RMC No. 31-2025: Clarification on the provisions on the applicable taxes due on sale of property considered as ordinary assets of the seller and other relevant matters

Key points

1. Returns to file. They file BIR Form No. 1606 to remit Expanded Withholding Tax and BIR Form No. 2000-OT for Documentary Stamp Tax on the sale. Lumping multiple sales in one CWT return is not allowed and cannot serve as proof of payment for the eCAR.
2. Proof of income tax credit. A copy of BIR Form No. 1606 with proof of payment of the CWT is attached to the ITR. Issuing BIR Form No. 2307 in its place is discontinued, and Form No. 1606 with proof of payment is the only proof of the credit.
3. Presentation in the annual ITR. The total of BIR Form No. 2307 for non-real estate businesses goes under Creditable Tax Withheld for the Year, while CWT remitted through Form No. 1606 goes under Other Tax Credits/Payments. The Circular lists the page, part, schedule and line numbers for BIR Form Nos. 1701, 1701A, 1702-MX, 1702-RT and 1702-EX.
4. Sales financed by institutions. When the buyer pays the balance through a loan from a financing institution that approves and guarantees release of cash to the seller, the seller’s receipt is subject to twelve percent (12%) output VAT. The seller issues a Sales Invoice to the buyer and an Acknowledgement Receipt or Official Receipt to the financing institution.
5. Other fees. Transfer, processing, miscellaneous and registration fees billed by the seller are subject to Income Tax and twelve percent (12%) output VAT.

Who is affected

• Taxpayers habitually engaged in the real estate business

Deadlines and effectivity

• Issued April 7, 2025
• Availability of the revised Annual ITR to be announced in a separate revenue issuance