BIR Form 2307 for Moving Companies: Withholding Tax on Office and Employee Relocation Services

A business that pays a moving or relocation company — for an office relocation, a full corporate move, or an employee’s household-goods relocation tied to a job transfer — generally withholds 2% expanded withholding tax (EWT) on the mover’s invoice as a contractor service under RR No. 2-98. The same flat rate applies whether the job is a single project or a standing arrangement, even when packing materials are billed separately.

This guide is part of the BIR Form 2307 series. It covers who withholds on a moving company payment, why the 2% contractor rate applies to a one-time relocation job, how packing materials and storage-in-transit factor into the withholding base, and a worked office-relocation example.

Who withholds when a business hires a moving company? #

A company relocating its office, or a business paying a mover to relocate a transferred employee’s household goods as part of that employee’s move, is a withholding agent on the payment — the same test this series applies to every business-service supplier. 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 corporation paying a moving company to pack, load, and haul its office equipment and files to a new location withholds under clause (A). A business-registered individual paying the same mover for an equivalent job withholds under clause (B). The trigger is the payor’s trade-or-business connection, not the size of the job or whether it happens once or repeatedly — a private individual moving their own personal household with no business connection to the expense is not a withholding agent, and the mover does not receive a BIR Form 2307 for that job.

What EWT rate applies to a moving or relocation contract? #

A moving or relocation company’s fee is not named as its own separate line item in RR No. 2-98 — it falls under the same flat 2% general contractor/business-services catch-all that covers transportation contractors and common carriers hauling goods by land, air, or water, the same bracket described in BIR Form 2307 for Contractors and Subcontractors. A mover packing, loading, hauling, and unloading a client’s belongings is delivering exactly this kind of contracting service, whether the job is a single office relocation or a recurring arrangement for a business that moves staff or locations regularly.

RR No. 11-2018 applies the 2% bracket broadly to “other contractors,” including transportation contractors and common carriers, once monthly payments to the same payee reach the regulation’s threshold.

This is a different scenario from paying for ongoing dedicated warehouse space or a recurring third-party logistics (3PL) storage-and-fulfillment retainer, covered in BIR Form 2307 for Warehousing, Storage, and Logistics Service Fees — a moving contract is a project-based relocation job, not standing storage or fulfillment infrastructure, even though both sit in the same 2% contractor bracket when the underlying payment is a service rather than a real property lease.

How do packing materials and storage-in-transit factor into the withholding base? #

A moving company’s invoice often bundles several things — packing materials and boxes, labor to pack and load, trucking, and sometimes a few days of storage before final delivery — but for an ordinary business client, the whole bill is generally withheld at the flat 2% rate as one service, the same treatment this series applies to a combined parts-and-labor repair bill in BIR Form 2307 for Auto Repair Shops and Dealership Service Centers. Packing, loading, and hauling a client’s goods to a new location is a single service deliverable, not a separate sale of boxes and tape followed by a separate labor charge, unless the client’s own status changes that.

A company classified as a Top Withholding Agent (TWA) — reached once gross sales/receipts, gross purchases, or claimed deductible itemized expenses hit the threshold set under RR No. 7-2019, RR No. 11-2018, and RR No. 24-2025 — can apply the 1% goods rate to a genuinely itemized packing-materials line and the 2% services rate to the rest of the invoice, the same goods-vs-services split covered in BIR Form 2307 for Purchases of Goods: Top Withholding Agent 1% Rate Explained. Without a real itemized breakdown from the mover, even a TWA should default to withholding the full invoice at 2%.

Short-term storage-in-transit stays inside the same 2% bundle, as long as the client doesn’t get a dedicated, controlled space. A mover that holds a client’s belongings in its own facility for a matter of days or weeks between pickup and final delivery — deciding for itself where within its own warehouse the goods sit — is still delivering a relocation service, not leasing real property. That’s a different arrangement from a business that separately leases a defined, controlled warehouse bay on an ongoing basis, which is withheld at 5% as a real property rental instead, under the same beneficial-use-and-control test covered in the warehousing and logistics guide linked above.

