Google Pampanga Real Estate Guide, Trend and Review: NEWS: BIR issues new rules concerning one-time real estate transaction

Thursday, November 15, 2007

NEWS: BIR issues new rules concerning one-time real estate transaction

I have read on this article published last 26th November 2007 which was written by Ms. Iris Gonzales of the Philippine Star Revenue Memorandum Circular No. 76-2007 issued by Bureau of Internal Revenue last 25th of October 2007.

Fraudulent Tax evaders of real estate transactions days are numbered. The Bureau of Internal Revenue sharpening its teeth in collecting the revenues on the real estate industry which is on the upswing on current times.

BIR has set additional required documents which are mandatory for one-time real estate transaction. The needed documents include photocopy of official receipts issued by the seller, for purpose of determining whether of real property is on cash basis, a deferred payment sale or installment. Also acknowlegement receipt or proof of payment must be presented if the seller is not engage in business.

While the Contract to Sell and official receipts of payments are among the documents required for installment sales in Annex A2 of Revenue Memorandum Order No. 15-2003, the taxpayer presents only the Deed of Absolute Sale which is, oftentimes, executed upon full payment. The purpose of requiring the submission of a photocopy of the official receipts is for the Revenue District Office to have a means of validating if the transaction is on cash basis, deferred payment or installment plan. BIR Chief Lilian Hefti issued this memoranda in order to ensure transparent dealings and that taxes are appropiately paid and remitted to the government.

It seems that real estate transactions before do not have transparency in making deals with the Bureau of Internal Revenue. Awkwardly saying that there are some cases when taxes are filed incorrectly and some unscrupoulous individuals (sellers, buyers, etc.) engage in this type sale issued by the previous owner/seller to the buyer.

Here is the link for more information and better understanding of this subject. Revenue Memorandum Circular No. 76-2007
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