BIR Form No. 1603 - Quarterly Remittance Return of Final Income Taxes Withheld

( On Fringe Benefits Paid to Employees Other than Rank and File )       
Guidelines and Instructions
Who Shall File

          This return shall be filed in triplicate by every withholding agent (WA)/payor who is either an individual or non-individual, required to deduct and withhold taxes on fringe benefits furnished or granted to employees other than rank and file employees subject to Final Withholding Taxes

          If the Government of the Philippines, its political subdivisions or any Agency or Instrumentality, as well as government-owned or controlled corporation is withholding agent/payor, the return may be made by the officer or employee having control of disbursement of income payment or other officer or employee appropriately designated for the purpose.

         If the person required to withhold and pay the tax is a corporation, the return shall be made in the name of the corporation and shall be signed and verified by the president, vice-president, or any authorized officer and countersigned by the treasurer or assistant treasurer.

         With respect to a fiduciary, the returns shall be made in the name of the individual, estate or trust for which such fiduciary acts and shall be signed and verified by such fiduciary. In case of two or more joint fiduciaries, the return shall be signed and verified by one of such fiduciaries.
 
When and Where to Remit
         The return shall be filed and the tax paid on or before the twenty-fifth(25th) day of the month following the quarter in which the fringe benefits were granted to the recipients.

         The return shall be filed and the tax paid with the Authorized Agent Bank (AAB) of the Revenue District Office having jurisdiction over the withholding agent's place of business/office. In places where there are no Authorized Agent Banks, the return shall be filed and the tax paid with the Revenue Collection Officer or the duly Authorized City or Municipal Treasurer of the Revenue District Office having jurisdiction over the withholding agent's place of business/office, who will issue a Revenue Official Receipt (BIR Form No. 2524) therefor.
         Where the return is filed with an AAB, the lower portion of the return must be properly machine-validated and duly stamped by the Authorized Agent Bank to serve as the receipt of payment. The machine validation shall reflect the date of payment, amount paid and transaction code, and the stamped mark shall show the name of the bank, branch code, teller's code and teller's initial. The AAB shall also issue an official receipt or bank debit advice or credit document, whichever is applicable, as additional proof of payment.

         A taxpayer may file a separate return for the head office and for each branch or place of business/office or a consolidated return for the head office and all the branches/offices except in the case of large taxpayers where only one consolidated return is required.

 
Fringe Benefit Defined
         Fringe benefit means any good, service or other benefit furnished or granted by an employer in cash or in kind, in addition to basic salaries to employees (except rank and file employees) such as, but not limited to the following:
1.  Housing;
2.  Expense account;
3.  Vehicle of any kind;
4.  Household personnel, such as maid, driver and others;
5.  Interest on loan at less than market rate to the extent of the difference between the market rate and actula rate granted;
6.  Membership fees, dues and other expenses borne by the employer for the employee in social and athletic clubs or other similar organizations;
7.  Expenses for foreign travel;
8.  Holiday and vacation expenses;
9.  Educational assistance to the employee or his dependents; and
10.  Life or health insurance and other non-life insurance premiums or similar amounts in excess of what the law allows.
 
ATC And Tax Rate
         The fringe benefit tax shall be imposed at the following rates:
ATC
TAX RATE      
WI 360 In general
                    Effective January 1, 1999
33%
                    Effective January 1, 2000
32%
WI 330 For non-resident alien individual who is not engaged in trade or business in the Philippines
25%
WI 320 For Alien and Filipino employed and occupying the same position as those of aliens employed by the following
multinational companies:
1.) regional or area headquarters of a multinational company or regional operating headquarters of a multinational company
15%
2.) an offshore banking unit of a foreign bank established in the Philippines
15%
3.) a foreign service contractor or a foreign service subcontractor engaged in petroleum operations in the Philippines
15%
Computation of Tax
         The final withholding tax on fringe benefit shall be computed based on the taxable grossed-up monetary value* multiplied by the applicable tax rate.
*   The grossed-up monetary value of the fringe benefit shall be determined by dividing the monetary value of the fringe benefit as provided for in      Revenue Regulations No 3-98 by the percentage divisor in accordance with the following schedule:
For citizen, resident alien, and non-resident alien engaged in trade or business in the Philippines:
                    Effective January 1, 1999
67%
                    Effective January 1, 2000
68%
For non-resident alien individual who is not engaged in trade or business in the Philippines
75%
For Alien and Filipino employed and occupying the same position as those of aliens employed by the following
multinational companies:
1.) regional or area headquarters of a multinational company or regional operating headquarters of a multinational company
85%
2.) an offshore banking unit of a foreign bank established in the Philippines
85%
3.) a foreign service contractor or a foreign service subcontractor engaged in petroleum operations in the Philippines
85%
Penalties
There shall be imposed and collected as part of the tax:
1. A surcharge of twenty five percent (25%) for each of the following violations:
a. Failure to file any return and pay the amount of tax or installment due on or before the due date;
b. Unless otherwise authorized by the Commissioner, filing a return with a person or office other than those with whom it is
required to be filed;
c. Failure to pay the full or part of the amount of tax shown on the return, or the full amount of tax due for which no return is
required to be filed on or before the due date;
d. Failure to pay the deficiency tax within the time prescribed for its payment in the notice of assessment.
2. A surcharge of fifty percent (50%) of the tax or of the deficiency tax, in case any payment has been made on the basis of such return before the
discovery of the falsity or fraud, for each of the following violations:
a. Willful neglect to file the return within the period prescribed by the Code or by rules and regulations; or
b. In case a false or fraudulent return is willfully made.
3. Interest at the rate of twenty percent (20%) per annum, or such higher rate as may be prescribed by rules and regulations, on any unpaid amount of
tax, from the date prescribed for the payment until the amount is fully paid.
4. Compromise penalty.
Note: All background information must be properly filled up.
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Box Nos. 1 and 2 refer to transaction period and not the date of filing this return.
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The last 3 digits of the 12-digit TIN refers to the branch code.
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TIN = Taxpayer Indentification Number