BIR Form 2307 for Pet Grooming and Boarding Services: When a Business Client Withholds

A business client — a hotel running a pet-friendly program, a corporate events team boarding animals for a shoot, or any company paying a pet grooming or boarding provider as part of its trade or business — generally withholds 2% expanded withholding tax (EWT) under RR No. 2-98, Section 2.57.2(E), and issues BIR Form 2307. A private individual paying the same groomer or boarding facility to care for their own pet generally is not a withholding agent at all.

This guide is part of the BIR Form 2307 series. It covers who withholds on a pet grooming or boarding payment, the applicable ATC codes, how a recurring boarding contract is withheld month by month, and a worked example for a hotel’s pet-friendly guest program.

Who withholds on a pet grooming or boarding 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 pet owner 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 hotel paying a grooming salon to service guests’ pets as part of a paid pet-friendly package, or a corporate events team paying a boarding facility to house animals during a shoot or a product activation, is a withholding agent under clause (A) or (B). A pet owner who personally books and pays for their own dog’s grooming session or a weekend of boarding falls outside the rule entirely — that payment has no connection to a trade or business.

What EWT rate applies? #

Pet grooming, boarding, and daycare are not named as their own separate line items in RR No. 2-98 — all three fall under the same flat 2% general contractor/business-services catch-all covered in BIR Form 2307 for Contractors and Subcontractors, the same bracket this series applies to pest control and waste hauling providers in BIR Form 2307 for Pest Control and Waste Hauling Services.

A licensed veterinarian’s own professional fee is a different bracket. If a boarding facility’s invoice separately itemizes a veterinarian’s treatment charge alongside its own boarding fee, the veterinary portion falls under the 5%/10% professional-fee bracket covered in BIR Form 2307 for Veterinary Clinics and Animal Health Service Providers, while the boarding or grooming portion of the same invoice stays at 2%.

How a recurring monthly boarding or grooming contract gets withheld #

A hotel or corporate client with an ongoing pet-friendly arrangement often pays a groomer or boarding facility on a recurring basis rather than as a single purchase, which raises the same timing question this series addresses for other retainer-style suppliers. Under RR No. 2-98, Section 2.57.4, as amended by RR No. 4-2024, the withholding obligation is triggered by whichever of actual payment, the payor’s own books recording or accruing the expense, or the seller’s supporting invoice comes first. Applied to a recurring boarding or grooming contract, this generally means each month’s fee is withheld as that month’s payment falls due, is paid, or is booked as an expense — not accumulated across the year and withheld once. See When Must You Withhold Tax for BIR Form 2307: At Payment or When the Expense Accrues? for the full mechanics of this timing rule.

Worked example: a hotel’s pet-friendly guest program #

Marina Bayfront Hotel Corp. contracts Wagging Tails Pet Spa Corp. to provide grooming and daycare services to guests enrolled in its pet-friendly package, billed as a fixed ₱18,000 monthly retainer covering scheduled grooming slots and daytime boarding.

Marina Bayfront withholds ₱360 each month as the invoice is booked, remits it through BIR Form 0619-E monthly and BIR Form 1601-EQ quarterly, and issues Wagging Tails Pet Spa a BIR Form 2307 each quarter summing the cumulative fees paid, ATC WC120, and total tax withheld for the period. Had a hotel guest instead booked and paid Wagging Tails directly out of pocket for a one-off grooming session for their own pet, no withholding or BIR Form 2307 would apply to that payment at all — the guest is not a withholding agent.

Frequently asked questions #

Does a business have to withhold tax when paying a pet grooming or boarding company? #

Yes, if the payor is a corporation or a business-registered individual. A hotel, corporate events team, or other business paying a pet grooming, boarding, or daycare provider for recurring or one-time 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.

What withholding tax rate applies to pet grooming and boarding fees? #

Pet grooming, boarding, and daycare services are not named as their own line item in RR No. 2-98 and generally fall under the 2% general contractor/business-services bracket under Section 2.57.2(E), as amended by RR No. 11-2018 — ATC WI120 for an individually run provider or WC120 for one organized as a corporation.

Does a pet owner paying for their own pet’s grooming or boarding 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. An individual pet owner paying a grooming salon or boarding facility to care for their personal pet is not a withholding agent, and the provider does not receive a BIR Form 2307 for that payment.

Does a hotel with a pet-friendly program need to withhold tax on grooming or boarding services it pays for? #

Yes, if the hotel is paying a grooming or boarding business as part of its trade or business — for example, contracting a groomer to service guests’ pets as a paid amenity, or boarding pets on behalf of guests under a package. That payment is connected to the hotel’s business and falls under RR No. 2-98, Section 2.57.3(A), so the hotel withholds 2% and issues BIR Form 2307.

How is withholding computed on a recurring monthly boarding or grooming 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 as amended by RR No. 4-2024. For a recurring monthly boarding or grooming contract, this generally means each month’s fee is withheld in the month it’s paid, accrued, or invoiced, not accumulated and withheld once at year-end.

Does veterinary treatment given during boarding change the withholding rate? #

Yes, if the boarding facility separately itemizes licensed veterinary services on its invoice. A veterinarian’s own professional fee falls under the 5%/10% professional-fee bracket under RR No. 11-2018, distinct from the 2% rate that applies to grooming, boarding, and daycare as general services — the payor should apply each rate to its own itemized portion of a combined invoice.

Summary #

Pet grooming, boarding, and daycare services sit in the flat 2% general business-services bracket (ATC WI120/WC120) under RR No. 2-98, Section 2.57.2(E), the same bracket covering pest control and waste hauling providers — but only when the payor is a business, such as a hotel running a pet-friendly guest program or a corporate events team, rather than a private pet owner paying for their own animal’s care. On a recurring monthly retainer, each month’s fee is withheld as it’s paid, accrued, or invoiced under the Section 2.57.4 timing rule. See BIR Form 2307 for Contractors and Subcontractors for the general 2% bracket this rate draws from, and BIR Form 2307 for Pest Control and Waste Hauling Services for another recurring-contract service in the same bracket.