QAP DAT File for a Law Firm or Professional Partnership: Which Payments Actually Belong On It

A law firm or accounting partnership organized as a General Professional Partnership (GPP) is a withholding agent in its own right, and its Quarterly Alphalist of Payees (QAP) DAT file has to carry two different kinds of rows in the same quarter: the firm’s own withholding on what it pays its partners, and ordinary expanded withholding tax (EWT) on what it pays everyone else. Partner profit shares, drawings, and advances are withheld at 10% or 15% under a rule written specifically for GPPs, while a non-partner associate’s retainer or an outside expert witness’s one-time fee is withheld under the regular 5%/10% professional-fee bracket — mixing the two up is a common QAP error for multi-partner firms.

Why a GPP withholds on its own partners #

A General Professional Partnership pays no income tax at the entity level under NIRC Section 26, but that exemption only covers the firm’s own income tax — it doesn’t excuse the firm from withholding when it hands money to its partners. When a GPP pays a partner a profit share, drawing, advance, or stipend, that payment is subject to creditable withholding tax under Revenue Regulations No. 2-98, Section 2.57.2(H), as amended by Revenue Regulations No. 30-03. As one practitioner summary of that provision puts it:

“Payments such as drawings, advances, sharings, allowances, or stipends made by the GPPs to partners are subject to Creditable Withholding Tax (CWT)… at the rate of 15 percent if the income payments to the partner for the current year exceed P720,000.00, and 10 percent if otherwise.”

— secondary-source summary of RR No. 2-98 Section 2.57.2(H), as amended by RR No. 30-03; confirm exact wording against the primary regulation

This is separate from the question of how the GPP itself receives and reports creditable withholding tax from its own clients — that side is covered in Does a GPP Need to File SAWT for Its Partners’ Creditable Withholding Tax? — and separate again from how each partner then reports that distributive share on their own income tax return, covered in How GPP Partners Report and Pay Income Tax on Their Distributive Share. This post is about a third, narrower question: what the firm itself lists on its own QAP DAT file as the withholding agent on its own outgoing payments.

What else shows up on a multi-partner firm’s QAP #

A law firm rarely pays only its partners — it typically also carries non-partner associates on a fixed professional retainer and brings in outside experts for one-off engagements, and neither of those payments uses the GPP partner rate. A non-partner associate lawyer paid a fixed monthly professional fee, or an outside expert witness paid a one-time fee, is withheld under the ordinary named-professional bracket of RR No. 2-98 Section 2.57.2(A) — generally 5% if the recipient’s gross income for the year is at or below ₱3,000,000, or 10% above that threshold (confirmed with the payee’s sworn declaration). These rows go on the same QAP DAT file as the partner-distribution rows, but under a different Alphanumeric Tax Code (ATC) and rate bracket.

Fees paid directly to the GPP itself — not to an individual partner — for the partnership’s professional services are a separate case again: under RR No. 2-98 Section 2.57.5(B)(4), income payments made to a GPP for its professional services are exempt from withholding tax, since the GPP’s own clients don’t withhold on what they pay the firm (that certificate, when it does apply, flows into the SAWT question linked above, not the QAP).

Worked example: a four-partner law firm’s Q3 QAP #

A four-partner law firm pays, in the same quarter: (1) each partner a ₱200,000 profit distribution — since this is below the ₱720,000 annual threshold per partner so far this year, it’s withheld at 10%; (2) a non-partner senior associate a fixed ₱80,000/month professional retainer, withheld at 10% as a named professional under the regular bracket (her prior-year gross receipts exceeded ₱3,000,000); and (3) an outside forensic accountant a one-time ₱50,000 expert-witness fee, withheld at 5% since his engagement is a first-time, lower-volume professional fee. All three categories appear on the firm’s QAP DAT file for the quarter, each under its own ATC — the partner-distribution rows do not get merged with the associate’s or the outside expert’s professional-fee rows, since they sit under different RR 2-98 provisions even though both ultimately show up as creditable withholding tax on the respective payee’s own return.

Summary #

A professional partnership’s QAP DAT file has to separate two legally distinct withholding obligations that happen to land on the same form: 10%/15% withholding on its own partners’ distributions under RR No. 2-98 Section 2.57.2(H), and ordinary 5%/10% professional-fee withholding on everyone else it pays — associates who aren’t partners and outside experts. Getting the ATC and rate right on each row keeps the QAP reconcilable against BIR Form 1601-EQ and avoids a validation mismatch at eSubmission.