BIR Form 2307 for Landscaping and Grounds Maintenance Contractors

A business that pays a landscaping or grounds maintenance contractor — for recurring gardening, lawn care, or general grounds upkeep — withholds 2% expanded withholding tax (EWT) under RR No. 2-98, Section 2.57.2(E), and issues BIR Form 2307, the same rate that applies to a landscape architect’s design fee, even though the two are different services reaching that rate for different reasons.

This guide is part of the BIR Form 2307 series. It covers who withholds on a landscaping or grounds maintenance payment, why maintenance work and design fees land at the same rate, and a worked commercial-property maintenance contract example.

Who withholds on a landscaping or grounds maintenance 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 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 commercial property manager paying a landscaping contractor for recurring lawn care and garden upkeep across a business park, or a hotel paying for grounds maintenance around its property, is a withholding agent under clause (A) or (B). A homeowner paying a gardener to tend their own private garden falls outside the rule.

Same 2% rate as a landscape architect, for a different reason #

Grounds maintenance labor and landscape design are different services, but they currently land on the same 2% EWT rate. This series covers the design side in BIR Form 2307 for Interior Designers and Landscape Architects: Not the Same Bracket as Architects, which explains that landscape architecture is not among the professions individually named in RR No. 2-98’s Section 2.57.2(A) enumeration, so a landscape architect’s design fee falls under the general 2% catch-all rather than the 5%/10% professional-fee bracket. Ongoing gardening and grounds maintenance work reaches the same 2% rate independently, simply as general contractor labor under BIR Form 2307 for Contractors and Subcontractors — the two services arrive at the identical rate through different reasoning, not because they’re treated as the same type of work.

A homeowners’ association or condominium corporation withholds on its grounds maintenance contractor the same way any other juridical person does, regardless of its VAT-exempt dues status, the same principle this series covers for HOA contractor payments generally in Does an HOA or Condo Corporation Need to Withhold Tax on Contractor Payments?

Worked example: a business park’s grounds maintenance contract #

Emerald Business Park Management Corp. contracts GreenScape Maintenance Services Inc. for monthly grounds and landscaping upkeep across its 12-hectare property.

Emerald withholds ₱1,300 each month as the invoice is booked and issues GreenScape a BIR Form 2307 each quarter summarizing the cumulative maintenance fees and total EWT, ATC WC120 — the same treatment it would apply if it instead engaged a landscape architect for a one-time redesign project.

Frequently asked questions #

Does a business have to withhold tax when paying a landscaping or grounds maintenance contractor? #

Yes, if the payor is a corporation or a business-registered individual. A company paying a landscaping or grounds maintenance contractor for gardening, lawn care, or grounds upkeep 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 landscaping and grounds maintenance fees? #

Landscaping and grounds maintenance services 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 contractor or WC120 for one organized as a corporation.

Is a grounds maintenance contract withheld differently from a landscape architect’s design fee? #

No, both currently withhold at the same 2% rate, though for different reasons. A landscape architect’s design fee falls under the 2% bracket because landscape architecture is not among the professions individually named in RR No. 2-98’s Section 2.57.2(A) enumeration. Grounds maintenance work is simply general contractor labor, which independently falls under the same 2% catch-all.

Does a homeowners’ association withhold on its landscaping contractor the same way a corporation does? #

Yes. A homeowners’ association or condominium corporation is a juridical person under RR No. 2-98, Section 2.57.3(A), regardless of its VAT-exempt dues status, and must withhold on payments to its landscaping or grounds maintenance contractor the same way any other corporation does.

How is withholding computed on a recurring monthly grounds maintenance contract? #

Withholding follows whichever happens first each period — payment, the expense being booked in the payor’s records, or the invoice date — under RR No. 2-98, Section 2.57.4. For a recurring monthly grounds maintenance contract, each month’s fee is withheld as it’s paid, accrued, or invoiced, not accumulated and withheld once at year-end.

Summary #

Landscaping and grounds maintenance work sits in the flat 2% general business-services bracket (ATC WI120/WC120) under RR No. 2-98, Section 2.57.2(E) — the same rate as a landscape architect’s design fee, reached through different reasoning. See BIR Form 2307 for Interior Designers and Landscape Architects for the design-fee comparison, and BIR Form 2307 for Contractors and Subcontractors for the general 2% bracket this rate draws from.