RMC No. 50-2003: Clarifies the venue for payment of Capital Gains Tax/Creditable Expanded Withholding Tax and corresponding Documentary Stamp Tax relative to the sale of real properties by insurance companies.

Key points

1. Misunderstanding. Some insurance companies read the Memorandum of Agreement between the Insurance Commission and the BIR to mean all these taxes must be paid at the Land Bank of the Philippines, U.N. Avenue Branch.
2. Correct venue. Under RR No. 8-98 and other issuances, the taxes are paid to an Accredited Agent Bank (AAB) within the jurisdiction of the RDO where the property is located. Where there is no AAB, payment goes to the Revenue Collection Officer (RCO) of the RDO with jurisdiction over the property.
3. Waiver of penalties. The RDO had withheld the Tax Clearance Certificate (TCL) or CAR until penalties for paying at the wrong venue were settled. Penalties for such violations committed from the effectivity of the MOA but before this Circular are waived.
4. Future transactions. Insurance companies must strictly follow RR No. 8-98, as amended. Later violations of the venue rule bring surcharge and other penalties imposable under existing laws.

Who is affected

• Insurance companies selling real properties

Deadlines and effectivity

• Penalty waiver covers violations from the effectivity of the MOA until before the issuance of this Circular