BIR Form 2307 for Interior Designers and Landscape Architects: Not the Same Bracket as Architects

A property developer, business, or corporation that pays an interior designer or landscape architect for design services generally withholds 2% expanded withholding tax (EWT) under RR No. 2-98, Section 2.57.2(E), and issues BIR Form 2307 — a different bracket than the 5%/10% rate this series covers for architects and engineers, because interior designers and landscape architects are not individually named in the same professional-fee enumeration.

This guide is part of the BIR Form 2307 series. It covers who withholds on an interior design or landscape architecture fee, why the rate differs from architects and engineers, the ATC codes involved, and a worked commercial fit-out example.

Who withholds on an interior design or landscape architecture fee? #

The same payor-status test applies here as everywhere else in this series: 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 property developer paying an interior designer to fit out a commercial condo unit’s model showroom, or a hotel chain paying a landscape architect to design its resort grounds, is a withholding agent under clause (A) or (B). A homeowner paying an interior designer to furnish and style their own private residence falls outside the rule.

Why interior designers and landscape architects aren’t in the same bracket as architects #

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 — but interior designers and landscape architects are not part of that same named list, as this series covers in BIR Form 2307 for Architects and Engineers. Because they fall outside that specific enumeration, a business paying an interior designer or landscape architect commonly withholds instead at the flat 2% general contractor/business-services rate under Section 2.57.2(E), the same catch-all this series covers in BIR Form 2307 for Contractors and Subcontractors, rather than the 5%/10% named-professional bracket.

Because this distinction isn’t always obvious to either party, a business should confirm with its interior designer or landscape architect which rate and ATC the engagement falls under before the first payment. Applying the wrong bracket in either direction results in an incorrect BIR Form 2307 that both the payor and the payee then have to correct.

What ATC code applies? #

There is a second, independent route to the same 2% figure: if the paying company is a classified Top Withholding Agent, its local purchases of design services not otherwise assigned a more specific rate are withheld at 2% under the TWA services rule covered in BIR Form 2307 for Purchases of Services: Top Withholding Agent 2% Rate Explained, using ATC WI160/WC160 instead.

Worked example: a commercial fit-out project #

A property developer engages Studio Verde Design Corp., an interior design and landscape architecture firm, for a ₱500,000 fit-out and grounds design package for a new commercial building’s lobby and courtyard.

The developer withholds ₱10,000 — 2% of the ₱500,000 design fee — and remits it through BIR Form 0619-E monthly and BIR Form 1601-EQ quarterly, lists Studio Verde Design Corp. on its Quarterly Alphalist of Payees, and issues a BIR Form 2307 showing ₱500,000 as the income payment, ATC WC120, and ₱10,000 tax withheld. Had the developer instead engaged an individually licensed architect for a comparable structural design scope on the same project, that portion of the engagement would be withheld separately under the architect’s own 5%/10% bracket instead.

Frequently asked questions #

Does a client have to withhold tax when paying an interior designer or landscape architect? #

Yes, if the client is a corporation or a business-registered individual. A property developer, business owner, or corporation paying an interior designer or landscape architect for design services 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.

Are interior designers and landscape architects withheld at the same 5%/10% rate as architects? #

Generally no. Architects and a long list of engineering disciplines are individually named in Section 2.57.2(A)’s professional-fee enumeration under RR No. 11-2018, which puts them in the 5%/10% individual professional-fee bracket. Interior designers and landscape architects are not named in that same enumeration, so practitioners commonly withhold their fees instead at the flat 2% general business-services rate.

What ATC code applies to an interior designer’s or landscape architect’s fee? #

Since interior design and landscape architecture services generally fall under the general contractor/business-services bracket rather than the named-professional bracket, ATC WI120 applies to an individually practicing designer and WC120 to a design firm organized as a corporation, both at 2%.

Does a homeowner paying an interior designer for a personal home need to withhold tax? #

No. Under RR No. 2-98, Section 2.57.3(B), withholding applies only to payments connected to a trade or business. A homeowner paying an interior designer or landscape architect to design their own private residence is not a withholding agent and does not withhold or issue BIR Form 2307.

Should a business double-check with its interior designer which rate they expect withheld? #

Yes. Because interior design and landscape architecture sit in a less clearly enumerated category than architecture or engineering, a business should confirm with its designer, and if needed its own tax adviser, which ATC and rate the engagement falls under before the first payment — misapplying the 5%/10% professional-fee bracket instead of the 2% general-services bracket (or vice versa) results in an incorrect BIR Form 2307 that both parties then have to correct.

Summary #

Interior designers and landscape architects fall outside the same 5%/10% named-professional bracket that covers architects and engineers under RR No. 2-98, Section 2.57.2(A) — a business paying them generally withholds instead at the flat 2% general business-services rate (ATC WI120/WC120) under Section 2.57.2(E). Only a corporate or business-connected payor triggers the obligation; a homeowner’s personal residential project does not. See BIR Form 2307 for Architects and Engineers for the named-professional bracket this post contrasts against, and BIR Form 2307 for Contractors and Subcontractors for the general 2% bracket that applies here instead.