What Is BIR Form 2306? Certificate of Final Tax Withheld at Source Explained

BIR Form 2306 is the Certificate of Final Tax Withheld at Source — the official statement a withholding agent (payor) issues to a payee documenting income subject to final withholding tax (FWT) and the tax already withheld. Under Revenue Regulations (RR) No. 2-98, as amended by RR No. 11-2018 and later issuances, BIR Form 2306 is the prescribed certificate for final tax, while BIR Form 2307 is reserved for creditable withholding tax (CWT). Mixing the two misstates whether the payee still has anything to credit on an income tax return.

This definition pillar explains what BIR Form 2306 certifies, when it must be issued, how it differs from BIR Form 2307, and where remittance and alphalist filings fit. Rate tables for interest, royalties, and dividends live in Withholding Tax on Interest, Royalties, and Dividends; the dividend-specific certificate choice is in Is a Dividend Payment Subject to BIR Form 2307 or Form 2306?.

What does BIR Form 2306 certify? #

BIR Form 2306 certifies that final tax was withheld at source on a specific income payment — and that the withheld amount fully settles the payee’s income tax on that item. The certificate shows the nature of the income payment, the applicable Alphanumeric Tax Code (ATC), the amount of payment, and the tax withheld, broken down by month within the quarter where the form requires it.

Because the tax is final, the payee generally does not include that income in a further income-tax computation or claim the withheld amount as a credit on BIR Form 1700 / 1701 / 1702. That is the opposite of BIR Form 2307, which exists precisely so the payee can claim CWT against their own return — see What Is BIR Form 2307?.

When must BIR Form 2306 be issued? #

Issue BIR Form 2306 within twenty (20) days after the close of the taxable quarter in which the withholding was made — or earlier, if the payee asks for it with payment. RR No. 11-2018 provides that every payor required to deduct and withhold taxes under the covered subsection shall furnish each payee a withholding tax statement, in triplicate, within twenty (20) days from the close of the quarter, using BIR Form 2307 for creditable tax and BIR Form 2306 for final withholding tax, showing the monthly income payments, the quarterly total, and the taxes withheld. Upon request of the payee, the payor must furnish the statement simultaneously with the income payment.

Practical timing for a calendar-year withholder:

Always confirm against the current RR text and any calamity or e-certificate circular that adjusts format (electronic certificate facilities) without changing the 20-day rule.

Which payments use BIR Form 2306? #

Use BIR Form 2306 when the National Internal Revenue Code and RR No. 2-98 (as amended) classify the payment as subject to final withholding tax. Common categories include:

• Interest on bank deposits, deposit substitutes, and similar passive interest subject to final tax
• Royalties (general final rates, with preferential rates for certain literary/musical works under NIRC Section 24(B))
• Cash or property dividends paid by a domestic corporation to individual shareholders
• Other final-tax income payments listed in the Tax Code / RR schedule for which BIR Form 2306 is the prescribed payee certificate

Do not use BIR Form 2306 for ordinary expanded/creditable withholding (professional fees, rent, contractors) — those belong on BIR Form 2307. For the dividend edge cases (intercorporate dividends generally untaxed; NRFC dividends still final tax), see the 2307 vs 2306 dividend guide.

How BIR Form 2306 ties to remittance and the FWT QAP #

BIR Form 2306 is the payee’s proof; BIR Form 1601-FQ (and monthly BIR Form 0619-F where applicable) is how the withholding agent remits the same final tax to the BIR. The Quarterly Alphalist of Payees (QAP) for final withholding must list the payees and amounts that support the quarterly remittance return. Filing cadence and attachments are covered in BIR Form 1601-FQ: Quarterly Final Withholding Tax Return and How to Convert Excel to BIR DAT File for QAP.

A clean compliance chain looks like this:

1. Withhold final tax at the correct ATC and rate when the income is paid or accrued under the applicable rule
2. Remit through BIR Form 0619-F / BIR Form 1601-FQ on the prescribed deadlines
3. Issue BIR Form 2306 to each payee within 20 days after quarter-close (or with payment on request)
4. Submit the FWT QAP that reconciles to the remittance return

Worked example: bank interest certified on BIR Form 2306 #

A domestic bank credits ₱50,000 of deposit interest to a resident individual depositor in March 2026. Under NIRC Section 24(B), bank deposit interest paid to individuals is generally subject to 20% final withholding tax.

The depositor does not claim the ₱10,000 as a creditable tax on BIR Form 1700 / 1701 — the final tax already settled the liability on that interest. Had the same ₱50,000 been a professional fee subject to expanded withholding, the correct certificate would have been BIR Form 2307 instead.

Frequently asked questions #

What is BIR Form 2306? #

BIR Form 2306 is the Certificate of Final Tax Withheld at Source — the withholding tax statement a payor issues to a payee documenting income payments subject to final withholding tax and the amount of final tax withheld under Revenue Regulations No. 2-98, as amended, including Revenue Regulations No. 11-2018.

How does BIR Form 2306 differ from BIR Form 2307? #

BIR Form 2306 certifies final withholding tax, which fully satisfies the tax due on that income so the payee has nothing left to credit. BIR Form 2307 certifies creditable withholding tax, which the payee later credits against income tax due on their own return.

When must a withholding agent issue BIR Form 2306? #

Under Revenue Regulations No. 11-2018, every payor required to deduct and withhold taxes must furnish each payee a withholding tax statement (BIR Form 2306 for final withholding tax) within twenty (20) days from the close of the quarter. Upon request of the payee, the payor must furnish the statement simultaneously with the income payment.

What income payments typically require BIR Form 2306? #

BIR Form 2306 is used for income subject to final withholding tax — commonly including bank deposit interest, many royalties, cash or property dividends paid to individuals, and other final-tax categories under the National Internal Revenue Code and RR No. 2-98, as amended — rather than for creditable expanded withholding tax payments.

Which BIR return remits the tax shown on BIR Form 2306? #

Final withholding tax remitted to payees on BIR Form 2306 is reported and paid by the withholding agent through the final-withholding return structure, principally BIR Form 1601-FQ (with monthly BIR Form 0619-F where applicable) and the Quarterly Alphalist of Payees (QAP) for final-tax payees.

Summary #

BIR Form 2306 is the payee certificate for final withholding tax: it proves the tax on that income is already settled, must be issued within 20 days after quarter-close under RR No. 11-2018 (or with payment on request), and must not be confused with BIR Form 2307. Pair BIR Form 2306 issuance with BIR Form 1601-FQ remittance and the FWT QAP, and use the interest / royalties / dividends rates guide when choosing the correct final-tax ATC.