BIR Form 2307 for Freight Forwarders and Customs Brokers: Which EWT Rate Applies

A licensed customs broker’s professional fee is withheld at 5% or 10%, the same bracket as a CPA or engineer — but a freight forwarding or logistics company’s service fee is withheld at a flat 2%, the contractor rate. The two are easy to lump together because they both show up on the same shipment’s paperwork, but the BIR draws the line at licensing: one is a personally rendered licensed profession, the other is a business service contract.

Why does a customs broker get the professional-fee rate? #

Customs brokers are licensed professionals under the Customs Brokers Act (RA No. 9280), regulated by the Professional Regulation Commission — and RR No. 11-2018 names customs brokers explicitly, alongside insurance, stock, and immigration brokers, in the same category as other licensed professionals subject to expanded withholding tax on professional fees.

The sworn declaration mechanic here is the same one covered in BIR Sworn Declaration for Lower Withholding — a customs broker who wants the 5% rate instead of the default 10% needs the declaration on file at the start of the year, just like any other individual professional payee.

Why does a freight forwarding company get the contractor rate instead? #

A freight forwarding or logistics company isn’t rendering a personally licensed profession — it’s delivering a service under an ordinary business contract, which puts it in the “other contractors” category under RR No. 2-98, Section 2.57.2(E). That provision specifically enumerates the kind of businesses covered:

“Operators of stevedoring, warehousing or forwarding establishments” — listed among “Other contractors” subject to creditable withholding tax under RR No. 2-98’s income payments to certain contractors.

That same contractor category also picks up transportation and common-carrier businesses moving goods by land, air, or water. Payments to a freight forwarding or logistics company fall under the flat 2% contractor rate — the same rate covered generally in BIR Form 2307 for Contractors and Subcontractors — rather than the individual-broker professional-fee bracket.

Side-by-side comparison #

Worked example: one shipment, two invoices #

An importer clears a shipment through a customs brokerage firm and separately pays a freight forwarder for door-to-door delivery.

• Customs brokerage fee: ₱50,000. If the broker filed a sworn declaration and stayed under the ₱3,000,000 threshold, the importer withholds 5% — ₱2,500 — and issues BIR Form 2307 for that amount.
• Freight forwarding fee: ₱120,000. The importer withholds the flat contractor rate of 2% — ₱2,400 — and issues a separate BIR Form 2307 to the forwarding company.

Two different rates on two different services from the same shipment, each documented on its own certificate.

What if the invoice doesn’t separate the two? #

In practice, a single logistics invoice sometimes bundles customs brokerage and forwarding charges together without itemizing them. Where that happens, push the vendor to itemize going forward — under-withholding on a portion that should have been at the higher professional-fee rate is a gap the payor, not the payee, typically has to answer for on audit. If a clean split genuinely isn’t available, apply the rate consistent with whichever service dominates the invoice and correct the classification with the vendor for future billing periods.

Summary #

Customs brokers are licensed professionals withheld at 5%/10% under RR No. 11-2018; freight forwarding and logistics companies are contractors withheld at a flat 2% under RR No. 2-98 Section 2.57.2(E). The two frequently appear on the same shipment’s paperwork, so the practical fix is making sure any combined invoice separates brokerage fees from forwarding charges before you decide which rate to apply.