fine of P10,000 and at least one year imprisonment if it fails to pay any tax, make any return, keep any record, or supply correct and accurate information, withhold taxes, or refund excess taxes for two consecutive years.

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