WITHHOLDING TAX ON

FAQ s COMMISSIONS
1. How is the withholding tax on commission calculated?

Withholding tax is computed as follows:

Gross commission P46,181.89
A/R transfer balance (2,938.88)
Maintenance fee (512.00)
Tax base 42,731.01
WHT rate 10%
WHT for the period 4,273.10
Commission payout P38,457.91

2. What are the deductions netted to my commission payout?

i. Maintenance fee
The fee is used to cover accounting, processing, and account
maintenance costs.
Base Gross Commission Range Maintenance Fee
Above P51,200 P256.00
Less than P51,200 but more than P25,600 P204.80
Less than P25,600 but more than P5,120 P153.60
Less than P5,120 but more than P2,560 P102.40
Less than P2,560 P51.20

FREQUENTLY ASKED QUESTIONs

 WITHHOLDING TAX ON
FAQ s COMMISSIONS
ii. Transfer A/R Balance (A/R Balance Owing)
These are commission retractions made to correct the commission/s
previously earned. Generally, these retractions resulted from returned
orders (either from downlines or own account) from previous months.

To know more about the specific details of the Transfer A/R Balance, you
may email Resolutions Team ([email protected]) to request
for the breakdown.

iii. Withholding tax

This is the amount of your commission withheld by YLPH and remitted
directly to the BIR.

3. What are the applicable withholding tax (WHT) rates to be

applied to the commissions paid to YLPH members?

Generally, withholding tax on commissions are 10% and 15% for

individual and non-individual payees, respectively. However, if a payee
submit a notarized sworn declaration the applicable lower withholding
tax rates will be applied.

4. Who are individual payees and non-individual payees?

Individual payees include the following: sole proprietors who are

engaged in trade or business; professionals who are self-employed
individuals in the practice of profession (no employee-employer
relationship); employees who derive income from an employer in the
Philippines; and mixed-income earners who are any two of the above.

Non-individual payees include the following: corporations; partnerships;

and estates and trusts.

FREQUENTLY ASKED QUESTIONs

 WITHHOLDING TAX ON
FAQ s COMMISSIONS
5. Am I eligible for a lower rate of withholding tax on my
commissions?

Prior to the initial commission payment, you need to execute a notarized

sworn declaration as follows:

• Annex B-1 (For Self-Employed and/or Engaged in the Practice of

Profession with Several Income Payors)

Who may use this form?

Those Members who receive income from several income payors
(other than income payments from YLPH).

What are the applicable WHT rates?

If... WHT
…the Member submits a sworn
declaration and gross receipts does not 5%
exceed P3M.
…the Member submits a sworn
declaration but gross sales/receipts 10%
exceeding P3M.
…the Member does not submit a sworn
10% - default
declaration.

FREQUENTLY ASKED QUESTIONs

 WITHHOLDING TAX ON
FAQ s COMMISSIONS
• Annex B-2 (For Self-Employed and/or Engaged in the Practice of
Profession with Lone Income Payor)

Who may use this form?

Those Members who receive income solely from YLPH.

What are the applicable WHT rates?

If... WHT
…the Member submits a sworn
declaration and gross income from YLPH -
will not exceed P250,000.
…the Member submits a sworn
declaration and gross income from YLPH 5%
is more than P250,000 but not exceeding (only on the excess of P250,000)
P3M.
…the Member does not submit a sworn
10% - default
declaration.

FREQUENTLY ASKED QUESTIONs

 WITHHOLDING TAX ON
FAQ s COMMISSIONS
• Annex B-3 (For Non-Individual Taxpayer with Several Income Payors)

Who may use this form?

Those Members that are SEC-registered corporations.

What are the applicable WHT rates?

If... WHT
…the Member submits a sworn
declaration and gross receipts does not 10%
exceed P720K.
…the Member does not submit a sworn
15% - default
declaration.

6. When is the deadline of the submission of the sworn declaration?

Prior to the initial commission payment, you need to execute a notarized

sworn declaration on or before the 20th of the month.

For example, if you expect to earn commission in the month of January

2021 (to be paid on or before February 18, 2021), deadline of submission
of notarized sworn declaration to YLPH is on or before January 20, 2021.

7. When I submit my sworn declaration, what is the income tax

regime should I choose between the two (2) income tax rates,
graduated or 8%, options?

There is no exact answer to this question since benefits will depend on

taxpayer’s circumstances.

We suggest that you ask your accountant to weigh in the pros and cons of
the two income tax regimes.

FREQUENTLY ASKED QUESTIONs

 WITHHOLDING TAX ON
FAQ s COMMISSIONS
8. I received a BIR Form 2307 (Certificate of Creditable Tax Withheld
At Source). What is the purpose of this BIR Form?

BIR Form 2307 is the proof that we withheld the required amount,
as mandated by the BIR, from the commissions you received. As a
withholding agent, it is our obligation to issue to you the BIR Form
No. 2307 equivalent to the withholding tax deducted from your
commissions.
Source: https://www.bir.gov.ph/index.php/tax-information/withholding-tax.html

9. What will I do with the BIR Form No. 2307s I received from Young
Living Philippines? Do I need to submit this to the BIR?

