iRealtee OS Glossary

BIR Form 1601-E

BIR Form 1601-E must be filed by:

BIR Form 1601-E

BIR Form 1601-E is the Monthly Remittance Return of Creditable Income Taxes Withheld (Expanded) prescribed by the Bureau of Internal Revenue (BIR) for withholding agents to report and remit expanded withholding tax (EWT) deducted from income payments. The form must be filed on or before the 10th day of the month following the month in which withholding was made.

Key Provisions

  • Filing Frequency: Monthly remittance for all EWT deductions made during the preceding month
  • Due Date: 10th day of the following month (25th for December withholdings, due January 25)
  • Large Taxpayers: Must file by the 25th day of the following month
  • Creditable Nature: Taxes remitted through 1601-E become tax credits for the payee against their annual income tax liability
  • Alphanumeric Tax Codes (ATC): Each income type requires a specific ATC for proper classification

Who is Affected?

BIR Form 1601-E must be filed by:

  • Real estate developers withholding EWT on commission payments to brokers and agents
  • Brokerage firms paying professional fees to sales agents and consultants
  • Property management companies making rental payments to property owners
  • Any business acting as a withholding agent for EWT-covered transactions
  • Government agencies disbursing payments subject to EWT

Common EWT-covered payments in real estate include:

Income Type Tax Rate ATC (Individual) ATC (Corporate)
Real estate broker commissions 10% WI140 WC140
Professional fees (CPAs, lawyers) 10% WI010 WC010
Rental payments (real property) 5% WI100 WC100
Contractor fees 2% WI120 WC120

Penalties

Non-compliance with BIR Form 1601-E carries the following consequences:

  • 25% surcharge for failure to file or pay on time
  • 50% surcharge for willful neglect or fraudulent returns
  • 20% interest per annum on unpaid taxes from due date until full payment
  • Criminal liability: Fine of PHP 10,000 minimum and imprisonment of 1-10 years for willful failure to withhold or remit
  • Personal liability for government employees responsible for withholding

Relevance

For real estate service practitioners and brokerage firms in the Philippines, BIR Form 1601-E is critical for tax compliance when processing commission payments.

When you pay commission to a licensed broker:

  1. Deduct the applicable EWT rate (typically 10% for brokers under ATC WI140/WC140)
  2. Issue BIR Form 2307 to the broker as proof of tax withheld
  3. File BIR Form 1601-E by the 10th of the following month
  4. Remit the withheld amount through Authorized Agent Banks (AABs) or the Electronic Filing and Payment System (eFPS)

Real estate platforms with integrated BIR tax reports and withholding tax features can automate EWT calculations and generate the required forms for timely filing.

References

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