Withholding tax on bills and expenses, and Form 2307 certificates
Set vendor tax profiles, apply withholding tax on bills and expenses, issue 2307 certificates and use the withholding reports.
GodoERP can apply withholding tax to a bill or expense, record it, and prepare the related reports and certificates. Whether a payment is subject to withholding, and at what rate, is for you and your accountant to decide. GodoERP is not the BIR or a tax adviser.
1. Set each vendor's tax profile
Purchasing › Vendors › edit the vendor › BIR Tax Profile:
- Payee Type: Individual or Non-Individual
- VAT Status
- Subject to EWT: tick it only for vendors whose payments your accountant says are subject to withholding
- Default Nature of Payment: GodoERP then fills in the ATC and rate from its built-in table
- For professional fees: Declared Annual Gross Income and whether a sworn declaration is on file
Vendors left unticked compute ₱0 withholding.
2. Apply it on bills and expenses
- Bills: the ATC Code and Withholding Tax Rate (%) fill in from the vendor's profile, and you can change them per bill. 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. Tick the gross-up option if your company shoulders the tax.
3. Issue Form 2307 certificates
Reports › BIR Form 2307 Certificates. Choose the year and quarter. There is one certificate per payee, covering the withholding lines paid to them in that quarter. Check the TIN, address and amounts, enter your 2307 number and click Issue.
4. Reports and remittance records
Reports › EWT has the monthly, quarterly and annual worksheets, the payee list and EWT Remittance Tracking, where you record what you paid. See Track EWT remittances, 1604-E, QAP and Form 1606.
Tax withheld from you by customers
When a customer withholds tax from your invoice, enter it in the invoice's Withholding Tax (₱) field. Reports › Withholding Tax lists these as Creditable Withholding Tax, so you can track the certificates to collect.
Note: Check every row against the actual certificates, and confirm ATCs, rates and filing details with your accountant or the BIR.