Tax Handling

Last updated: 2026-06-02 Summary:

• Tax rules are country-dispatched; PH covers VAT, percentage tax, and withholding.
• Withholding is direction-aware (AR-side CWT receivable vs AP-side EWT payable).
• Tax filing posts GL clearing entries so the ledger tracks remittance.

Country-dispatched tax logic

Tax behavior follows the company’s country. A US company sees no Philippine withholding machinery; a PH company gets VAT, percentage tax, and EWT/FWT/Final VAT.

VAT vs Non-VAT

A PH tenant is either VAT-registered or Non-VAT. Non-VAT registration enforces percentage tax and suppresses VAT rows; the registration status drives what every tax-aware screen shows, consistently.

Withholding tax

Withholding is direction-aware:

• AP-side EWT/FWT — withheld when paying vendors; posts to EWT Payable.
• AR-side CWT — withheld by customers from your receivables; tracked separately and applied per allocation on AR payments.

ATC codes come from a complete built-in reference catalog. Top-Withholding-Agent (TWA) tenants get residual ATC routing per RR 11-2018.

Tax rates

Tax rates are direction- and country-aware, so the same rate table serves input/output and AR/AP correctly. The app works in fractional rates (a 10% rate shows as 0.10) and converts to BIR’s whole-percent convention only when generating DAT files.

Filing with GL clearing

When a tax filing is prepared/filed, the service posts GL clearing entries so liability accounts net to the remittance. Filings follow Pending → Prepared → Filed → Accepted/Rejected.

See also

• BIR compliance overview
• Withholding tax guide
• VAT guides