RMC No. 44-2006: Publishes the full text of Republic Act (RA) No. 9343, an Act amending RA No. 9182, otherwise known as the Special Purpose Vehicle Act of 2002 for the purpose of allowing the establishment and registration of new SPVs and for other purposes

Key points

1. New SPV applications. Applications to establish and register an SPV are filed with the Commission within 18 months from the effectivity of RA No. 9343.
2. Tax exemptions. Transfers of Non-Performing Assets (NPAs) from Financial Institutions (FIs) to an SPV, and from an SPV to a third party or by dacion en pago, are exempt from four taxes. These are Documentary Stamp Tax under Title VII of the NIRC, Capital Gains Tax on capital assets under Section 39(A)(1), creditable withholding income taxes on land and buildings that are ordinary assets under Revenue Regulations No. 2-98, as amended, and VAT under Title IV or gross receipts tax under Title V, whichever applies.
3. Reduced fees. In lieu of the applicable fees, the transfers pay 50% of the mortgage registration and transfer fees under Land Registration Authority circulars. They also pay 50% of the filing fees for foreclosures initiated by the SPV and 50% of the land registration fees.
4. Period of privileges. Sales or transfers from FIs to an SPV, and dacion en pago to the FI, enjoy the privileges for not more than two (2) years from the effectivity of the Act. Transfers from an SPV to a third party of NPAs acquired within that period, and dacion en pago by a borrower to the SPV, enjoy them for not more than five (5) years from the SPV’s acquisition. Properties from GFIs or GOCCs devoted to socialized or low-cost housing cannot be converted to other uses.
5. Individuals. The same exemptions and privileges extend to an individual if the transaction involves a single family residential unit ROPOA or NPL secured by real estate mortgage on a residential unit. Only one transaction of one residential unit per individual is allowed, and the two-year and five-year periods apply.

Who is affected

• Financial Institutions and Special Purpose Vehicles
• Individuals with a single family residential unit ROPOA or NPL

Deadlines and effectivity

• SPV applications: within 18 months from effectivity of RA No. 9343
• RA No. 9343 took effect May 14, 2006, 15 days after its publication on April 29, 2006
• Privileges: not more than two (2) years from effectivity, and not more than five (5) years from SPV acquisition for later transfers