Withholding tax system in the Philippines is quite an interesting topic for those engaged in trade or business, or those in practice of profession. This is a system of advance collection scheme where the approximate income tax of a specific income payment is being deducted and remitted to the BIR. By this, BIR is more assured that income will be declared and reported, thus, this is in the form of a check and balance.

In a corporate world, dividends is not a new topic. As a matter of fact, it is one of the major consideration for an investor to purchase shares of stock of a company. It represents the share in the net learning’s distribution in a corporation and could be in the form of cash, property, shares of stocks or and liquidating dividends upon liquidation. How are they taxed, then?