BIR Form 2307 for Architects and Engineers: Withholding Rates and ATC Codes

A business that pays an architect or a PRC-licensed engineer for professional services must withhold expanded withholding tax (EWT) and issue BIR Form 2307, because architects and engineers — civil, electrical, chemical, mechanical, structural, industrial, mining, sanitary, metallurgical, and geodetic — are individually named among the professionals covered by Section 2.57.2(A) of RR No. 2-98, as restructured by RR No. 11-2018. The rate and ATC code depend on whether the payee is the individual professional (5%/10%) or a design/engineering firm organized as a corporation (10%/15%).

This guide is part of the BIR Form 2307 series. It covers who counts as a withholding agent when paying for architectural or engineering services, the individual-vs-firm rate distinction, the ATC codes, the sworn declaration for the lower rate, and a worked example for a building-design project fee.

Are architects and engineers named professionals for withholding tax purposes? #

Yes — architects and a long list of engineering disciplines are individually enumerated among the professionals whose fees fall under the expanded withholding tax rules, in the same clause that names lawyers, certified public accountants, and doctors of medicine. RR No. 2-98, as amended by RR No. 11-2018 to implement the TRAIN Law (RA No. 10963), sets out the enumeration this way:

“…the following individuals shall be subjected to expanded withholding tax: …architects[,] civil, electrical, chemical, mechanical, structural, industrial, mining, sanitary, metallurgical, geodetic engineers…”

— Section 2.57.2(A) of Revenue Regulations No. 2-98, as amended, listing individually engaged professionals subject to expanded withholding tax

Because this is a per-discipline enumeration rather than a single generic “engineer” category, the same 5%/10% individual-professional-fee bracket covers a structural engineer certifying a building’s design, an electrical engineer designing a facility’s power system, a geodetic engineer conducting a land survey, and an architect preparing building plans — regardless of which specific engineering discipline is involved.

Individual professional or design/engineering firm — why the payee type changes the rate #

The withholding rate and ATC code turn on who the actual payee is: an individually licensed architect or engineer is withheld under the individual professional-fee rate, while an architectural, engineering, or design firm organized as a corporation is withheld under the corporate professional-fee rate — even though both are billing for the same kind of design or engineering work. This is the same individual-vs-entity distinction that applies across every PRC-licensed profession under RR No. 11-2018.

A developer that retains “Arch. Dela Cruz” directly — billing under her own name and TIN for a building design — withholds using WI010/WI011. The same developer paying an invoice from “Dela Cruz & Partners Architecture and Engineering, Inc.” for identical design work withholds using WC010/WC011 instead, because the payee on that invoice is a corporation. See BIR Form 2307 for Professional Fees for how this individual-vs-corporate split works across professional fees generally.

Who has to withhold on an architectural or engineering fee? #

Any business or individual engaged in business — a real estate developer, contractor, corporation, or self-employed professional — that pays an architect or engineer for services in the course of that business is a withholding agent and must withhold EWT before releasing payment. Common payors include:

• A real estate developer paying an architect for a subdivision or building’s design plans
• A general contractor retaining a structural engineer to certify a building’s structural design
• A manufacturing company paying an electrical or mechanical engineer for a facility’s system design
• A land developer paying a geodetic engineer to conduct a survey and prepare a subdivision plan
• A corporation retaining an industrial or sanitary engineer as a compliance or facilities consultant

An individual homeowner paying an architect to design their own private residence is not a withholding agent. Withholding under RR No. 11-2018 applies only where the payor is itself in business or in the practice of a profession — an ordinary personal home-construction expense does not trigger the obligation, even though the same architect would be withheld from when working for a corporate client.

The sworn declaration: how an individual architect or engineer gets the 5% rate #

An individual architect or engineer secures the lower 5% rate by filing an Income Payee’s Sworn Declaration of Gross Receipts/Sales with each business that pays them, together with a copy of their BIR Certificate of Registration (BIR Form 2303). Without that declaration on file, the paying business should default to the higher 10% rate rather than assume eligibility.

• Annex “B-1” applies when the professional earns fee income from a single payor for the year.
• Annex “B-2” applies when the professional earns from multiple business clients in the same year — for example, an engineer who consults for several developers — and must be submitted to each payor listing all of them, consistent with how the BIR Sworn Declaration for Lower Withholding guide explains the multi-payor version of this form.

