One of the most important forms that employees doing freelance jobs on the side, employers who accept project-based or freelance employees and freelancers must know about is the BIR Form 2307. It is something you must file together with your Quarterly/Annual Income Tax Return – BIR Forms 1701Q / 1701 for individuals, or BIR Form 1702Q/ 1702 for non-individuals – for income tax liability. Read on to learn more about it.
Want to learn more about other BIR forms? Check out our Ultimate Guide to BIR Forms post.
BIR Form 2307
What is BIR Form 2307?
The BIR Form 2037 is also called the Certificate of Creditable Tax Withheld At Source.
This certificate shows the income subjected to expanded withholding tax paid by the withholding agent.
BIR Form 2307 in the books of accounts of the taxpayer is accounted for as an asset. They are considered as income tax prepayments – being deductible from income tax due of the taxpayer during a quarterly or annual income tax return.
They function as income tax credits or what you can consider advance income tax of the payee.
This is what the BIR Form 2307 looks like:
Issuance of BIR Form 2307 is an obligation of the payor and/or employer – withholding tax agent to the payee.
It should be submitted together with the Quarterly/Annual Income Tax Return – BIR Forms 1701Q / 1701 for individuals, or BIR Form 1702Q/ 1702 for non-individuals – so that the amount of withholding tax shall be allowed as a tax credit against the income tax liability of the income recipient in the taxable quarter or year in which the income was earned or received.
When Is the BIR Form 2307 Issued?
The certificate is attached to the following with different deadlines:
• For EWT: to be filed on or before the 20th day of the month following the taxable quarter, the form must be attached to 1701 or 1702 forms, in which case the amount is allowed to become tax credit against taxable income.
• For percentage taxes on government money payments: certificate must be attached to 2551 forms and must be issued on or before the 10th day of the following month.
• For VAT Withholding: certificate must be issued on or before the tenth day of the month following the month when withholding was made. To be attached to 2550 forms.