Filing of Quarterly Tax Returns and Deposit of the 10% Withholding for Rendered Services


On its Internal Revenue Circular Letter No. 19-10 (CC RI 19-10), the Treasury Department informs on the rules, procedures, and dates on which both the Quarterly Tax Returns and Deposits of the 10% withholding for rendered services must be submitted.  Following, we present a summary of the information included on CC RI 19-10.


Effective for the quarter ending on March 31, 2019, any person or entity obliged to make the 10% Withholding must file the Quarterly Tax Return using Form 480.6 SP-1, Quarterly Return of Tax Withheld on Payments for Services Rendered (Form 480.6 SP-1), to inform on the tax withholdings made during each quarter of the year.  The Tax Return must be filed electronically through SURI no later than the last day of the month following the quarters ending on March 31, June 30, September 30, and December 31 of each year.  For 2019, the Forms 480.6 SP-1 corresponding to each quarter are due on April 30, July 31, October 31, 2019, and January 31, 2020, respectively.


However, in order to ease the compliance for filing and to provide enough time to the withholding agents to collect all the needed information, the due date for electronically filing Form 480.6 SP-1 for the quarter ending on March 31, 2019—April 30, 2019– has been moved to Wednesday, July 31, 2019.  Thus, both the Tax Return for quarters ending on March 31, 2019, and June 30, 2019, are due no later than Wednesday, July 31, 2019.

Processing and Modifications to the Quarterly Tax Returns


Processing of the Quarterly Tax Returns through SURI is made once a day. Once the process is concluded, the TD will issue a notice at the link titled Mail at the taxpayer’s SURI account confirming that the tax return has been duly processed. The process allows the withholding agent or his tax return, declarations, or refund specialist to modify any submitted form, provided that the change is made before the TD has processed the tax return.  The changes will not be considered as an amendment as the TD will consider the last form submitted before the daily process has been made to be the original.  Any changes to the Form made after it has been processed will be considered an amended tax return.


It is important to note that the total amount of the retained tax informed on Forms 480.6 SP-1 must be equal to the total amount of the 10% Withholdings informed on the Reconciliation Statement of the Informative Tax Declarations filed for each year.  Any difference will be considered as a 10% Withholding made but not paid by the withholding agent and will be subject to interests, surcharges, and penalties until they have been adjusted and informed on the corresponding forms.


Deposits of the 10% Withholding and Minimum Amount Rule


Any payer obliged to make the 10% withholding must deposit the amount retained at the TD no later than the 15th day of the following calendar month on which the retention was made.  From December 31, 2018, and thereon, all deposits must be made through SURI.


Withholding agents that fail to send the 10% withholdings for each month will be subject to interests, surcharges, and penalties on the amount retained and not deposited at the time it was due.  There are no requests for an extension of time available to file this Quarterly Return.  If the Quarterly Return is not filed within the time prescribed, there shall be assessed a penalty of $500 for each return not filed.


Minimum Amount Rule


In order to ease the rules for the deposit of the 10% Withholding, the TD has established the Minimum Amount Rule which allows withholding agents whose withholdings are less than $2,500 to make their deposit at the time they file the Quarterly Tax Return.  In such cases, they will not be subject to interests, surcharges or penalties, provided they file the Tax Return and pay the amount on the due date.

However, withholding agents that comply with the Minimum Amount Rule may deposit the withholdings each month if they wish to do so.  Failing to make the deposits either on a monthly or quarterly basis may imply the payment of interest, surcharges, and penalties.  If at the end of the quarter, the withholding of 10% results in a total amount greater than $2,500, the withholding agent shall then be deemed not to have complied with the Minimum Amount Rule and therefore is obligated to remit the 10% retention monthly as established by the Code.


NOTE: We remind you that the Torres CPA Group team of professionals is ready to assist with this and any other matter regarding your tax compliance duties.


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