Certificate of Creditable Tax Withheld at Source — issued by withholding agents to payees, used to claim creditable withholding tax in the income tax return.
BIR Form 2307 is one of the most frequently encountered BIR documents in Philippine business. Any time a company pays for a professional service, rental, or other income subject to expanded withholding tax, the payor is required to issue a 2307 to the service provider. The form documents exactly how much tax was withheld so the payee can recover it later.
The form shows the payor's name and TIN, the payee's name and TIN, the ATC (Alphanumeric Tax Code) that identifies the type of income, the gross income paid, the tax rate applied, and the total tax withheld. It is issued quarterly — within 20 days after the close of each calendar quarter — and covers all payments made during that quarter.
In practice: Suppose Juana's Catering Services rendered services to Maynilad Trading Corporation worth ₱100,000. Maynilad withheld 2% (₱2,000) as expanded withholding tax and remitted it to the BIR. Maynilad issues Juana a BIR Form 2307 showing ₱2,000 withheld. When Juana files her annual income tax return (BIR Form 1701), she presents this 2307 as a tax credit — reducing her income tax payable by ₱2,000.
Why it matters: Missing 2307s mean you cannot claim the credit you are legally entitled to. Always collect 2307s from every client who withheld tax from your payments. Keep them organized by quarter — you will need them when filing your annual ITR.
Businesses that issue 2307s must also file monthly and quarterly withholding tax returns (BIR Form 1601-EQ) to report the amounts withheld and remitted. The amounts on all 2307s issued must reconcile with those returns.