BIR Form 2307 for Ice Plant and Cold Storage Service Fees

A fish, meat, or produce trader that pays an ice plant for block or crushed ice, or a cold storage facility for freezer and chiller space, is a withholding agent under RR No. 2-98 and generally withholds 2% expanded withholding tax (EWT) on the fee, issuing BIR Form 2307. The rate sits in the same general business-services bracket this series covers for pest control, hauling, and similar recurring contractor payments — not the higher professional-fee brackets, and not automatically the lease-of-real-property rate either.

This guide is part of the BIR Form 2307 series. It covers who withholds on an ice plant or cold storage payment, the applicable ATC codes, how to tell a storage service from an actual space lease, and a worked wet-market trader example.

Who withholds on an ice plant or cold storage payment? #

The same payor-status test this series applies to every business-service supplier decides who withholds here: a corporation or business-connected individual withholds, a private retail buyer 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 wet-market fish trader paying an ice plant for daily block ice to keep its stock fresh, or a frozen-goods distributor paying a cold storage warehouse for chiller space, is a withholding agent under clause (A) or (B). A household buying a single bag of ice for a family gathering falls outside the rule entirely — there’s no trade or business behind that purchase.

What EWT rate applies? #

Ice production and cold storage services are not named as their own line item in RR No. 2-98 — both fall under the same flat 2% general contractor/business-services catch-all covered in BIR Form 2307 for Contractors and Subcontractors, the same bracket this series applies to pest control and waste hauling in BIR Form 2307 for Pest Control and Waste Hauling Services.

Storage service or space lease — which bracket actually applies? #

Most cold storage arrangements are billed as a preservation service, not a lease, which keeps them in the 2% bracket rather than the 5% lease-of-real-property rate. A cold storage operator that runs its own refrigeration equipment, handles stock rotation, and keeps overall control of the warehouse floor is providing a service to multiple clients sharing the facility — the client never gets exclusive possession of a defined space. Where a contract instead hands the client exclusive, lockable possession of a specifically identified cold room or locker for a fixed term, the arrangement looks more like a real property lease and should be withheld at 5% instead, the same rate covered in Withholding Tax on Rent for BIR Form 2307. Read the actual contract terms — exclusivity of possession, not the invoice’s label — before choosing the rate.

Worked example: a wet-market fish trader’s ice and storage contract #

Bantay Bay Fish Traders, a sole proprietorship registered as a business, buys 50 blocks of ice daily from Coldline Ice & Cold Storage Corp. at ₱150 per block, and separately pays Coldline ₱18,000 a month for shared chiller space to store unsold stock overnight.

Bantay Bay withholds ₱4,860 each month, remits it through BIR Form 0619-E monthly and BIR Form 1601-EQ quarterly, and issues Coldline a BIR Form 2307 each quarter showing the cumulative ice and storage fees paid under ATC WC120. If Coldline instead ran as a sole proprietorship rather than a corporation, the rate and ATC code stay the same — ATC WI120 — since the general contractor bracket does not split individual and corporate payees into different rates the way the professional-fee bracket does.

Frequently asked questions #

Does a fish or meat trader have to withhold tax when paying an ice plant or cold storage facility? #

Yes, if the trader is a corporation or a business-registered individual. A trader paying an ice plant for block ice or a cold storage facility for freezer/chiller space 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 ice plant and cold storage fees? #

Ice production and cold storage rental fees are not named as their own separate line items in RR No. 2-98 — both fall under the same flat 2% general contractor/business-services bracket under Section 2.57.2(E), as amended by RR No. 11-2018 — ATC WI120 for an individually run ice plant or cold storage operator, or WC120 for one organized as a corporation.

Does it matter if the ice plant also sells ice at retail to walk-in customers? #

No for the retail side’s withholding exposure, but yes for who withholds. A retail customer buying a bag of ice for personal use has no trade or business behind the purchase and is not a withholding agent, so no BIR Form 2307 applies there. A business customer — a fish vendor, a catering company, a sari-sari store buying ice in bulk for resale — is a withholding agent on its own purchase under the same rule covered in this series.

Is cold storage space rental withheld as a lease (5%) instead of a service fee (2%)? #

Generally no. A cold storage arrangement is typically structured and billed as a storage and preservation service — the facility operates the refrigeration, handles stock rotation, and retains control of the space — rather than a lease of a specifically identified unit to the client’s exclusive possession. Where a contract genuinely transfers exclusive possession of a specific storage unit to the client for a fixed rental fee, it should instead be withheld as a lease of real property at 5% under RR No. 11-2018 — review the actual contract terms, not just its label, to determine which bracket applies.

Does the ice plant’s own VAT-exempt or non-VAT status change the EWT rate? #

No. Whether the ice plant or cold storage operator is VAT-registered, non-VAT, or exempt affects its own output VAT exposure, not the 2% EWT rate the paying business withholds under ATC WI120/WC120 — the professional-fee brackets elsewhere in this series carry a VAT-status test, but the general contractor/business-services bracket does not.

Summary #

Ice plant and cold storage service fees sit in the flat 2% general business-services bracket (ATC WI120/WC120) under RR No. 2-98, Section 2.57.2(E) — the same bracket covering pest control, waste hauling, and similar recurring contractor payments. The 2% rate applies whether the operator is an individual or a corporation, and regardless of the operator’s own VAT status; the only real fork in the road is whether the arrangement is genuinely a space lease (5%) rather than a storage service (2%), which turns on whether the client gets exclusive possession of a defined space. See BIR Form 2307 for Contractors and Subcontractors for the general 2% bracket this rate draws from, and BIR Form 2307 for Pest Control and Waste Hauling Services for a closely related recurring-service scenario in the same bracket.