Classification of real estate service practitioners for withholding tax purposes

Income derived by a licensed real estate practitioner (real estate consultant, real estate appraisers and real estate brokers) in his practice of profession shall be considered professional fee subject to 15% creditable withholding tax (CWT) if his gross income for the current year exceeds P720,000, and 10% if otherwise under Section 2.57.2(A)(1) of RR 2-98, as amended.

In the case of real estate service practitioners (RESPs) who failed or did not take up the licensure examination given by the Real Estate Service and are not registered with the Real Estate Service under the Professional Regulations Commission (PRC), their income shall be subject to 10% CWT under Section 2.57.2(G) of RR 2-98, as amended.

The 10% or 10%/15% withholding tax rates shall apply to income payments paid or payable to real estate practitioners starting June 1, 2013.

(Revenue Regulations No. 10-2013, June 6, 2013)

Tax Brief – July 2013

Punongbayan and Araullo