PayMongo does not deduct withholding tax from our merchants' sales. Rather, we refund the equivalent amount, which is 2% of our fees exclusive of VAT. Merchants who are tagged as authorized withholding agents on our system will receive the refund as part of their weekly payout.
A ₱1000 local card transaction will be charged an MDR of 3.5% + ₱15 or a total of ₱50 in fees. This transaction is subject to VAT, which amounts to ₱5.36.
To compute the withholding tax refund for this transaction, get 2% of the ₱50 fee subtracted by ₱5.36 VAT. A total of ₱0.89 should be refunded to the merchant.
A ₱1000 foreign card transaction will be charged an MDR of 3.5% + ₱15 and an additional 1% for the foreign fee for a total of ₱60 in fees. This transaction is subject to VAT, which amounts to ₱6.43.
To compute the withholding tax refund for this transaction, get 2% of the ₱60 fee subtracted by ₱6.43 VAT. A total of ₱1.07 should be refunded to the merchant.
To request for your withholding tax refund activation, you may click on the button below and submit your complete company name, TIN number, and a copy of your BIR 2303 (BIR Certificate of Registration). Email subject should be “Withholding agent - <Company Name>".
🚨VAT will be excluded from fees in the computation of withholding tax refund effective on February 1, 2021. Non-authorized withholding agents are not entitled to the 2% withholding tax refund. 🚨