Do individual tenants withhold?

Generally no. Individuals not engaged in business are not withholding agents. Companies, and individuals engaged in business who are designated withholding agents, withhold on rent they pay.

What if the tenant forgets to give me the 2307?

You still received net. Without the 2307 you cannot claim the credit on your return. Ask for it quarterly; the platform lists payments marked withheld with no 2307 attached.

Guides and FAQ4 min read

Withholding tax on rent: what a lessee deducts and what a lessor reports

When a company rents from you, it pays you less than the invoice and gives you a form for the difference. That form is tax you have already paid. Losing it is losing money.

By the end of this pageYou will understand who withholds and why, how much, what the 2307 is for, how to record a withheld payment, and what to hand your accountant.

On this page

Who withholds, how much What it is Recording it VAT

A company tenant pays the rentCalculator

Monthly rent on the invoice (₱) Withholding rate (%) VAT-registered lessor? (1 = yes, 0 = no)

₱

cash the tenant actually pays you

₱ withheld and remitted to the BIR in your name (the 2307 amount)

₱ total income you report — rent (and VAT if registered, on which no withholding applies)

Withholding applies to the rent, not to the VAT. The credit is yours to claim against your income tax.

Who withholds, how much

Companies and other designated withholding agents deduct expanded withholding tax from rent they pay, at 5% of the gross rent for real property, and remit it to the BIR in the lessor's name. Individuals renting a home do not. The lessee gives the lessor BIR Form 2307 (Certificate of Creditable Tax Withheld at Source) each quarter showing what was withheld.

What it is

An advance payment of your income tax, made by your tenant on your behalf. It is not a discount and not the tenant's money: your income is the full rent; the 2307 is a credit against the tax you owe on it. Without the 2307 you cannot claim the credit, so the certificate is worth exactly its face value.

Recording it

Invoice the full rent. When the net payment arrives, record it with Withheld ticked and the withheld amount: the invoice shows Paid (gross), the payment shows net plus withheld, and the client's record accumulates withheld tax for the quarter. Upload the 2307 to the payments it covers when it arrives. The income register shows gross, withheld and net per payment; the accountant pack lists 2307s received and withheld amounts still uncertified.

VAT

If you are VAT-registered, the invoice carries 12% VAT; withholding applies to the rent, not the VAT. The calculator above shows the split. Whether you are VAT or percentage-tax registered depends on your gross receipts and your registration — your accountant's call.

Rates and forms change. The 5% rate and Form 2307 are current practice under the NIRC and BIR regulations; the BIR revises rates, forms and thresholds. This is general information, not tax advice; your accountant confirms what applies to you.