BIR Form 2307 for Market Research and Survey Firms: Consultant Fee or Contractor Rate?

A business that pays an individual freelance market researcher directly generally withholds 5% or 10% under the management/technical consultant bracket of RR No. 11-2018, while a business that engages a market research or survey company generally withholds 2% under the flat general contractor rate — the same individual-versus-firm distinction this series already applies to freelance IT consultants versus outsourcing companies.

This guide is part of the BIR Form 2307 series. It covers which rate applies to an individual researcher versus a research firm, the ATC codes for each, and a worked corporate market study example.

Who withholds on a market research or survey engagement? #

The same payor-status test this series applies to every service payment decides the outcome: 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 consumer goods company, ad agency, or retailer commissioning a market study is a withholding agent under clause (A) or (B) of this rule, regardless of whether it hires an individual consultant or a full research company to do the work.

Individual researcher vs. research firm: which rate applies? #

The rate depends on whether the client is paying an individually engaged professional or a business organized to provide the service. RR No. 11-2018 places individuals “engaged in the practice of professions or callings” — a list that extends beyond named professions like law and accounting to management and technical consultants performing analytical or advisory work — in the professional-fee bracket. A market research or survey company, by contrast, is generally a general business-services provider rather than an individually licensed professional, placing it in the same 2% contractor bracket this series already applies in BIR Form 2307 for Software Developers and IT Consultants for the analogous individual-freelancer-vs-outsourcing-company split.

Worked example: a consumer goods company’s product study #

Bantay Konsyumer Products Inc. commissions InsightWorks Research Solutions Inc., a market research company, to conduct a ₱350,000 nationwide product-perception survey.

Because InsightWorks operates as a general market research business rather than a registered professional/technical consultancy, Bantay Konsyumer withholds at the 2% contractor rate, remits the ₱7,000 EWT through BIR Form 0619-E monthly and BIR Form 1601-EQ quarterly, and issues InsightWorks a BIR Form 2307 for the period. If Bantay Konsyumer had instead hired an individual freelance researcher directly for the same ₱350,000 project, the applicable rate would be 5% (₱17,500 EWT) under the individual professional-fee bracket, assuming the researcher’s cumulative income from that client stays under ₱3,000,000 for the year.

Frequently asked questions #

Does a company have to withhold tax when paying a market research or survey firm? #

Yes, if the company paying the firm is a corporation or a business-registered individual. Under RR No. 2-98, Section 2.57.3(A)-(B), any juridical person or business-connected individual that pays a market research or survey provider for a study is a withholding agent and must withhold expanded withholding tax and issue BIR Form 2307.

What withholding rate applies to an individual freelance market researcher? #

An individual engaged directly as a market research consultant, analyst, or survey specialist generally falls under the management/technical consultant category of the professional-fee bracket under RR No. 11-2018 — 5% if the researcher’s cumulative gross income from that client for the year has not exceeded ₱3,000,000, or 10% once it has, under ATC WI010/WI011.

What withholding rate applies to a market research company or agency? #

A market research or survey company organized as a business, rather than an individually engaged professional, is generally withheld at the flat 2% general contractor/business-services rate under RR No. 2-98, Section 2.57.2(E), ATC WC120 — the same rate this series applies to a software development or IT outsourcing company for the same individual-vs-firm reason.

Does the withholding rate change if the research firm is organized as a corporate professional consultancy rather than a general services company? #

It can. A firm specifically organized and registered to render management or technical consultancy as its professional service, rather than as a general contracting or outsourcing business, may fall under the 10%/15% corporate professional-fee bracket instead of the flat 2% rate. The correct classification depends on how the firm is actually registered and how its invoice describes the engagement, which is why this determination is worth confirming with the payee directly.

Is fieldwork data collection (interviewers, enumerators) withheld the same way as the research firm’s analysis fee? #

Generally yes, when the fieldwork is billed as part of the research firm’s own consolidated project fee to the client. The client withholds on what it pays the research firm as a whole; how the research firm in turn compensates its own fieldwork staff, whether as employees or subcontracted individuals, is a separate withholding relationship between the firm and its own workers.

Summary #

A market research or survey company organized as a general business is withheld at the flat 2% contractor rate (ATC WC120) under RR No. 2-98, Section 2.57.2(E), while an individually engaged freelance researcher instead falls under the 5%/10% management/technical consultant professional-fee bracket under RR No. 11-2018 — the same individual-versus-firm distinction this series applies to software developers and IT consultants. See BIR Form 2307 for Software Developers and IT Consultants for the closely analogous classification logic and BIR Form 2307 for Professional Fees for the general individual professional-fee bracket this rate draws from.