Practice question
A client properly withholds creditable income tax from an independent professional’s fee. What is the basic income-tax function of that withholding?
- It necessarily makes the fee tax-free
- It is credited against the professional’s income-tax liability for the taxable year
- It automatically changes the professional into the client’s employee
- It is always the final tax on the fee
- It cancels the need to identify gross professional income
Legal references
- NIRC Section 57(B), as amended by RA 12066, Section 5: https://lawphil.net/statutes/repacts/ra2024/ra_12066_2024.html
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