Summary
RR No. 8-2021 amends provisions of RR No. 4-2021, which implemented the VAT and Percentage Tax provisions of RA No. 11534 (CREATE Act).
Key points
- VAT exemption on real property sales. Beginning January 1, 2021, the exemption applies only to real properties not primarily held for sale to customers or held for lease in the ordinary course of business, real property used for socialized housing under RA No. 7279, and house and lot or other residential dwellings priced at not more than ₱2,000,000.00, as adjusted to ₱ 3,199,200.00 in 2011 using 2010 Consumer Price Index values. Every three (3) years the amount is adjusted using the Consumer Price Index published by the PSA.
- Importation and ATRIG. Importation of the items under (i), (ii) and (iii) needs no Authority to Release Imported Goods (ATRIG) under RMO No. 35-2002, as amended, and the Bureau of Customs may release them without it. The exemption is subject to post audit by the BIR or the BOC, as applicable.
- Excess Percentage Tax payments. Excess payments caused by the drop from 3% to 1% starting July 1, 2020 until RR No. 4-2021 took effect may be carried forward to later taxable quarters. A refund is still allowed if the taxpayer shifted from non-VAT to VAT-registered status, or opted for the eight percent (8%) income tax rate at the beginning of TY 2021, and Section 3(2)(b) of RR No. 4-2021 is amended to say so.
Who is affected
- Percentage taxpayers with overpaid taxes
- Sellers of residential real property
Deadlines and effectivity
- Real property VAT rules: beginning January 1, 2021
- Excess Percentage Tax: July 1, 2020 until effectivity of RR No. 4-2021
Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.
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