RMO No. 13-2014: Prescribes the policies, guidelines and procedures in the management, sale/disposal of acquired/forfeited assets (absolutely forfeited personal and real properties)

Summary

RMO No. 13-2014 prescribes the policies, guidelines and procedures for managing and selling or disposing of acquired or forfeited assets whose ownership passed to the government by summary remedies.

Key points

1. Reporting and recording. Revenue offices holding acquired assets submit monthly reports of real and personal assets on or before the 15th day of the following month. Real assets are recorded in the National Government Books of Accounts after the one-year redemption period at the lower of Fair Market Value or taxes due with penalties. Personal and intangible assets are recorded on the same lower-of basis.
2. Custody and income. The RDO where a real property sits administers it and consolidates title in the name of the Republic of the Philippines after the one-year redemption period. Income or fruits of the assets are accounted for, deposited with the Bureau of Treasury and recorded as tax collections, with a Monthly Report on Income due not later than the 10th day of each month.
3. Time to sell. Acquired real properties are converted to cash by public or private sale within three (3) years from acquisition, forfeiture or seizure, unless there are justifiable and valid reasons. Acquired personal properties are sold or disposed of immediately from forfeiture for whatever reasonable amount can be realized.
4. Agricultural lands. Acquired agricultural real properties are referred to the Department of Agrarian Reform (DAR) and the Land Bank of the Philippines (LBP). Land confirmed as suitable for agriculture is transferred to DAR by Deed of Transfer, and LBP pays the BIR within 30 days from registration of the Deed, at least 10% in cash and the balance in LBP bonds payable in 10 years.
5. Notice, floor price and negotiated sale. Notice of Sale is published once a week for 2 consecutive weeks, completed at least 20 days before the auction. Personal assets are noticed by posting in not less than 2 public places at least 20 days before. The floor price for real property is the highest of the zonal value FMV, the tax declaration FMV, the offered purchase price, or the forgone taxes with penalties and costs. Negotiated sale of real assets comes after 2 failed public biddings with approval of the Secretary of Finance under Section 216 of the Tax Code, while personal properties do not need these.
6. Public auction. A Bids and Awards Committee-Acquired Assets (BAC-AA) in each Regional Office runs the auction through sealed bids with a COA representative, and at least 3 bidders are needed per property. Bidders post a bid bond of 10% of the floor price within 3 days before the auction. The winner pays in full within 2 days after receiving the Notice of Award, and failing that, the award is void and the bond is forfeited unless the CIR allows an extension. Foreign nationals and BIR employees cannot bid on real properties, and the winning bidder bears transfer taxes and expenses and ejection or hauling costs.

Who is affected

• Revenue Regional Offices and Revenue District Offices holding acquired assets
• Bidders in public auctions

Deadlines and effectivity

• Monthly asset reports due on or before the 15th day of the following month
• Monthly income report due not later than the 10th day of each month
• Real property sold within three (3) years of acquisition, forfeiture or seizure
• Winning bidder pays within 2 days after the Notice of Award

Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.