BIR Form 1604-E Annual Information Return EWT

Overview

BIR Form 1604-E is the Annual Information Return of Creditable Income Taxes Withheld (Expanded Withholding Tax). It is a mandatory filing requirement under the National Internal Revenue Code (NIRC §53) and BIR regulations. Withholding agents—corporations, partnerships, and individuals engaged in business—must file this form to report all expanded withholding taxes (EWT) they have deducted and remitted to the Bureau of Internal Revenue during the calendar year.

Legal Basis

The requirement to file Form 1604-E is established under NIRC §53 (Withholding of Tax at Source) and NIRC §57 (Creditable Withholding Taxes). The BIR has issued detailed guidelines through Revenue Regulations (RR 2-98, as amended) and various BIR Circulars, most recently updated under the TRAIN Law (RA 10963) and subsequent amendments. The form applies to all types of expanded withholding tax transactions, including payments for services, rentals, commissions, and other income subject to EWT.

Who Must File

Any person or entity that has withheld expanded withholding tax during the calendar year must file Form 1604-E. This includes:

• Corporations and partnerships making payments to suppliers, contractors, and service providers
• Government agencies and instrumentalities
• Individuals engaged in business who are required to withhold EWT
• Financial institutions, insurance companies, and other regulated entities

Withholding agents are required to file even if no tax was withheld during the year, provided they are otherwise subject to the withholding requirement.

Filing Deadline and Frequency

Form 1604-E must be filed annually on or before April 30 of the following year (BIR Memorandum Circular 2-2018, as amended). For example, withholding agents file their 2024 Form 1604-E by April 30, 2025. The form covers the entire calendar year (January 1 to December 31). Late filing incurs penalties under NIRC §288 (Penalties for Violation of Rules and Regulations).

Contents and Information Required

Form 1604-E requires the withholding agent to report:

• Withholding agent's name, address, TIN, and business classification
• Detailed list of payees (suppliers, professionals, contractors) from whom tax was withheld
• Payee's name, address, TIN, and nature of income
• Gross amount of payment made to each payee
• Type of income (e.g., services, rentals, commissions, interest, dividends)
• Applicable EWT rate and amount of tax withheld
• Monthly breakdown of withholdings (if required)
• Total EWT withheld and remitted for the year

The form must be accompanied by a detailed schedule (Annex A) listing all payees and corresponding withholdings. Withholding agents must ensure accuracy and completeness, as discrepancies may trigger BIR audits.

Expanded Withholding Tax Rates

EWT rates vary by type of income and payee classification under RR 2-98 and subsequent amendments. Common rates include:

• Services (professional fees, technical services): 1% to 5% depending on payee type
• Rentals (real property, equipment): 5% to 10%
• Commissions and brokerage fees: 10%
• Interest income: 20% (as per TRAIN Law RA 10963)
• Royalties and similar payments: 10%
• Prizes and winnings: 20%

Rates may differ for resident foreign corporations and non-resident aliens. Withholding agents must apply the correct rate based on the payee's classification and the nature of income.

Filing Methods

As of 2024, the BIR accepts Form 1604-E filings through:

• Electronic filing via the BIR's online system (eBIRForms) for registered users
• Manual filing at the appropriate BIR Revenue District Office (RDO) with original and copies
• Authorized tax practitioners and representatives may file on behalf of withholding agents

Electronic filing is strongly encouraged to reduce processing time and minimize errors. Withholding agents must retain supporting documents (invoices, payment receipts, withholding certificates) for at least three years for audit purposes.

Reconciliation with Monthly Returns

Withholding agents who file monthly EWT returns (Form 2307 or equivalent) must ensure that the annual Form 1604-E reconciles with the sum of monthly filings. Any discrepancies must be explained and corrected. The BIR cross-references monthly and annual returns to detect underreporting or non-compliance.

Penalties for Non-Compliance

Failure to file Form 1604-E or filing late incurs penalties under NIRC §288:

• Failure to file: ₱1,000 to ₱10,000 per violation
• Late filing: 25% surcharge plus 12% annual interest on unpaid taxes (NIRC §249)
• Underreporting or misstatement: 75% fraud penalty if willful; 25% negligence penalty if unintentional

Repeated violations may result in suspension of withholding agent status or referral for criminal prosecution under NIRC §269 (Attempt to Evade or Defeat Tax).

Withholding Certificates (Form 2307)

Withholding agents must issue Form 2307 (Certificate of Creditable Tax Withheld at Source) to each payee within 30 days after the end of the calendar year (by January 30). The payee uses Form 2307 to claim the withheld tax as a credit against their own income tax liability. The withholding agent must file a copy of all Form 2307 certificates with the annual Form 1604-E or separately, depending on BIR instructions.

Recent Updates and TRAIN Law Impact

The TRAIN Law (RA 10963, effective January 1, 2018) modified EWT rates for certain income types, particularly interest income (increased to 20% for residents). The BIR has issued multiple circulars clarifying the application of EWT under the new regime. Withholding agents must stay current with BIR issuances to ensure compliance. As of 2024, the BIR continues to refine EWT rules through administrative issuances and case rulings.