BIR Form 2307 for Environmental Consultants and EIA Preparers: Which Withholding Rate Applies

A business that pays an individually licensed environmental engineer or environmental planner directly to prepare an Environmental Impact Assessment (EIA) generally withholds 5% or 10% under the individual professional-fee bracket, while a business that engages an environmental consulting company for the same work generally withholds 2% under the flat general contractor rate — the same individual-versus-firm distinction this series already applies to architects and engineers, and to IT consultants.

This guide is part of the BIR Form 2307 series. It covers which rate applies to an individual environmental professional versus a consulting firm, the ATC codes for each, and a worked EIA-engagement example.

Who withholds on an environmental consulting or EIA engagement? #

The same payor-status test this series applies to every service payment decides the outcome: 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 mining company, real estate developer, manufacturing plant, or infrastructure proponent that engages an environmental consultant to prepare the EIA required for its Environmental Compliance Certificate under the Philippine EIS System is a withholding agent under clause (A) or (B).

Individual environmental professional vs. consulting firm: which rate applies? #

The rate turns on whether the payee is an individually engaged, PRC-licensed professional or a business organized to provide the service — the same distinction already applied to architects and engineers in this series. RR No. 11-2018 places individuals “engaged in the practice of professions or callings” — a list that includes civil, chemical, mechanical, sanitary, mining, and other named engineering disciplines, alongside professional appraisers and consultants — in the 5%/10% professional-fee bracket, the same bracket covered in BIR Form 2307 for Architects and Engineers. An environmental consulting company, by contrast, is generally a general business-services provider, placing it in the flat 2% contractor bracket, the same split this series applies in BIR Form 2307 for Software Developers and IT Consultants.

Worked example: a mining company’s EIA engagement #

Minahan Extractive Resources Corp. engages GreenPath Environmental Consulting Inc., an environmental consulting company, to prepare the EIA supporting its Environmental Compliance Certificate application, for a ₱1,200,000 project fee.

Because GreenPath operates as a general environmental consulting business rather than a registered professional partnership, Minahan withholds at the 2% contractor rate, remits the ₱24,000 EWT through BIR Form 0619-E monthly and BIR Form 1601-EQ quarterly, and issues GreenPath a BIR Form 2307 for the period. If Minahan had instead engaged an individually licensed sanitary engineer directly for the same ₱1,200,000 scope of work, the applicable rate would be 5% (₱60,000 EWT) under the individual professional-fee bracket, since ₱1,200,000 stays below the ₱3,000,000 cumulative threshold that would push the rate to 10%.

Frequently asked questions #

Does a company have to withhold tax when paying an environmental consultant to prepare an Environmental Impact Assessment? #

Yes, if the company paying the consultant is a corporation or a business-registered individual. Under RR No. 2-98, Section 2.57.3(A)-(B), any juridical person or business-connected individual that pays an environmental consultant for an Environmental Impact Assessment (EIA) or similar study is a withholding agent and must withhold expanded withholding tax and issue BIR Form 2307.

What withholding rate applies to an individually licensed environmental engineer or planner? #

An individual PRC-licensed professional preparing an EIA — such as a civil, chemical, sanitary, or mining engineer, or a licensed environmental planner engaged directly by the project proponent — generally falls under the 5%/10% individual professional-fee bracket under RR No. 11-2018, ATC WI010/WI011, the same bracket named engineers already draw from elsewhere in this series.

What withholding rate applies to an environmental consulting company? #

An environmental consulting company organized as a business, rather than an individually engaged licensed professional, is generally withheld at the flat 2% general contractor/business-services rate under RR No. 2-98, Section 2.57.2(E), ATC WC120 — unless it is specifically organized and registered as a professional partnership, in which case the corporate professional-fee bracket may apply instead.

Does the EIA requirement itself under the Philippine Environmental Impact Statement System affect the withholding treatment? #

No. The Philippine EIS System under Presidential Decree No. 1586 determines when a project needs an Environmental Compliance Certificate and an accompanying EIA, but it does not change how the consultant’s fee is withheld. The withholding classification still turns on whether the payee is an individually engaged licensed professional or a business entity, the same test applied to every other professional-versus-firm scenario in this series.

Does a project proponent withhold separately on multiple specialists contributing to one EIA (air quality, hydrology, biodiversity)? #

It depends on how the engagement is structured. If the proponent contracts a single environmental consulting firm that in turn subcontracts individual specialists, the proponent withholds only on what it pays the firm as a whole. If the proponent instead engages each individual specialist directly under separate contracts, it withholds separately on each one at the applicable individual professional-fee rate.

Summary #

An individually engaged, PRC-licensed environmental engineer or planner preparing an EIA falls under the 5%/10% individual professional-fee bracket (ATC WI010/WI011) under RR No. 11-2018, while an environmental consulting company handling the same engagement generally falls under the flat 2% contractor bracket (ATC WC120) under RR No. 2-98, Section 2.57.2(E). See BIR Form 2307 for Architects and Engineers for the closely analogous individual-professional classification and BIR Form 2307 for Software Developers and IT Consultants for the same individual-versus-firm logic applied to a different service.