You may use the amount withheld as indicated in the form as a

deduction (‘tax credits’) from the income tax due when you file your
quarterly income tax return and/or annual income tax return.

Please take note that aside from the amount we withheld, you have a
responsibility as a taxpayer to file your individual tax returns; and your
income tax due will still depend on your income bracket.

10. I will need the original copy of the BIR Form No. 2307. Are you
going to send it via mail?

The BIR Form No. 2307 we issued to you are electronically signed. The
copy of the BIR Form No. 2307 e-mailed to you should be sufficient
proof of the amount of tax withheld from your commissions.

However, if you want the original copy of your BIR Form No. 2307, you
can either pick it up in our registered office address in BGC, Taguig City
or shoulder the cost of delivery.

FREQUENTLY ASKED QUESTIONs

 ANNEX “B-1”

INCOME PAYEE’S SWORN DECLARATION OF GROSS RECEIPTS/SALES

(For Self-Employed and/or Engaged in the Practice of Profession with Several Income Payors)

I, _________________________________________________, ___________________________, of legal age, single/ married to

(Name) (Citizenship)
_____________________________________________________ permanently residing at _________________________________
(Name of Spouse)
____________________________________________________________________________________________________________ with
(Address)
Taxpayer Identification Number (TIN) __________________________________, after having been duly sworn in accordance with law

hereby depose and state:

1. That I derived my _______________________ income from various income payors, and my registered business address is at
(business/professional)
________________________________________________________________________________________;
(Business Address)

2. That for the current year ________, my gross receipts will not exceed Three Million Pesos (₱3,000,000) and that I am a non-
VAT registered taxpayer. For this purpose, I opt to avail of either one of the income tax regime as follows:

r Graduated Income Tax Rates under Section 24(A)(2)(a) of the Tax Code, as amended, based on the taxable
income. With this selection, I acknowledge that I am subject to creditable withholding tax at the prescribed
rate; subject to percentage tax and will file the required percentage tax returns or subject to withholding
percentage tax, in case of government money payments.

r Eight Percent (8%) income tax rate under Section 24(A)(2)(b) of the Tax Code, as amended, based on gross
receipts/sales and other non-operating income - with this selection, I understand that this is in lieu of the
graduated income tax rates and the Percentage Tax under Section 116 of the Tax Code, as amended; thus,
only the creditable income withholding tax based on the prescribed rate shall be made;

3. That based on my selection above, if my gross sales/receipts and other non-operating income exceeds ₱3,000,000, my income
payor /withholding agents shall automatically withhold the higher rate of withholding of ten percent (10%) in the case of
income items with two (2) prescribed creditable withholding tax rate depending on the total amount of income payment
received:

a. In case of Graduated Income Tax Rates, I acknowledge that aside from income tax, I am subject to business
tax (VAT) unless expressly exempted; and consequently subject to withholding of income. Moreover, if the
payor is a government entity, business tax withholding applies; OR

b. In case of Eight Percent (8%) income tax rate, I acknowledge that I am no longer qualified to avail of this
option since my income exceeds ₱3,000,000 and thus, the graduated income tax rates above shall
automatically apply together with the consequent liability for business tax/es;

4. That I duly execute this SWORN DECLARATION in compliance with the requirement prescribed under Section ____ of
Revenue Regulations No. ________;

5. That I declare, under the penalties of perjury, that this declaration has been made in good faith, and to the best of my knowledge
and belief to be true and correct.

IN WITNESS WHEREOF, I have hereunto set my hand this ___ day of ____________, 20___ at ___________, Philippines

_____________________________________________
Signature over Printed Name of Individual Taxpayer

SUBSCRIBED AND SWORN to before me this _____ day of ____________, 20___ in _______________________________.
Applicant exhibited to me his/her ___________________________issued at _______________________ on _________________________.
(Government Issued ID and No.)

NOTARY PUBLIC
Doc. No.: __________
Page No.: __________
Book No.: __________
Series of ___________

Affix ₱30.00
Documentary
Stamp Tax

(To be filled-out by the withholding agent/lone payor)

Date Received: __________________ Received by:

(MM-DD-YYYY-00001)
_____________________________________________________________
Signature over Printed Name of the Withholding Agent/Payor or Authorized Officer

_____________________________________________________________
Designation/Position of Authorized Officer

_____________________________________________________________
Name of Withholding Agent/Lone Payor
 ANNEX “B-2”

INCOME PAYEE’S SWORN DECLARATION OF GROSS RECEIPTS/SALES

(For Self-Employed and/or Engaged in the Practice of Profession with Lone Income Payor)

I, _________________________________________________, ___________________________, of legal age, single/ married to

(Name) (Citizenship)
_____________________________________________________ permanently residing at _________________________________
(Name of Spouse)
____________________________________________________________________________________________________________ with
(Address)
Taxpayer Identification Number (TIN) __________________________________, after having been duly sworn in accordance with law

hereby depose and state:

