The Philippines issued Revenue Regulation 12-2013 (Rev. Reg. 12-2013) on 13 July 2013. Rev. Reg. 12-2013 is applicable to payments made to both domestic and foreign beneficiary and it will effective from 28 July 2013 for payments that are related to withholding tax. The regulation will reject a payment as a taxable reduction when the payer fails to withhold the proper tax on the payment even if the payer ultimately pays the withholding tax liability at the time of a tax audit.
Based on the Rev. Reg. 12-2013, it can be found that the regulation would apply when no tax is withheld and the withholding agent withholds tax at a decreased treaty rate based on a pending TTRA (tax treaty relief application), but the TTRA is ultimately refused, Rev. Reg. 12-2013 does not appear to be applicable.
