MARICEL ALISUAG
MARICEL ALISUAG

As 2015 drew to a close, the concern regarding the withholding of taxes on accrued yearend bonuses payable to employees became more compelling. The deductibility of these accrued expenses and the withholding tax thereon are among the routine issues raised during tax examinations. While bonuses are accrued in the books at yearend and claimed as deductible expense during the year of accrual, the bonuses are usually paid to the employees and the corresponding withholding taxes are remitted the following year. In such cases, the Bureau of Internal Revenue (BIR) frequently questions the tax deduction claimed by the employers on the ground of failure to withhold at the time of accrual.

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