BIR Form 2307 for Environmental Consulting and EIA Preparation Firms

A company that pays an environmental consulting firm to prepare an Environmental Impact Assessment (EIA) or handle ongoing environmental compliance monitoring withholds 2% expanded withholding tax (EWT) under RR No. 2-98, Section 2.57.2(E), and issues BIR Form 2307 — not the higher 5%/10% rate reserved for professions individually named in the regulation, such as engineers and architects.

This guide is part of the BIR Form 2307 series. It covers who withholds on an environmental consulting payment, why the discipline sits outside the named-professional bracket, how a separately billed engineer’s fee changes the picture, and a worked EIA project example.

Who withholds on an environmental consulting 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 property developer paying an environmental consulting firm to prepare the EIA required for a Department of Environment and Natural Resources (DENR) Environmental Compliance Certificate, or a manufacturing plant paying for ongoing environmental compliance monitoring, is a withholding agent under clause (A) or (B).

Why environmental consultants aren’t in the 5%/10% named-professional list #

Architects and a long list of engineering disciplines are individually named in RR No. 2-98’s professional-fee enumeration under Section 2.57.2(A), as amended by RR No. 11-2018 — the same clause covering lawyers, CPAs, and doctors of medicine, as this series covers in BIR Form 2307 for Architects and Engineers. That enumeration reads:

“…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

Environmental consulting as a discipline is not part of that named list, so a firm providing EIA preparation or compliance monitoring services falls instead under the flat 2% general contractor/business-services catch-all covered in BIR Form 2307 for Contractors and Subcontractors.

If an EIA project team includes a PRC-licensed engineer or geologist who separately bills their own individual professional fee, that professional’s own fee can fall under the 5%/10% bracket in their personal capacity. The consulting firm’s overall project fee, billed as a single corporate service engagement, generally remains under the 2% bracket.

Worked example: an EIA preparation project #

GreenPath Environmental Consultants Corp. prepares a full Environmental Impact Assessment for a resort developer, billed in two milestones.

The developer withholds 2% on each milestone as it is billed and issues GreenPath a BIR Form 2307 for the quarter covering both milestones, ATC WC120 — the same general business-services rate that applies regardless of the specific technical discipline involved, since environmental consulting sits outside the named-professional enumeration.

Frequently asked questions #

Does a business have to withhold tax when paying an environmental consulting firm? #

Yes, if the payor is a corporation or a business-registered individual. A company engaging an environmental consulting firm to prepare an Environmental Impact Assessment (EIA) or handle environmental compliance monitoring 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 environmental consulting fees? #

Environmental consulting and EIA preparation fees 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 consultant or WC120 for one organized as a corporation.

Why aren’t environmental consultants withheld at the same 5%/10% rate as engineers? #

RR No. 2-98’s professional-fee enumeration under Section 2.57.2(A), as amended by RR No. 11-2018, individually names specific professions — lawyers, CPAs, engineers, architects, and similar licensed practitioners. Environmental consulting as a discipline is not part of that named list, so a firm providing environmental consulting services generally withholds instead at the flat 2% general business-services rate.

Does the rate change if the project team includes a PRC-licensed engineer or geologist? #

It can, for that individual’s own separately billed professional fee. If an engineer or another individually named professional under Section 2.57.2(A) bills their own professional fee directly and separately from the consulting firm’s project fee, that individual’s fee can fall under the 5%/10% bracket. The consulting firm’s own overall project fee, billed as a corporate service, generally remains under the 2% bracket.

Does a one-time EIA project get withheld differently from an ongoing environmental compliance monitoring retainer? #

No, both are withheld the same way. Whether billed as a single EIA preparation project or a recurring monthly compliance monitoring retainer, the fee is a 2% withholdable service payment. On a recurring retainer, each period’s fee is withheld as it is paid, accrued, or invoiced under RR No. 2-98, Section 2.57.4.

Summary #

Environmental consulting and EIA preparation fees sit in the flat 2% general business-services bracket (ATC WI120/WC120) under RR No. 2-98, Section 2.57.2(E), because the discipline is not part of the named-professional enumeration under Section 2.57.2(A) that covers engineers and architects. See BIR Form 2307 for Architects and Engineers for the named-professional comparison, and BIR Form 2307 for Contractors and Subcontractors for the general 2% bracket this rate draws from.