A Creditable Withholding Tax Certificate (BIR Form No. 2307) is a certificate to be accomplished and issued to recipients of income subject to expanded withholding tax paid by a withholding agent showing therein the monthly breakdown of the total income payments made and the total taxes withheld and remitted during the quarter or period. The withholding agent is the one obliged to issue a Creditable Withholding Tax Certificate to the payee. The creditable withholding tax certificate is attached to the quarterly/annual income tax return to allow the amount of withholding tax as tax credit against the income tax liability of the income recipient. This will serve as a proof of withholding.
In cases that an employee failed to attach the creditable withholding tax certificate to its quarterly/ annual income tax return, the amount of withholding taxes will not be allowed as tax credit against the income tax liability. Creditable withholding tax certificate is accounted for in the books of accounts of the taxpayer as an asset. These represent advance or prepayments of the income tax due of the taxpayer. Thus, at the end of the taxable year, the total amount of withholding taxes paid may be credited against the total income tax due.
The Certificate of Creditable Tax Withheld is issued to payee at the following dates:
- For EWT- on or before the 20th day of the month following the close of the taxable quarter or upon request of the payee
- For percentage tax on government payments- on or before the 10th day of the month following the month in which withholding was made or upon request of the payee
- For VAT Withholding- on or before the 10th day of the month following the month in which withholding was made or upon request of the payee.
Below is the sample of BIR Form No. 2307 or Certificate of Creditable Tax Withheld: