REVENUE MEMORANDUM CIRCULAR NO. 63-2012 issued on October 29, 2012 clarifies the issues affecting invoicing and recording of income payments for media advertising placements.
         The media supplier shall bill the client/advertiser for the total amount of media placement. Upon payment, the client/advertiser shall withhold 2% on the entire invoice amount of the media supplier and issue a Certificate of Creditable Income Tax Withheld at Source (BIR Form 2307) in the name of the media supplier.
          Upon receipt of income payment from the advertiser, the media supplier shall issue Value-Added Tax (VAT) invoice/official receipt to client/advertiser and shall report the entire amount as business income for Income Tax purposes.
           On  the  payment  of  commission/service fee  by  the  media  supplier  to  the  advertising agency, the media supplier shall withhold 2% from the commission/service fee of the advertising agency and issue a Certificate of Creditable Income Tax Withheld at Source (BIR Form 2307) in the name of the advertising agency.
         The advertising agency shall issue its VAT invoice/official receipt to the media supplier for the amount of commission/service fee received. The amount of VAT shall be reported based on the commission/service fee of the advertising agency.