THE BUREAU of Internal Revenue (BIR) has prescribed guidelines and procedures for ascertaining individuals’ capacity to pay for or hold properties, under Revenue Memorandum Order No. 24-2016 that was issued last June 7, published in a newspaper yesterday and which takes immediate effect.
Transactions covered by the order are -- but are not limited to -- those subject to final capital gains tax (CGT) on sale of real properties considered capital assets; CGT on sale, transfer or assignment of stocks not traded on the stock exchange; expanded withholding tax on the sale of real properties considered “ordinary assets”; donor’s tax; estate tax; other taxes including documentary stamp tax on the sale or transfer of properties; as well as those covered by tax-free transfer under Section 40 (on Determination of Amount and Recognition of Gain or Loss) of the National Internal Revenue Code of 1997, as amended.
RMO 24-2016 prescribed the following guidelines and procedures:
• application for the issuance of Certificate Authorizing Registrations and Tax Clearance covering sale/transfer/assignment of properties under RMO 15-2003 and other related issuances -- as well as for all supporting documents required under existing BIR issuances and those that may be required thereafter -- will be evaluated for possible audit or investigation;
• parties to covered transactions may also be subjected to an audit or investigation to determine their capacity to hold and/or acquire properties.
SCRUTINY
The BIR said that if it is determined that the sellers, transferors or buyers concerned have no capacity to acquire the subject property, the revenue district officer may recommend the issuance of an electronic letter of authority, which triggers an audit or investigation, for approval by the regional director having jurisdiction over the parties concerned.
RMO 24-2016 also tasks BIR’s One-Time Transactions Team to verify “in all cases” with the Integrated Tax System that the parties involved in covered transactions regularly file returns and report income sufficient to establish financial capacity.
Income tax return, Certificate of Creditable Tax Withheld at Source, Certificate of Final Tax Withheld at Source, as well as documents of loans for acquiring the subject property may be used to establish financial capacity.
Individuals not required by law to file an income tax return (ITR) will still need to establish their financial capacity by submitting an affidavit stating why they are not required to file an ITR, total annual income and source of income. -- ICCD
RMO 24-2016 prescribed the following guidelines and procedures:
• application for the issuance of Certificate Authorizing Registrations and Tax Clearance covering sale/transfer/assignment of properties under RMO 15-2003 and other related issuances -- as well as for all supporting documents required under existing BIR issuances and those that may be required thereafter -- will be evaluated for possible audit or investigation;
• parties to covered transactions may also be subjected to an audit or investigation to determine their capacity to hold and/or acquire properties.
SCRUTINY
The BIR said that if it is determined that the sellers, transferors or buyers concerned have no capacity to acquire the subject property, the revenue district officer may recommend the issuance of an electronic letter of authority, which triggers an audit or investigation, for approval by the regional director having jurisdiction over the parties concerned.
RMO 24-2016 also tasks BIR’s One-Time Transactions Team to verify “in all cases” with the Integrated Tax System that the parties involved in covered transactions regularly file returns and report income sufficient to establish financial capacity.
Income tax return, Certificate of Creditable Tax Withheld at Source, Certificate of Final Tax Withheld at Source, as well as documents of loans for acquiring the subject property may be used to establish financial capacity.
Individuals not required by law to file an income tax return (ITR) will still need to establish their financial capacity by submitting an affidavit stating why they are not required to file an ITR, total annual income and source of income. -- ICCD
source: Businessworld
No comments:
Post a Comment