1. That I derived my ______________________ income only from ________________________________________________

(business/professional) (Name of Lone Payor)
with Taxpayer Identification Number ___________________ and business address at _____________________________

____________________________________________________________________________________________________;

2. That for the current year ________, my gross receipts will not exceed Two Hundred Fifty Thousand Pesos (₱250,000.00) and
that I am registered as a non-VAT taxpayer; that whatever is the amount of income received, I will comply with the requirement
to file my Income Tax Return on the prescribed due date. For this purpose, I opt to avail of either one of the following:

r Graduated Income Tax Rates under Section 24(A)(2)(a) of the Tax Code, as amended, based on the taxable
income. With this selection, I acknowledge that I am subject to 0% income tax, thus, not subject to creditable
withholding tax; subject to percentage tax, if applicable, and will file the required percentage tax returns or
subject to withholding percentage tax, in case of government money payments.

r Eight Percent (8%) income tax rate under Section 24(A)(2)(b) of the Tax Code, as amended, based on gross
receipts/sales and other non-operating income - with this selection, I understand that this is in lieu of the
graduated income tax rates and the Percentage Tax under Section 116 of the Tax Code, as amended; thus,
no withholding tax shall be made;

3. That based on my selection above, if my gross sales/receipts and other non-operating income exceeds ₱250,000.00 but not over
₱3,000,000.00, my afore-stated lone income payor shall automatically withhold the prescribed rate of withholding tax:

a. In case of Graduated Income Tax Rates, I acknowledge that aside from income tax, I am subject to business
tax (Percentage Tax, if applicable) and creditable withholding of income in excess of P250,000.00, and
business tax withholding, if any, are applicable on the entire income payment; OR

b. In case of Eight Percent (8%) income tax rate, I acknowledge that I am only subject to income tax and thus,
to the creditable withholding income tax in excess of P250,000.00;

4. That I duly execute this SWORN DECLARATION in compliance with the requirement prescribed under Section ____ of
Revenue Regulations No. ________;

5. That I declare, under the penalties of perjury, that this declaration has been made in good faith, and to the best of my knowledge
and belief to be true and correct.

IN WITNESS WHEREOF, I have hereunto set my hand this ___ day of ____________, 20___ at ___________, Philippines

_____________________________________________
Signature over Printed Name of Individual Taxpayer

SUBSCRIBED AND SWORN to before me this _____ day of ____________, 20___ in _______________________________.
Applicant exhibited to me his/her ___________________________issued at _______________________ on _________________________.
(Government Issued ID and No.)

NOTARY PUBLIC
Doc. No.: __________
Page No.: __________
Book No.: __________
Series of ___________

Affix ₱30.00
Documentary
Stamp Tax

(To be filled-out by the withholding agent/lone payor)

Date Received: __________________ Received by:

(MM-DD-YYYY-00001)
_____________________________________________________________
Signature over Printed Name of the Withholding Agent/Payor or Authorized Officer

_____________________________________________________________
Designation/Position of Authorized Officer

_____________________________________________________________
Name of Withholding Agent/Lone Payor
 ANNEX “B-3”

INCOME PAYEE’S SWORN DECLARATION OF GROSS RECEIPTS/SALES

(For Non-Individual Taxpayer with Several Income Payors)

I, ______________________________________, ___________________________, authorized officer of

(Name) (Citizenship)
_____________________________________________________________________ with registered address at
(Name of Non-Individual Income Payee))
_______________________________________________________________________________________with
(Address)
Taxpayer Identification Number (TIN) __________________________________, after having been duly sworn in
accordance with law hereby depose and state:

1. That for the current year ________, the gross receipts of the aforesaid non-individual payee will
not exceed Seven Hundred Twenty Pesos (₱720,000);

2. That I duly execute this SWORN DECLARATION in compliance with the requirement
prescribed under Section ____ of Revenue Regulations No. ________;

3. That I declare, under the penalties of perjury, that this declaration has been made in good faith,
and to the best of my knowledge and belief to be true and correct.

IN WITNESS WHEREOF, I have hereunto set my hand this ___ day of ____________, 20___ at
___________, Philippines

__________________________________________
Signature over Printed Name of Individual Taxpayer

SUBSCRIBED AND SWORN to before me this _____ day of ____________, 20___ in

_______________________________. Applicant exhibited to me his/her ___________________________issued
at _______________________ on _________________________.
(Government Issued ID and No.)

NOTARY PUBLIC
Doc. No.: __________
Page No.: __________
Book No.: __________
Series of ___________

Affix ₱30.00
Documentary
Stamp Tax

(To be filled-out by the withholding agent/lone payor)

Date Received: __________________ Received by:

(MM-DD-YYYY-00001)
_____________________________________________________________
Signature over Printed Name of the Withholding Agent/Payor or Authorized Officer

_____________________________________________________________
Designation/Position of Authorized Officer

_____________________________________________________________
Name of Withholding Agent/Lone Payor