RR No. 5-2009: Reverts the venue for the filing of returns and payment of Capital Gains Tax, Creditable Withholding Tax and Documentary Stamp Tax due on sale, transfer or exchange of real property of large taxpayers to the place where the property is located

Key points

1. Reason and venue. The change gives uniform processing of real estate transactions of large and non-large taxpayers and allows quick ocular inspection before the Certificate Authorizing Registration (CAR) or Tax Clearance Certificate (TCL) is issued. Returns, payments, and the CAR/TCL for property owned by large taxpayers now fall under the RDO where the property is located. The same rules apply to taxable foreclosure sales.
2. Capital gains tax. For lands and/or buildings that are capital assets, the CGT Return (BIR Form No. 1706) is filed within 30 days following each sale, exchange, or disposition, by the seller or the buyer. Tax is based on the gross selling price or fair market value under Section 6(E) of the Tax Code, whichever is higher.
3. Withholding tax on ordinary assets. For ordinary assets, the buyer or withholding agent pays the CWT upon filing the CWT Return (BIR Form No. 1606) within ten (10) days following the end of the month of the transaction. This is subject to RR No. 2-98, as amended, and the EFPS rules for EFPS taxpayers.
4. Documentary stamp tax. The DST Return (BIR Form No. 2000-OT) is filed within 5 days after the close of the month when the taxable document was made, signed, accepted, or transferred. The tax is paid at the same time, based on the contracted consideration or fair market value under Section 6(E), whichever is higher.
5. CAR/TCL and post-audit. On presentation of the returns with bank validation of full payment, the RDO where the property is located issues the CAR or TCL. For ordinary assets, that RDO notifies the RDO of the seller’s place of business to post-audit the seller’s Quarterly Income Tax and VAT Returns. RR No. 24-2002 on information from the Land Registration Authority, the Register of Deeds, and the Assessor’s Office stays valid.
6. Transactions before effectivity. For cash or deferred-payment sales not on installment plan (payments in the year of sale exceed 25% of the selling price) already filed and paid with the LTS office, the LTS office keeps processing the CAR/TCL. The same applies to installment sales fully paid and filed with the LTS office. For installment sales (payments in the year of sale do not exceed 25%) not yet fully paid, the remaining tax installments accrue to the RDO where the property is located, and the LTS office endorses the prior documents to that RDO.

Who is affected

• Large taxpayers selling, transferring, or exchanging real property
• Buyers and withholding agents in those transactions
• Taxpayers in taxable foreclosure sales

Deadlines and effectivity

• CGT Return (BIR Form No. 1706): within 30 days following each sale
• CWT Return (BIR Form No. 1606): within ten (10) days following the end of the month
• DST Return (BIR Form No. 2000-OT): within 5 days after the close of the month