Philippines Withholding Tax

The information on this page is only applicable for businesses in Philippines.

Withholding Tax (WHT) is a crucial tax-collection mechanism mandated by the National Internal Revenue Code (NIRC) in the Philippines. It essentially requires businesses to retain ("withhold") a portion of payments made to suppliers or service providers and directly remit that amount to the Bureau of Internal Revenue (BIR). This process ensures income taxes are collected at the source, streamlining tax compliance.

When Xendit provides payment services to Philippine businesses classified as Top Withholding Agents (TWAs), the merchant must:

• Withhold the applicable tax from Xendit’s service fees

• Remit the tax to the BIR

• Issue BIR Form 2307 (Certificate of Creditable Tax Withheld at Source) to Xendit as official proof of the withheld tax

Withholding tax for indirect fee deduction

With indirect fee deduction, we’ll consolidate your fees every month, rather than deducting them from individual transactions. You’ll then settle this total amount separately, which facilitates the application of any mandated withholding tax deductions.

You can request a 2% Withholding Tax (WHT) deduction from your total outstanding bill amount by contacting us at help@xendit.ph Once your request is approved, you can easily enable or disable this feature in your billing settings. To access this option, click on the gear icon on your Billing Statements page.

• Once this feature is activated, you only have to pay 98% of your outstanding bills

• After a payment of 98% of the bill amount, the bill status will remain Unpaid, while the Withholding Tax column will include a Partially paid status pill.

• Once you have uploaded your Withholding Tax Slip and it has been processed by Xendit, the status of the bill will be updated to Paid.

Withholding tax for direct deduction

In this scenario, fees are deducted from your transactions at settlement time. Once you have uploaded your Withholding Tax Slip and it has been processed, the amount will be sent to your available Xendit balance.

How to upload your Withholding Tax slip (BIR 2307)

1. Navigate to Settings > Billing Statements

2. Find the invoice associated with your WHT and click Upload Withholding Tax Slip

3. Upload your Withholding Tax Slip in PDF format (maximum file size: 1MB)

You’ll receive an email notification once your Withholding Tax Slip has been approved. If your submission is rejected, please review the information, make necessary corrections, and re-upload the slip.

How to view your withholding tax amount

1. Navigate to Settings > Billing Statements

2. Information on your withholding tax is available in the notes of your Billing Statements table