Worked example: an office relocation with packing materials billed separately #

Meridian Business Solutions Corp. hires Swiftmove Relocation Services Inc., a corporation, to relocate its main office — packing, loading, trucking, and unpacking at the new site — for a flat project fee billed as one invoice with two itemized lines. Swiftmove’s invoice lists ₱18,000 for packing materials (boxes, bubble wrap, crating) and ₱82,000 for packing labor, loading, hauling, and delivery, for a combined ₱100,000 (VAT-exclusive) project.

Meridian is not a classified Top Withholding Agent, so the itemized breakdown doesn’t change the withholding treatment — the full invoice is a single relocation service, withheld at 2%:

Meridian withholds ₱2,000 and remits it through BIR Form 0619-E monthly and BIR Form 1601-EQ quarterly, lists Swiftmove Relocation Services on its Quarterly Alphalist of Payees, and issues a BIR Form 2307 showing ₱100,000 as the income payment, ATC WC120, and ₱2,000 as tax withheld. Swiftmove credits that ₱2,000 against its own income tax when filing, supported by the certificate.

Had Meridian instead been a classified Top Withholding Agent, it could have applied the 1% goods rate to the ₱18,000 packing-materials line (₱180) and the 2% services rate to the ₱82,000 labor-and-hauling line (₱1,640) — ₱1,820 total, a different figure than withholding the combined bill at a flat 2%. If Swiftmove had also stored Meridian’s furniture in its own warehouse for two weeks between the old and new office leases, without giving Meridian a dedicated storage bay it controlled, that storage would stay inside the same 2% relocation-service invoice rather than triggering a separate 5% rental.

Frequently asked questions #

What withholding tax rate applies when a company pays a moving or relocation company? #

A corporation or business-registered individual paying a moving or relocation company for an office move, employee household-goods relocation, or similar hauling contract generally withholds the flat 2% expanded withholding tax (EWT) rate under RR No. 2-98, Section 2.57.2(E), as amended by RR No. 11-2018 — ATC WI120 for an individually run mover or WC120 for a moving company organized as a corporation.

Is a one-time office relocation project treated differently for withholding than a recurring logistics contract? #

No. Whether the moving company is hired once for a single office relocation or under a standing contract for repeated moves, the payment sits in the same 2% general contractor/business-services bracket. What changes is only the timing of withholding — a one-time project is withheld when that single invoice is paid, accrued, or billed, while a recurring contract is withheld period by period.

Do you withhold tax on packing materials and supplies billed by the mover? #

For most business clients, a combined invoice covering packing materials, labor, and hauling is withheld in full at 2% as one bundled service, the same way a construction contractor’s materials-plus-labor billing isn’t split. Only a client classified as a Top Withholding Agent, working from a genuinely itemized invoice, can apply the 1% goods rate to the packing supplies and the 2% services rate to the labor and hauling portion.

Does the 2% rate apply whether the move is for company property or an employee’s household goods? #

Yes. The withholding obligation attaches to the payor’s connection to trade or business under RR No. 2-98, Section 2.57.3(A)-(B), not to whose goods are being moved. A company that pays a moving company directly to relocate a transferred employee’s household goods, as part of its own business expense for that transfer, withholds the same as it would for an office move — the mover is still being paid for a contracting service by a business-connected payor.

What if the moving company also stores the goods in transit before final delivery? #

Short-term storage-in-transit that is part of a single relocation job — where the mover simply holds goods in its own facility for a matter of days or weeks before final delivery, without granting the customer a dedicated, controlled space — stays part of the bundled 2% service. It’s a different scenario from leasing dedicated warehouse space on an ongoing basis, which is withheld at 5% as a real property rental instead.

Summary #

A moving or relocation company’s fee — for an office move, a full corporate relocation, or an employee’s household-goods relocation paid directly by the employer — sits in the flat 2% general business-services bracket (ATC WI120/WC120) under RR No. 2-98, Section 2.57.2(E), the same bracket this series applies to other contractors and hauling services. A combined invoice covering packing materials, labor, and short-term storage-in-transit is generally withheld in full at 2%, and only a classified Top Withholding Agent with a genuinely itemized bill can split out packing supplies at the 1% goods rate. See BIR Form 2307 for Contractors and Subcontractors for the general 2% bracket this rate draws from, and BIR Form 2307 for Warehousing, Storage, and Logistics Service Fees for when ongoing storage instead crosses into the 5% rental rate.