REVENUE REGULATIONS NO. 14-2003 issued on April 3, 2003 simplifies the collection of tax, through withholding at the source, on sales of goods and services subject to the 3% Percentage Tax and Value-Added Tax (VAT). Any person, natural or juridical, with respect to his/its purchase of goods or payments for purchase of services made in the course of trade or business (including exercise of profession) shall be subject to: 1) Percentage Tax withholding at source at the rate of 3% based on the payee’s gross sales/receipts, if said purchase of/payment for goods/services is from non-VAT registered persons; or 2) VAT withholding at source at the rate of 10%, if said purchase of/payment for goods/services is from VAT-registered persons. In both cases, the taxpayer-payee has opted to remit his Percentage Tax/VAT through the withholding and remittance of the same by the payor-withholding agent. Such option is manifested by the payee through the filing of “Notice of Availment of the Option to Pay the Tax through the Withholding Process.” For VAT taxpayers-payees, a “Waiver of the Privilege to Claim Input Tax Credits” shall also have to be executed. The Percentage Tax/VAT withheld shall be remitted to the appropriate BIR collection agents by the payor-withholding agent using BIR Form No. 1600 (Monthly Remittance Return of VAT and Other Percentage Taxes Withheld). Said return shall serve as the withholding tax return of the payor-withholding agent and as the substituted Percentage Tax/VAT return of the payee, provided the income recipient-payee has only one payor from whom he generates his income, and that a “Notice of Availment of the Substituted Filing of Percentage Tax return/VAT return” is filed with the respective Revenue District Office. If the payee has more than one payor, the Percentage Tax/VAT withheld and remitted by the payors shall be treated as creditable tax by the payee when he files the Monthly Percentage Tax return (BIR Form No. 2551M) or Quarterly VAT return (BIR Form No. 2550Q), as the case may be. The option to remit the Percentage Tax/VAT under the withholding system, once chosen, shall remain as the manner of remitting the tax unless said option is cancelled by the payee. Meanwhile, the option to file under the Substituted Filing of the Percentage Tax/VAT Return allowed for payees with just one payor shall continue to apply to subsequent taxable years until such time that an additional client or customer comes in within the taxable year. In which case, the taxpayer-payee has to file the “Notice of Cancellation of Availment of the Substituted Filing of Return,” which should be done not later than the 10th day of the month following the close of taxpayer’s taxable year. For sellers of services whose gross receipts have been subjected to the withholding of the 3% Percentage Tax/10% final VAT, they shall be exempted from the obligation of issuing duly registered non-VAT/VAT receipts covering their receipt of payments for goods or services sold. In lieu thereof, the issued “Certificate of Final Tax Withheld at Source” (BIR Form No. 2306), for payee with just one payor, or the “ Certificate of Creditable Tax Withheld at Source” (BIR Form No. 2307), for payee with several payors, shall be constituted and treated as the substituted official receipt. VAT-registered sellers of goods or service covered by the provisions of these Regulations, regardless of whether or not they opted for the “Substituted Filing of VAT Return,” shall still comply with the conditions set forth by Revenue Regulations No. 8- 2002 regarding the quarterly submission of summary list of sales, summary list of domestic purchases and summary list of importation.