Need your expert advise… We are engaged in a construction and architectural services and we are still new in the business.. Upon receipt of the payment coming from the client we also received a 2307 form for the 2% withholding tax on services rendered (the project was office construction ).. I am quite confused as the amount being withheld was not based on the vatable portion of the contract.. What is the basis for withholding 2% tax for the services rendered to a certain company?
Is it solely the labor portion of the contract since this is a service in nature or the whole amount of contract? This is as per the withholding agent’s answer.
Thanks a lot!