Revenue Memorandum Circular (RMC) No. 112-2026

Date of Issuance: October 22, 2026

Effectivity: Immediately

Clarifying the Provisions of Revenue Regulations No. 006-2026 on the Separate Presentation of Creditable Withholding Tax in Sales Invoices, and Providing Transitory Guidelines Thereof

RMC No. 112-2026 introduces and clarifies the requirement to separately present Creditable Withholding Tax (CWT) information on invoices. The requirement applies only when the specific transaction is subject to CWT, rather than automatically applying to every business-to-business transaction.

Key Highlights

1. Principal Requirement

Revenue Regulations (RR) No. 6-2026 amended Section 6(B) of RR No. 7-2024 by adding the amount of CWT, if applicable, as mandatory invoice information. The CWT must be shown as a separate item on the invoice.

The seller must issue the invoice for the full amount of the sale and separately show:

• Gross invoice amount;
• Applicable CWT;
• Net amount due from the buyer or payor.

CWT must not be treated as a discount or as a reduction of gross sales, service revenue, VATable sales, or the applicable VAT base.

2. Applicability Is Transaction-Specific

The requirement applies only if the buyer or payor is legally required to withhold CWT under the Tax Code and applicable revenue issuances. The classification of a transaction as B2B or B2C is not, by itself, determinative:

• A B2B transaction is subject to CWT only when the buyer or payor has a withholding obligation.
• An ordinary B2C transaction is generally not subject to CWT when the customer is not a withholding agent, subject to the specified exception involving the sale of real property classified as an ordinary asset to individuals.
• If the transaction is not subject to CWT, the invoice need not show a CWT amount. An existing CWT field may be left blank or marked “N/A” or “0.00.”

3. Respective Responsibilities Of The Buyer And Seller

The buyer or payor is primarily responsible for determining:

• Whether CWT applies;
• The income-payment classification;
• Applicable Alphanumeric Tax Code or ATC;
• Withholding rate;
• Tax base; and
• Amount to be withheld.

When determinable at the time of invoicing, the buyer should communicate this information to the seller before the invoice is prepared or finalized. Based on the information provided, the seller must separately present the applicable CWT and the resulting net amount due.

The seller may rely in good faith on information timely provided by the buyer, unless the seller knows, or should reasonably know, that the information is incomplete, incorrect, or inconsistent with the transaction.

However, the seller shall not be held solely liable for the omission or incorrect reflection of CWT arising from the buyer’s failure to timely provide complete and correct withholding information, unless the seller knew or had a reasonable basis to know that the transaction was subject to CWT or that the withholding information provided was incorrect.

The seller or payee shall not be required to independently determine or presume an undisclosed withholding obligation of the buyer or payor. However, where withholding information is already available to the seller through a contract, purchase order, billing instructions, prior transactions, or other records provided by the buyer or payor, the seller shall take such information into account in preparing the invoice.

4. Corrections After Invoice Issuance

If the buyer determines only after invoice issuance that CWT should have been withheld, the original invoice remains valid. The buyer must promptly notify the seller and provide the applicable withholding information and computation. The seller must then issue a BIR-registered Credit Memo reflecting the CWT and cross-referencing the original invoice.

The original invoice must not be erased, overwritten, cancelled, or reused. The Credit Memo serves to document the CWT and revised net amount due, but must not reduce gross sales, VATable sales, or output VAT.

5. Existing Manual And Loose-leaf Invoices

Existing unused or unissued invoices as of the effectivity of RR No. 6-2026 may continue to be used until fully consumed. For transactions subject to CWT, the seller must stamp, print, or legibly write one of the following phrases, together with the CWT amount:

• “Less: Withholding Tax”;
• “Less: Creditable Withholding Tax”; or
• “Less: CWT.”

The information must appear on both the original and duplicate copies before issuance.

Existing invoices used for transactions not subject to CWT do not have to be stamped, and taxpayers need not stamp all remaining invoice booklets in advance.

Taxpayers are not required to surrender unused invoices, obtain new Authority to Print, or secure prior Revenue District Office approval solely because their existing invoice layout lacks a CWT field. However, invoices subsequently printed under an ATP issued after the effectivity of RR No. 6-2026 must contain a separate CWT line item.

