Every year, withholding agents in the Philippines must file various information returns to summarize the taxes withheld from their transactions. One important document is BIR Form 1604-E, which consolidates all creditable income taxes withheld (expanded) and income payments exempt from withholding tax over the course of the year.
In this blog post, we will explain what BIR Form 1604-E is, who must file it, when it is due, and how to file it properly.
What is BIR Form 1604-E?
BIR Form 1604-E is the Annual Information Return of Creditable Income Taxes Withheld (Expanded) and Income Payments Exempt from Withholding Tax.
It is used to report the total amount of expanded withholding taxes withheld during the calendar year on certain income payments (such as payments to suppliers, contractors, professionals, etc.) that are subject to expanded withholding tax (EWT). It also captures payments made that were exempt from withholding.
This form provides a comprehensive summary of all creditable taxes withheld and ensures that the BIR can match the income reported by suppliers or service providers with the withholding taxes declared by the payors.
Who Needs to File BIR Form 1604-E?
The following entities are required to file BIR Form 1604-E:
Corporations, partnerships, and sole proprietors who have withheld Expanded Withholding Taxes (EWT) on payments made to suppliers, contractors, professionals, or other service providers.
Government agencies that have withheld creditable income taxes.
Individuals or entities acting as withholding agents during the year, whether or not taxes were actually withheld.
Entities who made payments to suppliers or contractors that are exempt from withholding but still require reporting.
In general, if you were obligated to withhold and remit expanded withholding taxes or made exempt payments, you need to file this return.
When Should You File BIR Form 1604-E?
Due Date: BIR Form 1604-E must be filed on or before March 1 of the year following the taxable year.
Example: For income payments made in 2025, the form must be filed by March 1, 2026.
Note: If the due date falls on a weekend or a holiday, the deadline is moved to the next working day.
How to File BIR Form 1604-E
Depending on your taxpayer classification, there are different ways to file the form:
1. eFPS (Electronic Filing and Payment System)
Certain large taxpayers and corporations are required to use eFPS.
Filing through eFPS ensures electronic submission and payment processing.
2. eBIRForms
Other taxpayers not mandated to use eFPS can file through eBIRForms.
After filling out the form, you can either submit online or print and submit manually at the Revenue District Office (RDO) if necessary.
3. Manual Filing (only when allowed)
In some cases, manual filing is permitted. Printed forms must be submitted directly to your respective RDO.
Filing is typically done electronically to comply with the BIR’s push for digital transformation.
Key Parts of BIR Form 1604-E
Here are the key areas you will encounter when filling out BIR Form 1604-E:
TIN and RDO Code: Indicate your Taxpayer Identification Number and Revenue District Office code.
Return Period: Indicate the calendar year (e.g., 2025).
Tax Type: Identify the nature of the withheld taxes (Expanded Withholding Tax).
Income Payments: State the amount of payments made to various suppliers, contractors, professionals, or service providers.
Tax Withheld: Declare the amount of expanded withholding taxes actually withheld during the year.
Income Payments Exempt from Withholding: Report any payments that were exempt but still need to be disclosed.
You must also prepare and submit an Alphabetical List of Payees (Alphalist) as an attachment, showing detailed information about the recipients of the income payments.
The Importance of the Alphalist
The Alphalist is a required attachment to BIR Form 1604-E and contains detailed information on:
Payee names
Payee TINs
Income payments
Amounts of tax withheld
The BIR uses the Alphalist to verify that taxpayers who received payments properly reported these amounts in their tax returns. An inaccurate or missing Alphalist could result in penalties or disallowance of expenses.
Common Mistakes to Avoid
Late Filing: Always file before the deadline to avoid hefty penalties.
Mismatch of Figures: The totals reported in 1604-E should match the sum of your monthly or quarterly withholding tax returns (e.g., BIR Form 1601-EQ).
Incomplete Alphalist: Make sure that all required fields in the Alphalist are filled out, including accurate TINs and payment amounts.
Reporting Exempt Payments Incorrectly: Payments that are exempt from withholding must still be reported properly.
Penalties for Non-Compliance
Failure to file BIR Form 1604-E on time, submission of an incorrect return, or failure to submit the Alphalist may result in:
Penalties for late filing (up to 25% of the tax due)
Interest (12% per annum on unpaid taxes)
Compromise penalties depending on the violation
Timely and accurate filing ensures smooth business operations and compliance with BIR requirements.
Final Thoughts
Filing BIR Form 1604-E is crucial for businesses and withholding agents in the Philippines. It ensures proper reporting of expanded withholding taxes and income payments exempt from withholding. Compliance helps avoid penalties, supports transparency, and allows suppliers and service providers to claim proper tax credits.
If you're unsure how to accomplish the form or generate the correct Alphalist, consulting a tax professional or using accounting software can help simplify the process.
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