BIR Form 2307: Complete Guide for Filipino Businesses (2026)

BIR Form 2307 is one of the most misunderstood documents in Philippine business accounting. Business owners receive it from clients and wonder what to do with it. Freelancers issue it and aren't sure they're doing it right. Accountants spend hours chasing down missing copies at year-end.

This guide explains everything you need to know about BIR Form 2307 — what it is, who issues it, what the ATC codes mean, and exactly how to use it when you file your quarterly income tax return.

What Is BIR Form 2307?

BIR Form 2307 is the Certificate of Creditable Tax Withheld at Source. When a business (called a withholding agent) pays you for a service or purchase, they are required by law to withhold a percentage of that payment and remit it directly to the BIR on your behalf. Form 2307 is the official certificate proving that this withholding happened.

Think of it as a receipt from your client confirming that a portion of your income has already been paid to the BIR for you. You then use this certificate to offset against your income tax liability when you file your quarterly or annual ITR.

Who Issues Form 2307?

Form 2307 is issued by the withholding agent — the person or company making the payment. Common examples:

• Corporations paying suppliers, consultants, freelancers, or service providers
• Government agencies paying contractors (though they use different forms too)
• Real estate developers paying brokers
• Businesses with expanded withholding tax status paying their service providers

If you provide services — design, legal, accounting, IT, construction, marketing — and your clients are registered businesses, they will almost certainly withhold and issue you a 2307.

Who Receives Form 2307?

You receive Form 2307 as the payee — the person or business being paid. The certificate is your proof that your client already paid a portion of your tax for you.

Example:

• Freelancer Maria billed a corporation ₱50,000 for web design services
• The corporation is required to withhold 10% on professional fees
• Withholding amount: ₱50,000 × 10% = ₱5,000
• Maria receives payment of ₱45,000 (net of withholding)
• The corporation issues Maria a BIR Form 2307 showing ₱5,000 withheld

Maria's real income is ₱50,000, but she only received ₱45,000. The 2307 proves the ₱5,000 difference was paid to BIR as creditable withholding tax.

Understanding ATC Codes on Form 2307

The ATC (Alphanumeric Tax Code) tells you what type of payment triggered the withholding and at what rate. Here are the most common codes:

For Professionals and Service Fees

ATC Code	Description	Rate
WC158	Professional fees (lawyers, CPAs, engineers, architects, etc.) — gross payment over ₱720K/year	15%
WC010	Professional fees — gross payment ₱720K/year or below	10%
WC000	Rentals on real property	5%

For Income from Trading/Business

ATC Code	Description	Rate
WI010	Income payments to distributors/dealers/agents	1%
WI011	Income payments to sub-agents/dealers on commission	10%
WC157	Talent fees for entertainers, sportsmen, etc.	15%

For Purchases of Goods

ATC Code	Description	Rate
WI001	Purchases of goods — per purchase ₱10,000 or more	1%
WI002	Purchases of services — per purchase ₱10,000 or more	2%

When Must Form 2307 Be Issued?

Form 2307 must be issued by the 20th day of the month following each calendar quarter:

Quarter	Covered Period	Deadline
Q1	January – March	April 20
Q2	April – June	July 20
Q3	July – September	October 20
Q4	October – December	January 20 (following year)

In practice, many businesses issue a 2307 per payment or monthly. As long as it covers the correct quarter and reaches you before you file your quarterly ITR, you're fine.

How to Use Form 2307 in Your Tax Return

This is where many business owners get confused. Here is the step-by-step:

Step 1: Gather all your 2307s for the quarter

Collect every Form 2307 issued to you for income earned during the quarter. If you received income in Q1 (January–March), collect all 2307s covering those payments.

Step 2: Total the withholding tax amounts

Add up the total tax withheld shown on all your 2307s for the quarter.

Example:

• Client A withheld ₱2,500 (5% on ₱50,000 rental)
• Client B withheld ₱8,000 (10% on ₱80,000 professional fee)
• Client C withheld ₱1,200 (1% on ₱120,000 goods purchase)
• Total creditable withholding tax: ₱11,700

Step 3: Compute your income tax due

Compute your income tax for the quarter based on your taxable income. The method depends on your taxpayer type (graduated rates, 8% flat rate for self-employed, or regular corporate rate).

Step 4: Subtract your creditable withholding tax

Income Tax Due for Q1     ₱15,000
Less: Creditable WT       ₱11,700
Net Tax Payable           ₱3,300

You only pay ₱3,300 to the BIR instead of ₱15,000, because your clients already paid ₱11,700 on your behalf.

Step 5: Attach 2307s to your ITR

When filing your quarterly ITR, you must attach all Form 2307s used as tax credits. The BIR reconciles these against what the withholding agents reported.

Common Mistakes with BIR Form 2307

Mistake 1: Not claiming all your 2307s

Some business owners file their ITR without attaching some 2307s because they forgot to collect them or lost the paperwork. This means they overpay their tax. Always chase down 2307s from every client before filing.

Mistake 2: Confusing 2307 with 2316

BIR Form 2316 is the Certificate of Compensation Payment/Tax Withheld — issued by employers to employees for payroll withholding. Form 2307 is for business income withholding (non-compensation). They are used on different tax returns.

Mistake 3: Wrong ATC codes

If a client withholds at the wrong rate or uses the wrong ATC, you need to correct it before you use it. A 2307 with the wrong ATC may be questioned by BIR during an audit.

Mistake 4: Claiming 2307s for the wrong quarter

A 2307 issued for Q1 income cannot be carried over and used against Q2 tax. Use your 2307s in the quarter when the income was earned, not when the certificate was issued.

Mistake 5: Missing the filing deadline

If you miss the 20th-day deadline for issuing 2307s (as a withholding agent), you face penalties under the Tax Code — ₱1,000 per failure, up to ₱25,000 per year. Issue them on time.

Practical Checklist for Receiving Businesses

If your clients withhold and issue 2307s to you:

• Request a 2307 from every client that pays you for the quarter
• Verify the amount matches what they withheld (gross payment × withholding rate)
• Check the ATC code matches the type of income
• Check the quarter covered is correct
• Keep originals — attach to your ITR filing
• Enter total creditable WT in your quarterly ITR

Practical Checklist for Withholding Agents

If your business is required to withhold and issue 2307s:

• Compute withholding tax at the correct rate for each payment
• Remit to BIR on the due date (10th or 15th of following month, depending on filing method)
• Issue 2307 to payees by the 20th day after quarter end
• Keep copies on file — BIR may ask during audit
• Use the correct ATC code for each payment type

How Akauntants Handles Form 2307

Akauntants automatically tracks all payments you receive that are subject to creditable withholding tax. When you record an invoice and mark it as paid with withholding, the system logs the 2307 credit. At quarter end, the total creditable WT is automatically populated in your quarterly ITR computation, and your 2307 log is ready to attach.

No more hunting for paper certificates or manually totaling withholding amounts at tax time.

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BIR Form 2307 rules are governed by Revenue Regulations 2-98 and subsequent amendments. Always verify current rates and deadlines with the BIR or your tax advisor, as regulations change.