BIR Form 2307 for Armored Car and Cash-in-Transit (CIT) Services

A bank, retailer, or other business that pays an armored car or cash-in-transit (CIT) provider to transport, vault, or process cash withholds 2% expanded withholding tax (EWT) under RR No. 2-98, Section 2.57.2(E), and issues BIR Form 2307 — on the full contracted service fee, since the narrower agency-fee-only rule that applies to private security guard agencies does not extend to CIT providers.

This guide is part of the BIR Form 2307 series. It covers who withholds on an armored car payment, why the withholding base isn’t narrowed the way a security agency’s is, and a worked bank branch cash-pickup contract example.

Who withholds on an armored car or CIT payment? #

The obligation follows the same payor-status test this series applies to every business-service supplier: a corporation or business-connected individual withholds, a private individual generally does not. RR No. 2-98 sets the test this way:

“(A) In general, any juridical person, whether or not engaged in trade or business; (B) An individual, with respect to payments made in connection with his trade or business…”

— RR No. 2-98, Section 2.57.3(A)–(B)

A bank paying an armored car provider for scheduled branch cash pickups and deposits, or a retail chain paying a CIT provider to transport daily sales collections to a vault facility, is a withholding agent under clause (A) or (B).

What EWT rate applies, and why the base isn’t narrowed like a security agency’s #

Armored car and cash-in-transit services are not named as their own line item in RR No. 2-98 — they fall under the same flat 2% general contractor/business-services catch-all covered in BIR Form 2307 for Contractors and Subcontractors.

This series covers a narrower, agency-fee-only withholding base that applies specifically to private security guard agencies in BIR Form 2307 for Security Agencies: Why EWT Applies Only to the Agency Fee, Not Guards’ Salaries, where the client withholds only on the agency’s own margin because of a mandatory wage-earmarking obligation under RA 5487. That same guide is explicit that this narrower carve-out is specific to security agencies and does not extend to other service providers. An armored car or CIT provider is not a private security agency for this purpose, so a client generally withholds 2% on the full contracted CIT service fee rather than a narrowed margin. The cash the provider transports, vaults, or processes on the client’s behalf remains the client’s own money throughout and is never part of the withholding base — the withholding applies only to what the client pays the provider for the transport and vaulting service itself.

Worked example: a bank’s branch cash-pickup contract #

Coastal Savings Bank Corp. contracts SecureTransit Armored Services Inc. for daily cash pickup and vault delivery across 15 branches, billed as a fixed monthly service fee.

Coastal Savings withholds ₱3,600 each month on SecureTransit’s service fee alone — never on the actual cash volumes moved, which remain the bank’s own funds — and issues SecureTransit a BIR Form 2307 each quarter summarizing the cumulative fees and EWT, ATC WC120.

Frequently asked questions #

Does a business have to withhold tax when paying an armored car or cash-in-transit provider? #

Yes, if the payor is a corporation or a business-registered individual. A bank or retailer paying an armored car or cash-in-transit (CIT) provider to transport, vault, or process cash is a withholding agent under RR No. 2-98, Section 2.57.3(A)-(B), and must withhold expanded withholding tax and issue BIR Form 2307.

What withholding tax rate applies to armored car and cash-in-transit fees? #

Armored car and cash-in-transit services generally fall under the 2% general contractor/business-services bracket under RR No. 2-98, Section 2.57.2(E), as amended by RR No. 11-2018 — ATC WI120 for an individually run provider or WC120 for one organized as a corporation.

Is the withholding base narrowed to just the provider’s fee, the way it is for security guard agencies? #

No. The narrower agency-fee-only withholding base under RMC No. 39-2007 applies specifically to private security agencies because of a mandatory wage-earmarking obligation under RA 5487. Armored car and cash-in-transit providers are not private security agencies for that purpose, so the client generally withholds 2% on the full contracted service fee billed.

Does the cash a CIT provider transports and vaults ever count as part of the withholding base? #

No. The client’s own cash that an armored car provider transports, vaults, or processes belongs to the client throughout — it is never the provider’s income and is never part of the withholding base. Only the provider’s own service fee for transport, vaulting, or cash processing is withholdable.

How is withholding computed on a recurring branch cash-pickup contract? #

Withholding follows whichever happens first each period — payment, the expense being booked in the payor’s records, or the invoice date — under RR No. 2-98, Section 2.57.4. For a recurring monthly branch cash-pickup contract, each month’s service fee is withheld as it’s paid, accrued, or invoiced, not accumulated and withheld once at year-end.

Summary #

Armored car and cash-in-transit services sit in the flat 2% general business-services bracket (ATC WI120/WC120) under RR No. 2-98, Section 2.57.2(E), withheld on the full contracted service fee — the narrower agency-fee-only base that applies to security guard agencies under RMC No. 39-2007 does not extend to CIT providers. See BIR Form 2307 for Security Agencies for that narrower rule, and BIR Form 2307 for Contractors and Subcontractors for the general 2% bracket this rate draws from.