Date of Publication: 9 November 2026
Revenue Regulations No. 06-2026 (“RR 06-2026”) requires that the amount of creditable withholding tax (CWT) be shown as a separate item in the invoice only if the particular transaction is subject to CWT. The continued use of unused or unissued invoices existing as of the effectivity of RR 06-2026 is allowed until fully consumed subject to the prescribed manner of indicating the CWT information. Accordingly, the stamping of the phrase “Less: Withholding Tax” on the unused or unissued invoices is required only when the particular transaction is subject to CWT.
The Bureau of Internal Revenue (BIR) has issued Revenue Memorandum Circular (RMC) No. 112-2026 to clarify the implementation of RR 06-2026.
Core Clarifications
• Application Rule: The requirement to show CWT as a separate invoice item applies only when the specific transaction is subject to CWT.
• Business-to-Business (B2B) vs. Business-to-Consumer (B2C) Clarification: B2B classification does not automatically trigger CWT; it depends entirely on whether the buyer/payor is legally required to withhold CWT. Ordinary B2C transactions are not subject to CWT, except for sales of real property (ordinary assets) to individuals.
• Non-CWT Transactions: If a transaction is not subject to CWT, no CWT field, entry, or stamp is required and the absence thereof shall not, by itself, affect the validity of the invoice. Pre-printed or system-generated CWT fields on such invoices may be left blank or marked as “N/A” or “0.00” without penalty.
• Seller and Buyer Obligations:
– Buyers must communicate their withholding information to sellers before the invoice is finalized.
– Sellers can rely on this information in good faith unless the seller knows or should reasonably know that such information is erroneous, incomplete, or inconsistent with the nature of the transaction.
– A seller engaged primarily in ordinary B2C transactions shall not be required to ask every walk-in or retail customer whether the customer is a withholding agent. Unless the buyer identifies itself as a withholding agent or the circumstances reasonably indicate that the transaction is subject to CWT, the seller may issue the invoice without indicating the CWT amount.
– If a buyer determines that CWT was mistakenly omitted after an invoice has already been issued, the buyer must promptly inform the seller and provide the applicable withholding information and computation. The error is corrected by the seller by using a Credit Memo rather than modifying the original invoice.
– Discrepancies in the CWT amount between the invoice and the payor’s calculation must be resolved before payment whenever practicable. Any later adjustments or corrections to the CWT or withholding details must be recorded using a BIR-registered Credit Memo that cross-references the original invoice. This Credit Memo is strictly used to adjust the CWT and the final net amount due; it cannot be used to lower the originally reported gross sales, value added taxable sales, or output value added tax (VAT).
– The amount of CWT reflected on the invoice shall not relieve the buyer/payor of its obligation to issue withholding tax certificate. The amount of CWT shown on the invoice shall be treated as informational and shall not, by itself, conclusively establish the seller’s entitlement to the corresponding tax credit without the documentary substantiation required under existing rules.
– The omission of the CWT amount shall not, by itself, disallow the buyer’s input VAT, or claimed expense.
• E-Marketplace Operator, Online Platform, Digital Financial Services Provider
– The invoice issued to the buyer or consumer shall contain the phrase ” Less: Withholding Tax,” “Less: Creditable Withholding Tax,” or “Less: CWT.” However, since the buyer/consumer is not the withholding agent for the platform remittance, the CWT withheld by the platform shall not be reflected as a deduction from the amount payable by the buyer/consumer. The corresponding CWT field in the buyer’s/consumer’s invoice may be left blank or marked “N/A,” or “0.00.”
– The CWT deducted from the online merchant’s remittance shall be separately reflected in the settlement statement, remittance advice, or similar document issued to the seller/merchant. The E-Marketplace Operator, Online Platform, Digital Financial Services Provider shall likewise issue the applicable Certificate of Creditable Tax Withheld at Source.
– Sellers/merchants shall not issue a second sales invoice when they receive the net remittance from the platform, as the original transaction was already invoiced to the buyer/consumer. However, an invoice must be issued directly to the platform (including the applicable CWT, as a separate item, if known or determinable) if the platform purchases the goods or services as the principal, resells them in its own name, or is identified as the buyer/payor in the invoice.
Transitory & Modification Guidelines
1. Manual and Loose-Leaf Invoices
Taxpayers may continue using existing, unused manual or loose-leaf invoices until they are fully consumed.
For CWT-applicable transactions, sellers must indicate “Less: Withholding Tax,” “Less: Creditable Withholding Tax,” or “Less: CWT”.
2. Electronic and System-Generated Invoices
Cash register machine (CRM)/point-of-sale (POS) systems, Computerized Accounting Systems (CAS), Computerized Books of Accounts (CBA) with electronic invoicing and other invoicing software must incorporate a CWT field as part of invoice configuration.
Modifications to include CWT data fields in invoicing systems are generally classified as Limited System Changes (minor enhancements) rather than Material System Changes, meaning they do not require new BIR system registration or accreditation.
The RMC establishes specific compliance deadlines for system reconfigurations:
• 31 December 2026: For taxpayers using CAS, CBA with electronic invoicing, and other software covered under mandatory e-invoicing.
• 31 March 2027: For taxpayers utilizing existing POS systems, CRM, or other invoicing software not yet mandated for electronic invoicing.
Pending system modifications, taxpayers must follow transitory compliance rules by stamping or printing the required CWT phrase and amount on the face of system-generated invoices for transactions subject to CWT.