TAX COMPLIANCE

By Mr. Mohamad kalid M. Hamed

How job order personnel classified, employee or
contractor?
Under BIR ruling, it was ruled that the performance of
services by job-order personnel , who, is a non-
professional , hired pursuant to EO No. 782 is not under
employer-employee relationship in reference to DOLE-
DBM Joint circular no. 1-092 and CSC Memorandum
Circular no. 38 series of 1993. Services of Job-order
personnel are construed as a sale of service under Section
108 of the 1997 Tax Code, as amended, imposing value
added tax (VAT) on sale of services. Tax compliance of job
order personnelwould then follow this classification
construed as seller of service and not as employee.
Job order or Contract
BIR FORM
2306
This certificate is
accomplished
and issued by
the withholding
agent, usually
the employer, to
reflect the
income subject to
final tax.
BIR FORM
2307
This certificate
shows the
income
subjected to
expanded
withholding tax
paid by the
withholding
agent.
Suppliers
Look for the Official Receipt and identify if purchase of Goods or purchase of
Services.

Goods- Gas, oil, lubricant, office supplies, repair supplies, medicine, kitchen wares,
electronic, mechanical, industrial, laboratory, scientific and other goods.

Services- Mailing Services, Catering-snacks, payment of electricity, water, cable

subscription, internet, telephone, repair services, janitorial, security, Hotel
accommodation and other services.

Also, look if its VAT or NON-VAT and if SOLE-PROPIETORSHIP or CORPORATION.

Vat Registered - Tax rate is 5%, EVAT rates are 1% (Payment of Goods) and 2%
(Payment of Services)

Non-VAT Registered - Tax rate is 3% (Subject to Percentage Tax). EVAT rates are 1%
(Payment of Goods) and 2% (Payment of Services)
 On BIR Form 2306:

Payment for Materials - VAT Registered Business

Code: WV010

Payment for Services - VAT Registered Business

Code: WV020

Payment for Materials or Services - NON- VAT Registered Business

Code: WB080
 On BIR Form 2307:

if Single Proprietorship the code to be used are:

WI157 - if Tax withheld came from Payment of Services.
WI640 - if Tax withheld came from Payment of Goods.

if Corporate the code to be used are:

WC157 - if Tax withheld came from Payment of Services.
WC640 - if Tax withheld came from Payment of Goods.
Note:

For Vat Registered, (4) four copies each for

form 2306 and form 2307.
Note:

For Non-Vat Registered, (4) four copies of

form 2307
The term
Non-Resident
alien means
an individual
whose
residence is
not within the
Philippines
and who is
not a citizen
thereof.
THE END. THANK YOU!