Expanded withholding tax (EWT) and BIR Form 2307
Set vendor tax profiles, withhold on bills and expenses, issue 2307s, and prepare 0619-E, 1601-EQ and 1604-E.
If you're a withholding agent, you withhold part of certain payments (rent, professional fees, contractors) and pay it to the BIR. GodoERP computes it, records it and prepares your forms.
1. Set each vendor's BIR tax profile
Purchasing › Vendors › edit the vendor › BIR Tax Profile:
- Payee Type: Individual or Non-Individual (corporation or partnership)
- VAT Status
- Subject to EWT: tick it only for vendors whose payments are subject to EWT
- Default Nature of Payment: GodoERP then looks up the ATC and rate automatically
- For professional fees: Declared Annual Gross Income and whether a sworn declaration is on file (this affects the rate)
Ordinary suppliers stay unticked and their bills compute ₱0 EWT.
2. Withhold on bills and expenses
- Bills: the ATC Code and Withholding Tax Rate (%) fill in from the vendor's profile, and you can override them per bill. The rate applies to the VAT-excluded amount. The bill shows Less: Withholding Tax and the Net Payable to Vendor.
- Direct Expenses: tick Subject to Expanded Withholding Tax (EWT) and choose the EWT Rule / Nature. A vendor TIN is required. If you shoulder the tax (gross-up), tick that option. Example: rent of ₱8,500 at 5% gives EWT of ₱447.37 and an expense of ₱8,947.37.
3. Issue BIR Form 2307 to payees
Reports › BIR Form 2307 Certificates. Choose the year and quarter. There's one certificate per payee, covering every EWT line paid to them that quarter. Check the TIN, address and amounts, enter your 2307 number and click Issue.
4. Remit and file
- 0619-E Monthly EWT: first two months of each quarter.
- 1601-EQ Quarterly EWT: the quarter's EWT less what you paid with the 0619-E.
- 1604-E / Annual EWT and QAP Preparation: annual reconciliation and the alphalist of payees.
- EWT Remittance Tracking: record what you paid.
Taxes withheld from you by customers
When a customer withholds tax from your invoice, enter it in the invoice's Withholding Tax (₱). Reports › Withholding Tax lists these as Creditable Withholding Tax, the 2307s to collect, which you claim on your 1701Q or 1701.
Important: Confirm every row against the actual 2307s received or issued, and the ATCs and rates with your CPA.