The declaration is due before the first payment of the engagement, or by January 15 of the taxable year for an ongoing arrangement. A design or engineering firm organized as a corporation does not use this individual declaration mechanism — its ATC (WC010/WC011) turns only on its own gross income threshold.

Worked example: a developer’s building-design fee #

Skyline Properties Corporation, a real estate developer, engages Engr. Ramon Aguirre, an individually licensed structural engineer, for a fixed project fee of ₱600,000 to design and certify the structural plans for a mid-rise residential building. Engr. Aguirre bills the developer directly under his own name and TIN and has an Income Payee’s Sworn Declaration of Gross Receipts/Sales (Annex B-1) on file confirming his gross income for the year has not exceeded ₱3,000,000, so ATC WI010 at 5% applies.

Skyline Properties remits the ₱30,000 withheld through BIR Form 0619-E monthly and BIR Form 1601-EQ quarterly, and issues Engr. Aguirre a BIR Form 2307 each quarter showing the cumulative professional fees paid, ATC WI010, and the total tax withheld — which he then credits against his income tax due when filing BIR Form 1701Q/1701. Had Skyline instead engaged “Aguirre Structural Design Group, Inc.,” a corporation, for the identical project, the developer would withhold using ATC WC010 at 10% (assuming the firm’s gross income for the year does not exceed ₱720,000) — ₱60,000 withheld on the same ₱600,000 fee, under a corporate ATC rather than the individual one, with no sworn-declaration requirement involved.

Frequently asked questions #

Is an architect’s or engineer’s professional fee subject to expanded withholding tax? #

Yes. Architects and engineers — civil, electrical, chemical, mechanical, structural, industrial, mining, sanitary, metallurgical, and geodetic — are individually named among the professionals whose fees are subject to expanded withholding tax under Section 2.57.2(A) of RR No. 2-98, as amended by RR No. 11-2018. A business that pays an individually licensed architect or engineer for professional services must withhold EWT and issue BIR Form 2307.

What withholding tax rate applies when a client pays an architect or engineer directly? #

An individually licensed architect or engineer is withheld at the same 5%/10% individual professional-fee rate as any other named professional under RR No. 11-2018: 5% (ATC WI010) if the professional’s gross income for the current year does not exceed ₱3,000,000 and a sworn declaration is on file, or 10% (ATC WI011) if it exceeds ₱3,000,000, the professional is VAT-registered, or no valid declaration has been submitted.

Does the rate change if the payment goes to a design or engineering firm instead of the individual professional? #

Yes. If the payee is an architectural, engineering, or design firm organized as a corporation rather than the individual professional, the payment is a professional fee to a corporate or non-individual payee, subject to 10% (ATC WC010) if the firm’s gross income for the current year does not exceed ₱720,000, or 15% (ATC WC011) if it exceeds ₱720,000.

What documents does an architect or engineer need to submit to get the lower 5% rate? #

An individual architect or engineer claims the lower 5% rate by submitting an Income Payee’s Sworn Declaration of Gross Receipts/Sales (Annex B-1 for a single payor or Annex B-2 when income is split across multiple payors), together with a copy of their BIR Certificate of Registration, to each business that pays them, before the first payment of the year or at the start of the engagement.

Does a homeowner paying an architect for a personal house design need to withhold tax? #

No. Expanded withholding tax applies only when the payor is itself engaged in business or the practice of a profession — a company, corporation, sole proprietorship, or self-employed individual paying in the course of business. An individual homeowner paying an architect to design their own private residence is not a withholding agent and does not withhold or issue BIR Form 2307.

Summary #

Architects and engineers across every named discipline — civil, electrical, chemical, mechanical, structural, industrial, mining, sanitary, metallurgical, and geodetic — sit inside the RR No. 11-2018 individual professional-fee withholding bracket, the same one that covers doctors and lawyers. The payee’s legal form, not which engineering discipline is involved, decides which bracket applies: an individual professional is withheld at 5%/10% (ATC WI010/WI011) once a sworn declaration is on file, while a design or engineering firm organized as a corporation is withheld at 10%/15% (ATC WC010/WC011) based on its own gross income threshold. Only a business or professional payor triggers the obligation — a homeowner’s personal residential project does not. For the general professional-fee mechanics this scenario builds on, see BIR Form 2307 for Professional Fees, and for the closely parallel individual-vs-clinic structure in another PRC-licensed profession, see BIR Form 2307 for Veterinary Clinics and Animal Health Service Providers.