RMO No. 32-2001: Prescribes the guidelines on the monitoring of the basis of properties transferred and shares of stock received, as well as revises and updates the requirements and conditions precedent to the non-recognition of gain or loss in the said transactions, among others

Summary

RMO No. 32-2001 sets guidelines for monitoring the basis of property transferred and shares received in a tax-free exchange, and updates the requirements for non-recognition of gain or loss in such transactions.

Key points

1. Where and how to apply. The application for Certification/Ruling is filed with the BIR Law Division on the prescribed form. It comes with a transmittal letter giving a brief overview of the transaction and three (3) copies of each document specified in the Order.
2. Completed transactions. For executed or completed transactions, original executed and notarized copies or certified true copies of the documents are submitted, with proof of payment of applicable Documentary Stamp Taxes (DST). For issuance of shares or units of participation, the DST due dates under RMO No. 8-98, as amended, apply.
3. Form and representatives. The request form is available at the Taxpayers Information and Education Division and Law Division and may be downloaded from www.bir.gov.ph. An authorized representative submits a special power of attorney. For a juridical person, the corporate secretary issues a sworn statement that the signing officer is Board-authorized and has personal knowledge of the facts.
4. Fee. The applicant pays the processing and certification fee under RR No. 18-2001 before filing. It is adjusted if additional transfer certificates of title, condominium certificates of title or certificates of stock are submitted.
5. CAR or Tax Clearance. The Revenue District Officer or authorized Internal Revenue Officer issues the Certificate Authorizing Registration/Tax Clearance based on the Commissioner’s certification-ruling that the transaction qualifies as a tax-free exchange or corporate reorganization.

Who is affected

• Parties to tax-free exchanges and corporate reorganizations
• Authorized representatives of applicants

Deadlines and effectivity

• Fee paid before filing the request for certification-ruling

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