BIR Form 2307 for a One Person Corporation (OPC): Which Withholding Rate Applies?
A One Person Corporation (OPC) is a corporation, not a sole proprietor — so when you pay an OPC for services, you withhold at the corporate expanded withholding rates and issue BIR Form 2307, and the OPC credits it against its corporate income tax. The single most common mistake is applying the individual 5%/10% professional-fee rate to an OPC; because an OPC is a juridical person, the corporate 10%/15% rate applies instead.
Generate the OPC's BIR Form 2307 — FREE →An OPC is taxed as a corporation #
A One Person Corporation has a single stockholder but is still a corporation, and the BIR taxes it as a domestic corporation — not as a self-employed individual. The Revised Corporation Code (Republic Act No. 11232) defines it plainly:
“A One Person Corporation is a corporation with a single stockholder: Provided, That only a natural person, trust, or an estate may form a One Person Corporation.”
— Republic Act No. 11232 (Revised Corporation Code), Section 116
Because it is a corporation, an OPC files the corporate income tax returns (BIR Form 1702Q quarterly and 1702 annually) and is subject to the regular corporate income tax. That corporate character is what determines how you withhold when you pay it. For the foundational rules on issuing the certificate, see What Is BIR Form 2307 and When Must You Issue It?.
Which expanded withholding rate applies #
Because an OPC is a juridical person, income payments to it use the corporate expanded withholding rates under RR No. 11-2018, not the individual brackets. The rate depends on the type of payment:
| Payment to an OPC | Rate | Typical ATC |
|---|---|---|
| Professional / management / consultancy fees, OPC gross income ≤ ₱720,000 | 10% | WC010 |
| Same, OPC gross income > ₱720,000 | 15% | WC011 |
| Contractor / general services (payor is a top withholding agent) | 2% | WC120 / WC160 |
| Purchase of goods (payor is a top withholding agent) | 1% | WC158 |
The critical contrast is with an individual professional: a sole-proprietor consultant is withheld at 5%/10% (see BIR Form 2307 for Professional Fees), while the same consultancy delivered through an OPC is withheld at 10%/15%. The legal form of the payee, not the nature of the work, sets the rate. For the flat 2% service rate, see BIR Form 2307 for Contractors and Subcontractors.
Issue Form 2307; the OPC credits it on 1702Q #
The withholding agent issues BIR Form 2307 to the OPC, which claims the tax withheld as a creditable credit against its corporate income tax on BIR Form 1702Q and 1702. The mechanism is identical to any other creditable withholding — the difference is only that the OPC reports the credit on the corporate return, not an individual one. The OPC should reconcile the certificates it receives against the credits it claims each quarter.
Worked example: paying an OPC ₱200,000 in consultancy fees #
Assume a company engages an IT consultancy organized as an OPC, pays it ₱200,000 for a project, and the OPC’s current-year gross income does not exceed ₱720,000. The corporate 10% rate applies.
| Item | Amount |
|---|---|
| Consultancy fee | ₱200,000 |
| Expanded withholding tax (10%, ATC WC010) | ₱20,000 |
| Net paid to the OPC | ₱180,000 |
| Certificate issued | BIR Form 2307 |
| OPC’s treatment | Credit ₱20,000 against corporate income tax on Form 1702Q |
Had the same consultant billed as an individual sole proprietor instead, the rate would have been 5% (₱10,000), assuming a valid sworn declaration — the same service, a different withholding because of the payee’s legal form. Withholding at 5% on an OPC understates the tax and creates a deficiency the payor is liable for.
Frequently asked questions #
Is a One Person Corporation taxed as an individual or a corporation? #
As a corporation. A One Person Corporation (OPC) under RA 11232 is a corporation with a single stockholder, and the BIR treats it as a domestic corporation subject to the regular corporate income tax, filing BIR Form 1702Q and 1702 — not as a self-employed individual filing BIR Form 1701.
What withholding rate applies when I pay an OPC? #
The corporate expanded withholding rates. Professional, management, and consultancy fees to a juridical person such as an OPC are subject to 10% (if the OPC’s current-year gross income does not exceed ₱720,000) or 15% (if it exceeds ₱720,000). Contractor and service payments are 2%, and purchases of goods by a top withholding agent are 1%.
Do I still issue BIR Form 2307 to an OPC? #
Yes. The withholding agent issues BIR Form 2307 (Certificate of Creditable Tax Withheld at Source) to the OPC, which claims the withheld amount as a creditable tax credit against its corporate income tax on BIR Form 1702Q and 1702.
Does an OPC use the individual 5%/10% professional fee rate? #
No. The 5%/10% rate applies to individual professionals. Because an OPC is a juridical person, income payments for its professional or consultancy services use the corporate 10%/15% rate under RR No. 11-2018, not the individual bracket.
What ATC applies to consultancy fees paid to an OPC? #
Professional and consultancy fees to a corporation generally use ATC WC010 (10%) or WC011 (15%), the corporate counterparts to the individual WI010/WI011 codes. Confirm the correct ATC for the specific payment type against the BIR’s ATC tables before filing.
Summary #
An OPC blurs the line between “one person” and “a corporation,” but for withholding there is no ambiguity: RA 11232 makes it a corporation, so income payments to it use the corporate 10%/15% professional rate (or 2% for services, 1% for goods), evidenced by a BIR Form 2307 the OPC credits on its corporate return. Do not apply the individual 5%/10% rate to an OPC. Confirm the payee’s legal form before withholding, and check the current ATC tables on the BIR website.