Do Your Invoices Need to Show Creditable Withholding Tax Now? What BIR RMC 112-2026 Means for Your Business
Every business that issues invoices needs a CWT line in its invoice format going forward, but the CWT amount is filled in only when the buyer is legally required to withhold. Here is what must be reformatted, who actually withholds, and the deadlines to update your invoices, POS, and cash registers.
Two separate things are happening. 1) Invoice format (all invoice issuers): Revenue Regulations No. 6-2026 (effective October 16, 2026) added a CWT line to the required invoice information, and its transitory rule told taxpayers to stamp “Less: Withholding Tax” on existing invoices and to print that phrase on all new invoices. RMC No. 112-2026 (issued and effective October 22, 2026) keeps the format change: newly printed invoices must have a separate CWT line, and POS/CRM, accounting, and e-invoicing systems must show the CWT field on every invoice by January 1, 2027 (mandatory e-invoicing taxpayers) or March 31, 2027 (other POS, invoicing software, and cash registers). 2) CWT amount (only some sales): the seller fills in gross amount, less CWT, and net amount due only when the buyer is legally required to withhold on that sale. Otherwise the field stays blank, N/A, or 0.00. RMC No. 112-2026 also clarified that existing unused invoices are stamped only for sales subject to CWT, not all in advance.
Reformat vs. withhold: the short version
| Question | Answer |
|---|---|
| Must my invoice format change? | Yes, for every invoice issuer (VAT or non-VAT): new manual or loose-leaf invoices printed under an ATP issued after RR No. 6-2026 took effect need a separate CWT line, and invoicing systems must display the CWT field on every invoice by their deadline. One format is used for all sales, with or without CWT. |
| Must every invoice show a CWT amount? | No. Only sales where the buyer is required to withhold. For other sales the field is left blank or marked N/A or 0.00. |
| Who withholds? | Only the buyer or payor that is a withholding agent for that payment (e.g., corporations, government offices, top withholding agents paying for covered goods, services, rent, or professional fees). The seller never withholds on its own sale. |
| What about invoices I already have? | Use them until consumed. Stamp or write “Less: CWT” and the amount only on sales subject to CWT; no advance stamping, no new ATP solely for this. |
Who this is for
- Everyone who issues invoices (format): all VAT and non-VAT businesses must use the updated invoice format with a CWT line for new invoice prints and invoicing systems, even if they rarely sell to withholding agents.
- Most affected (amount): VAT and non-VAT businesses that sell goods or services to corporations, government offices, top withholding agents, or other buyers who withhold (e.g., suppliers, contractors, service providers, lessors, professionals billing companies).
- System users: anyone issuing invoices through a POS, CRM, CAS/CBA, or e-invoicing system, since the system must display a CWT field on every invoice by the deadline.
- Format only, rarely an amount: businesses selling mostly to walk-in or individual consumers who are not withholding agents (retail, food, personal services). They still need the CWT line in new prints and systems, but usually leave it blank. They need not ask every walk-in customer whether it is a withholding agent. Ordinary B2C sales are generally not subject to CWT; the RMC notes an exception for sales of real property classified as ordinary assets to individuals.
Who withholds, and who shows CWT on the invoice?
Two different parties, two different jobs:
| Buyer / payor (the withholding agent) | Seller / payee (issues the invoice) | |
|---|---|---|
| Main role | Deducts the CWT from its payment and remits it to the BIR; issues BIR Form 2307 to the seller | Shows the CWT on the invoice when the sale is subject to withholding |
| Decides | Whether CWT applies, the income-payment classification, ATC, rate, tax base, and amount | Does not have to guess or presume an undisclosed withholding obligation |
| Must do | Tell the seller the withholding details before the invoice is finalized, when determinable | Invoice the full sale, then show Gross amount → Less: CWT → Net amount due |
| If info comes late | Promptly notify the seller with the computation | Issue a BIR-registered Credit Memo referencing the original invoice (original stays valid) |
Good-faith reliance
The seller may rely in good faith on withholding information the buyer gives on time, and is not solely liable for errors caused by the buyer's failure to give complete, correct information, unless the seller knew or had reason to know. But if the details are already in a contract, purchase order, billing instructions, or past transactions, the seller should use them.
What it looks like on the invoice
| Gross invoice amount (full sale, VAT-inclusive if VAT-registered) | ₱112,000.00 |
| Less: Creditable Withholding Tax (e.g., 2% of ₱100,000 VAT-exclusive) | (₱2,000.00) |
| Net amount due | ₱110,000.00 |
Illustration only; the rate and base depend on the income payment and are set by the buyer. CWT is not a discount and does not reduce gross sales, VATable sales, or output VAT.
Deadlines and the temporary option
| Your invoicing set-up | CWT field required by |
|---|---|
| Covered by mandatory electronic invoicing | January 1, 2027 |
| Other existing POS systems and invoicing software | March 31, 2027 |
| Existing cash register machines (CRM) | March 31, 2027 |
| Manual and loose-leaf invoices already printed | Use until consumed; stamp/write CWT only on sales subject to withholding |
| New manual and loose-leaf invoices (ATP issued after RR No. 6-2026 took effect) | Separate CWT line required in the layout before use |
Until your system is updated, you may stamp, print, or manually write the CWT details on system-generated invoices for sales subject to withholding. Use one of: “Less: Withholding Tax”, “Less: Creditable Withholding Tax”, or “Less: CWT”, with the amount, on both original and duplicate. You do not need to stamp whole booklets in advance, surrender unused invoices, or get a new Authority to Print solely for this. Adding only the CWT field to a system is a limited system change and generally needs no new registration or accreditation, as long as core functions, security controls, and invoice numbering are unaffected.
