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Withholding Tax Violators.Beware!

Quezon City, 09 March 2010 – With the April 15, 2010 income tax payment deadline fast-approaching, the Bureau of Internal Revenue (BIR) is reminding employers to make sure that the correct withholding taxes are deducted from their employees and remitted properly to the BIR. Otherwise, the applicable penalties will be imposed!Section 80 (A) of the Tax Code provides that the employer shall be liable for the withholding and remittance of the correct amount of tax required to be deducted and withheld. Further, under Section 79 (H) of the said code, it is also required that on or before the end of the calendar year but prior to the payment of the compensation for the last payroll period, the employer shall determine the tax due from each employee on taxable compensation income for the entire taxable year.

The difference between the tax due from the employee for the entire year and the sum of taxes withheld from January to November shall either be withheld from his salary in December of the current calendar year or refunded to the employee not later than January 25 of the succeeding year.

Failure to comply with the said provisions of the Tax Code will result into violations for which the applicable penalties shall be imposed by the BIR upon the employer. Penalties shall be in the form of additions to the tax and criminal liabilities.

For failure of any person required to withhold and remit any tax imposed or who willfully fails to withhold and remit such tax, or abets in any manner to evade the payment of any such tax, shall be liable upon conviction to a penalty equal to the amount of the tax not withheld and remitted, in addition to other penalties.

Likewise, for failure or refusal of any employer/withholding agent to refund excess withholding tax shall, in addition to other penalties, be liable to a penalty equal to the amount of refund which was not refunded to the employee resulting from any excess of the amount withheld over the tax actually due on their return.

Criminal liabilities shall be punished by a fine of from P1,000.00 to P100,000.00 and imprisonment of from one (1) year to ten (10) years, in addition to other penalties, depending on the violation/s upon which the criminal conviction was made. In certain instances, however, a compromise penalty in lieu of criminal liability may be imposed and collected. (reytdlc)


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