BIR Form 2307 for CCTV, Alarm, and Security System Installation and Monitoring Companies
A business that pays a CCTV, alarm, or security-system installation and monitoring company — whether for a one-time installation job or an ongoing monitoring subscription — withholds 2% expanded withholding tax (EWT) under RR No. 2-98, Section 2.57.2(E), as amended by RR No. 11-2018, and issues BIR Form 2307. The same 2% rate covers both the labor to install the system and the recurring fee to monitor it, but a straight purchase of the hardware itself is treated differently.
This guide is part of the BIR Form 2307 series. It covers who withholds on security-system payments, why installation and monitoring both land at 2%, how that differs from simply buying the equipment, and a worked building installation-plus-monitoring example.
Generate Your Security Vendor's BIR Form 2307 FREE →Who withholds on a CCTV or alarm company 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 homeowner 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 commercial building owner, a retail chain, or a homeowners’ association paying a security-systems company to install CCTV coverage or to monitor an alarm system is a withholding agent under clause (A) or (B). A homeowner paying the same company to install or monitor a home alarm system purely for personal, non-business use falls outside the rule.
Installation job or monitoring subscription — both land at 2% #
A one-time CCTV or alarm installation job and a recurring monthly monitoring subscription are different services with different billing patterns, but both are currently withheld at the same 2% rate. Installation is contractor labor — wiring, mounting cameras, configuring a control panel — and falls under the general 2% contractor/business-services bracket the same way the work covered in BIR Form 2307 for Contractors and Subcontractors does. Monitoring is a recurring service fee for watching camera feeds or responding to alarm signals, and it reaches the same 2% bracket independently, because security-system monitoring is not among the professions individually enumerated at the higher professional-fee rates in RR No. 2-98’s Section 2.57.2(A) — it falls into the same general catch-all this site has already covered for IT Equipment Repair and Maintenance Contracts and Landscaping and Grounds Maintenance Contractors.
| Payee | Service type | ATC | Rate |
|---|---|---|---|
| Security-systems company, individually owned | One-time installation labor | WI120 | 2% |
| Security-systems company, individually owned | Recurring monitoring subscription | WI120 | 2% |
| Security-systems company, organized as a corporation | One-time installation labor | WC120 | 2% |
| Security-systems company, organized as a corporation | Recurring monitoring subscription | WC120 | 2% |
The billing frequency changes how often a withholding agent files, not the rate it applies — a one-time installation invoice and twelve monthly monitoring invoices from the same vendor across a year are all withheld at 2%, reported cumulatively on that vendor’s quarterly BIR Form 2307.
Why a straight hardware purchase is different #
Buying CCTV cameras, alarm sensors, or a control panel outright as goods — without an accompanying installation or monitoring service — is not the same transaction as hiring a security company’s labor, and it generally is not subject to expanded withholding tax. A plain goods purchase from a business that is not a BIR-designated Top Withholding Agent (TWA) typically carries no EWT at all. If the buyer itself is a BIR-designated TWA, that purchase of goods is instead withheld at 1%, separately from the 2% service bracket that applies to installation and monitoring labor.
In practice, most security-system invoices bundle hardware and installation labor into a single service contract rather than billing the hardware as a separate goods sale, so the 2% service rate typically applies to the full invoice. A business should only split out a 1% goods-purchase line when the vendor’s billing genuinely separates equipment cost from labor and the buyer is itself a TWA — otherwise, treating the whole engagement as a 2% service payment is the simpler and more defensible approach.
Worked example: a building’s CCTV installation plus monthly monitoring #
Meridian Tower Property Management Corp. hires SecureWatch Systems Inc. for a one-time CCTV installation across its building lobby and parking levels, billed at ₱120,000, plus an ongoing alarm-monitoring subscription billed at ₱6,000 per month.
| Item | Amount | EWT withheld (2%, ATC WC120) |
|---|---|---|
| One-time CCTV installation (VAT-exclusive) | ₱120,000.00 | ₱2,400.00 |
| Monthly alarm-monitoring subscription (VAT-exclusive) | ₱6,000.00 | ₱120.00 |
Meridian withholds ₱2,400 when it books or pays the installation invoice, and withholds ₱120 each month as the monitoring subscription is invoiced — whichever of payment, booking the expense, or the invoice date comes first, under RR No. 2-98, Section 2.57.4. By quarter-end, Meridian issues SecureWatch a single BIR Form 2307 summarizing the cumulative payments (installation plus three months of monitoring) and the total EWT withheld, all coded ATC WC120.
Frequently asked questions #
Does a business have to withhold tax when paying a CCTV or alarm installation company? #
Yes, if the payor is a corporation or a business-registered individual. A company paying a CCTV, alarm, or security-system installation and monitoring company for installation labor or a monitoring subscription 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 CCTV and alarm installation services? #
CCTV, alarm, and security-system installation and monitoring 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 installer or WC120 for one organized as a corporation.
Is a recurring alarm-monitoring subscription withheld the same way as a one-time installation job? #
Yes. Both the one-time labor for installing a CCTV or alarm system and the recurring monthly fee for monitoring that system are service payments falling under the same 2% general-services bracket under RR No. 2-98, Section 2.57.2(E) — the recurring fee is simply withheld again each period it’s paid, accrued, or invoiced, rather than withheld once at year-end.
Does withholding apply if a business just buys security cameras or alarm hardware outright? #
Generally no. A straight purchase of security hardware — cameras, sensors, control panels — as goods rather than as part of an installation or monitoring service contract is not subject to expanded withholding tax unless the buyer is a BIR-designated Top Withholding Agent (TWA), in which case a 1% rate applies to that goods purchase. A business that is not a TWA ordinarily does not withhold on a plain hardware purchase.
Does a homeowner who hires a company to install a home alarm system need to withhold tax? #
No. A private individual who is not engaged in trade or business and pays a security-system company to install or monitor a home alarm system for personal use is not a withholding agent under RR No. 2-98, Section 2.57.3(B), and does not withhold tax or issue BIR Form 2307.
Summary #
CCTV, alarm, and security-system companies sit in the flat 2% general business-services bracket (ATC WI120/WC120) under RR No. 2-98, Section 2.57.2(E), as amended by RR No. 11-2018 — covering both a one-time installation job and a recurring monthly monitoring subscription, though a straight hardware purchase from a non-TWA business is typically outside EWT altogether. See BIR Form 2307 for IT Equipment Repair and Maintenance Contracts and BIR Form 2307 for Landscaping and Grounds Maintenance Contractors for other services that land in this same 2% bracket for similar reasons.