Checklist for your business
- List your withholding customers. Corporations, government, top withholding agents, and others who deduct CWT from your payments.
- Ask for their withholding details (ATC, rate, base) and note them in your customer master, contracts, or billing instructions.
- Update your invoice format: tell your accredited printer your next print run must include a separate CWT line, and make sure system invoices will show the CWT field on every invoice.
- Prepare a stamp (“Less: CWT”) for existing manual invoices and system invoices until your system is updated.
- Talk to your POS/CRM/software provider about adding a CWT field before January 1 or March 31, 2027.
- Train billing staff: full gross amount first, CWT as a separate line, never as a discount.
- Set a Credit Memo procedure for late withholding notices, and match against the 2307s you receive.
- If you are also a buyer that withholds, send your suppliers your withholding details before they invoice.
How BGB can help
Not sure if your sales are subject to withholding, or how your invoices and system should look? BGB can review your customer list, invoice format, and POS or software set-up, and help you put a simple CWT and Credit Memo process in place. Call (02) 8631-8618 or connect with BGB.
Frequently asked questions
Do all invoices have to be reformatted?
Going forward, yes. Under RR No. 6-2026 and RMC No. 112-2026, manual and loose-leaf invoices printed under an Authority to Print issued after RR No. 6-2026 took effect must carry a separate CWT line (“Less: Withholding Tax”, “Less: Creditable Withholding Tax”, or “Less: CWT”), and POS, CRM, CAS/CBA, e-invoicing and other systems must display the CWT phrase and field on every invoice output by their deadline. The same invoice format is used for sales with and without CWT. The exception is existing unused stock: it may be used until consumed and is stamped only on sales subject to CWT.
Does every invoice now have to show a CWT amount?
No. The amount is shown only when the buyer or payor is legally required to withhold CWT on that transaction (RR No. 6-2026 says “if applicable”; RMC No. 112-2026 confirms it). Being B2B does not by itself make a sale subject to withholding. If no CWT applies, the CWT field may be left blank or marked N/A or 0.00, and that is not an invoice violation.
Does the seller withhold anything?
No. Withholding is done by the buyer or payor that is a withholding agent under Section 57(B) of the Tax Code and RR No. 2-98. It deducts the CWT, remits it to the BIR, and issues BIR Form 2307. The seller only presents the gross amount, the CWT, and the net amount due on its invoice.
Who decides whether CWT applies, the buyer or the seller?
The buyer or payor (the withholding agent). It is primarily responsible for determining whether CWT applies, the income-payment classification, ATC, rate, tax base, and amount, and should tell the seller before the invoice is finalized. The seller then shows the CWT and net amount on the invoice, and may rely in good faith on the buyer's information.
Does CWT reduce my sales or VAT?
No. The seller invoices the full amount of the sale. CWT is shown separately and must not be treated as a discount or as a reduction of gross sales, VATable sales, or output VAT.
What if the buyer tells us about withholding only after the invoice is issued?
The original invoice stays valid. The buyer notifies the seller with the withholding details, and the seller issues a BIR-registered Credit Memo showing the CWT and referencing the original invoice. Do not erase, cancel, or reuse the original invoice.
Do we need new invoices or a new Authority to Print?
Not right away. You do not have to surrender unused invoices or get a new ATP solely for this; existing unused manual and loose-leaf invoices may be used until consumed. But your next print run (under an ATP issued after RR No. 6-2026 took effect) must include a separate CWT line in the layout. For sales subject to CWT, stamp, print, or legibly write “Less: Withholding Tax”, “Less: Creditable Withholding Tax”, or “Less: CWT” with the amount, on both original and duplicate copies. No advance stamping of whole booklets is needed.
When must our POS or invoicing system have a CWT field?
Taxpayers covered by mandatory e-invoicing: by January 1, 2027. Other existing POS systems, invoicing software, and cash register machines: by March 31, 2027. Until updated, you may stamp, print, or handwrite the CWT information on system-generated invoices for sales subject to withholding. Adding only the CWT field is treated as a limited system change and generally does not need new registration or accreditation.
Official sources & references
- Revenue Memorandum Circular No. 112-2026 (October 22, 2026), clarifying RR No. 6-2026 on the separate presentation of CWT in sales invoices: BIR RMC list
- Full text of RMC No. 112-2026: BIR PDF
- Revenue Regulations No. 6-2026, amending Section 6(B) of RR No. 7-2024 (invoicing requirements): Sec. 2 adds Item 22, “The amount of Creditable Withholding Tax, if applicable, shall be shown as a separate item”; Sec. 3 transitory rule on stamping “Less: Withholding Tax”
- P&A Grant Thornton, BIR clarifies the presentation of CWT in sales invoices (Nov 4, 2026)
- Reyes Tacandong & Co., BIR RMC No. 112-2026
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