A blank CWT field in an invoice shall not be treated as an omission of mandatory information when the transaction is not subject to CWT. It shall likewise not be construed as evidence that the buyer failed to withhold tax. However, a blank field shall not preclude the BIR from verifying the actual nature of the transaction through the taxpayer’s books of accounts or using third-party information to determine the payor’s actual withholding tax obligation.

6. System-generated And Electronic Invoices

CRM/POS systems, CAS/CBA with accounting records and electronic invoicing, and other invoicing systems must eventually include the prescribed CWT phrase or field as part of their registered or accredited configuration. Once implemented, the field must be permanently available in every invoice output, although it may be blank or show “N/A” or “0.00” for transactions not subject to CWT.

For transactions subject to CWT, the system must retain relevant information, including the buyer’s withholding-agent status, income-payment classification or ATC, withholding rate, tax base, CWT amount, gross invoice amount, and net amount due. It must also maintain an audit trail identifying users who entered, changed, or approved the withholding treatment.

7. Limited Versus Material System Changes

A modification limited to capturing, computing, recording, reconciling, reporting, or displaying CWT information is treated as a Limited System Change, similar to a minor enhancement. By itself, it does not require a new registration or accreditation, although applicable written notification or reporting requirements for minor enhancements remain in effect.

A modification becomes a Material System Change when it goes beyond what is reasonably necessary to implement the CWT functionality and materially affects core features, such as:

• Invoice-numbering controls;
• Principal sales-recording functions;
• Software or database architecture;
• Hosting or cloud environment;
• Security and authentication controls;
• Audit-trail functionality;
• System integrations;
• Reliability or BIR access; or
• Other core system functions.

Material System Changes remain subject to the applicable registration, approval, Permit to Use, Acknowledgment Certificate, or accreditation requirements before implementation.

8. Transitory Compliance Deadlines

• Systems covered by the mandatory electronic invoicing requirement must have CWT functionality by the applicable electronic-invoicing compliance deadline. The circular indicates that the functionality should apply beginning January 1, 2027, or a later date prescribed by a subsequent issuance.
• Existing POS and other invoicing systems not yet subject to mandatory electronic invoicing are generally allowed until March 31, 2027, to complete the modification or reconfiguration.
• Existing cash register machines are likewise generally allowed until March 31, 2027, with the required functionality beginning April 1, 2027, unless the BIR prescribes another date.

Pending system modification, the seller must stamp, print, or legibly write the applicable CWT phrase and amount on a printed system-generated invoice for a transaction subject to CWT. This transitory method must not alter the original invoice number, sales record, electronic journal, or audit trail.

9. E-marketplace And Online Platform Transactions

Where an e-marketplace, online platform, digital financial services provider, or similar intermediary withholds CWT from remittances to an online seller:

• The seller issues the invoice to the consumer for the full sale amount.
• The CWT withheld by the platform is not deducted from the amount payable by the consumer because the consumer is not the withholding agent.
• The CWT field on the consumer invoice may be blank or marked “N/A” or “0.00.”
• The platform separately reflects the CWT in its settlement statement or remittance advice and issues the appropriate withholding tax certificate.
• The seller must not issue another sales invoice merely upon receipt of the platform’s net remittance.

If the platform itself purchases the goods or services as principal and is identified as the buyer or payor, the seller must issue the invoice to the platform and separately show the CWT when it is reasonably determinable.

10. Tax And Documentary Implications

The CWT amount shown on the invoice is informational. It does not eliminate the buyer’s duty to properly deduct, remit, report, and certify the tax, nor does it replace the required withholding tax certificate. It also does not conclusively establish the seller’s entitlement to the tax credit without the documentary substantiation required under existing rules.

Further, omission of the CWT amount does not, by itself:

• Disallow the buyer’s input VAT if all essential VAT information is complete; or
• Disallow the expense if it is ordinary, necessary, business-related, and properly substantiated.

The new presentation requirement also does not change the legally prescribed time of withholding.

11. Summary Matrix Of Compliance Periods And Transitory Treatment By Invoicing Method

The applicable transitory treatment and compliance periods for manual, loose-leaf, CRM/POS System, CAS/CBA with Accounting Records (with electronic invoicing), and other invoicing systems or software are summarized in Annex “A”. The periods prescribed herein shall not suspend the requirement to reflect the applicable CWT information in a transaction subject to CWT through the prescribed transitory method pending full system modification or reconfiguration.