25 October 2026 · Bureau of Internal Revenue

The CWT line on your invoice, and two deadlines

The Bureau of Internal Revenue published Revenue Memorandum Circular No. 112-2026 on 22 October 2026, clarifying when the creditable withholding tax amount must appear as a separate item on a sales invoice. The compliance date depends on the system that issues the invoice: 31 December 2026 for covered electronic invoicing, 31 March 2027 for existing POS, CRM and other systems.

RMC No. 112-2026 clarifies Revenue Regulations No. 006-2026, which amended Section 6(B) of RR No. 7-2024 by adding the amount of creditable withholding tax (CWT), if applicable, as a separate item on the invoice. The circular narrows when that line is required, and sets the date by which each kind of invoicing system must print it.

When the line is required

The requirement applies only when the particular transaction is subject to CWT under the Tax Code and the applicable revenue issuances. A transaction with no withholding obligation needs no CWT amount, no stamp and no completed field. A blank field, or one marked “N/A” or “0.00”, is not an omission of mandatory information.

The circular also closes a shortcut. The business-to-business label does not by itself make a sale subject to CWT, and business-to-consumer status does not by itself exclude it. What decides is whether the buyer or payor is required to withhold. For walk-in and retail customers, the seller may issue the invoice without a CWT amount unless the buyer identifies itself as a withholding agent or the circumstances reasonably indicate that withholding applies.

Where CWT is involved, the first step falls on the buyer: it must communicate the withholding information before the invoice is finalised, including the income payment classification, the ATC, the rate, the tax base and the amount to be withheld. The seller may rely on it in good faith unless it knows, or should reasonably know, that it is wrong.

Two deadlines, by system

Section 7 sets the compliance period by the system that issues the invoice.

• 31 December 2026 for taxpayers using a Computerized Accounting System or Computerized Books of Accounts with accounting records and electronic invoicing, and other software covered by the mandatory electronic invoice issuance requirement under RR No. 11-2025, as amended by RR No. 26-2025, and RMC No. 98-2026. The CWT field must be part of the system's electronic invoice data elements and displayed on every invoice from 1 January 2027, or the day after any later date the Bureau prescribes.
• 31 March 2027 for taxpayers on existing POS or other invoicing systems not yet covered by the mandatory e-invoicing requirement, and for existing cash register machines. From 1 April 2027, every CRM must be able to generate the prescribed phrase and amount on every invoice issued.

A transition period does not suspend the obligation. Pending modification, a transaction subject to CWT still needs the phrase “Less: Withholding Tax”, “Less: Creditable Withholding Tax” or “Less: CWT”, with the amount, stamped, printed or legibly written on the face of the invoice, on the original and on reprint copies, before it is issued.

Paper stock still in the cabinet

Unused or unissued manual and loose-leaf invoices may be used until fully consumed. The phrase and the amount are added only for transactions subject to CWT. Taxpayers are not required to surrender the stock, or to obtain a new Authority to Print solely because the approved layout has no separate CWT field. Invoices printed under an ATP issued after RR No. 006-2026 took effect must carry the separate line item.

What the line does not do

Showing CWT on the invoice does not replace the withholding tax certificate. The amount shown is informational and, by itself, does not establish entitlement to the tax credit. It is not a discount: it must not reduce gross sales, VATable sales or the VAT base. If withholding becomes known after the invoice was issued, the original stands and the correction runs through a BIR-registered Credit Memo that references it.

System changes made solely to capture, compute, record or display CWT are Limited System Changes. They do not require new registration or accreditation, provided core functions such as invoice numbering, sales recording, architecture, security controls and the audit trail are untouched. Changes that go further need the applicable registration, Permit to Use, Acknowledgement Certificate or accreditation before the modified system is used.

Practical order of work

Read the invoice layout before the accounting manual: if the field is absent from the approved layout, it will not appear in the output. Then confirm how withholding information reaches the billing clerk before the invoice is finalised.