A

Purpose

Revenue Regulations No. 11-96 was issued in line with the computerized, tax systems initially rolled-out in the following revenue district pilot areas:

RDO No. 30 - Binondo

RDO No. 32 - Quiapo, San Miguel, Sta. Mesa, Sampaloc

RDO No. 33 - Ermita, Intramuros, Malate

RDO No. 52 - Para aque

RDO No. 81 - Cebu North District

The purpose of this Revenue Memorandum Order is to clarify certain provisions in the said Regulations, particularly Section 2 thereof which provides as follows:

"Upon filing of the capital gains tax return by an individual, estate or trust, and full payment of the capital gains tax due on the sale, transfer, barter, exchange or other disposition of real property, including conditional sale of property classified as capital asset, the Revenue District Officer (RDO) of the revenue district where the transferor is registered shall issue the corresponding tax clearance (TCL) certificate authorizing the registration of the real property in favor of the transferee by the Register of Deeds"

Until the mass roll out of the integrated tax systems and full implementation of the computerization program in all the Revenue District Offices nationwide, and for purposes of registration of real properties, Tax Clearance Certificate (TCL) shall be issued only by Revenue District Officers (RDOs) in pilot areas. The usual form of Certificate Authorizing Registration (CAR) shall be issued by the RDOs in non-pilot areas.

A. For purposes of the said Regulations, the terms or phrases as used therein shall have the following meaning:

1. "Tax Clearance Certificate (TCL)" - refers to the tax clearance to be issued by the RDO in the computerized area for purposes of resignation of real property upon full payment of capital gains tax.

2. "Certificate Authorizing Registration (CAR)" - refers to the old form of tax clearance to be issued by the RDO in non-computerized area.

3. "Where the transferor is registered" - refers to the RDO/Home RDO having jurisdiction over the domicile or legal residence, principal office/place of business of the transferor where he/it is registered or is required to be registered.

B. The following rules shall apply in the issuance of the TCL or CAR.

1. ESTATE TAX -

1.1. Estate tax clearance shall be issued by the RDO where the decedent was domiciled or registered, regardless of the location of his properties. If the decedent was domiciled in the pilot RDO, TCL shall be issued. On the other hand, if the decedent was domiciled in a non-Pilot RDO, the old form for CAR shall be issued.

1.2. In cases where the estate tax return of a non-resident decedent was filed with the Philippine Embassy or Consulate in the country where the decedent was a resident at the time of death, and transmitted to RDO No. 51, Pasay City, the CAR shall be issued after verification has been made by the said RDO, or if the return was filed directly with the Office of the Commissioner, then the CAR shall be issued after verification has been made by RDO No. 39, Quezon City.

1.3  If properties left by the decedent are located within the jurisdiction of different RDOs, the Home RDO where the decedent was a resident, or required to be registered shall issue the TCL/CAR. For purposes of registration of the properties, certified true copies of the TCL/CAR shall be issued by the RDO to the administrator/executor/heir for presentation to the concerned Register of Deeds. In this connection, the Home RDO shall secure the necessary report and information regarding the properties located in other revenue districts, especially where there are improvements, for assessment and collection of the correct estate tax due on the transmission of the estate to the heirs.

1.4  The report of verification or audit of the RDO shall be submitted to the Assessment Division for review  After the deficiency estate tax due, if any, has been fully paid, the Confirmation or Termination Letter shall be issued by the Chief, Assessment Division and transmitted to the RDO for issuance of the TCL or CAR.

2. DONOR'S TAX

2.1. Donor's tax return shall be processed and the TCL/CAR shall be issued by the RDO where the donor is a resident or registered.

2.2. If the donor is a non-resident and the donor's tax return is filed with the Philippine Embassy or Consulate in the country where said donor is a resident, or if the return is filed directly with the Office of the Commissioner of Internal Revenue, the CAR shall be issued after the donor's tax return transmitted to RDO No. 51, Pasay City or RDO No. 39, Quezon City, as the case may be, has been verified by said RDOs, and the report reviewed by the Assessment Division Chief, and the Confirmation letter issued.

2.3. If the Deed of Donation covers several properties located in different districts, certified true copies of the TCL/CAR shall be issued to the donor by the RDO concerned.

3. CAPITAL GAINS TAX.

Since as aforestated. Revenue Regulations No. 11-96 was issued in line with the computerized tax administration, the following procedures in the processing of capital gains tax returns and issuance of the corresponding TCL/CAR shall be followed until the mass roll out of all thirteen computerized systems in 1977:

3.1. If the taxpayer is registered with and the property is located in the same Pilot District, Pilot RDO shall process the application and issue the TCL;

3.2. If the taxpayer is registered in one Pilot RDO and the property is located in another Pilot RDO, the Pilot RDO where the taxpayer is registered shall process the application and issue the TCL;

3.3. If the taxpayer is registered with a non-Pilot RDO and the property is located in the pilot RDO, the pilot RDO where the property is located shall process the application and issue the TCL.

The Pilot RDO shall

a) Convert taxpayer's record to ITS by requiring him to fill up a Taxpayer Record Updates (TRU) application;

b) Register capital gains tax and documentary stamp tax only as the taxpayer's tax types (indicate that it is a one-time transaction)

c) Instruct taxpayer to proceed to his authorized agent bank (AAB) to file his capital gains tax return, together with the required attachments, and pay the capital gains and documentary stamp taxes;

d) Process the application and issue TCL.

e) Advise the taxpayer to continue transacting official business with his non-pilot RDO using his old TIN.

In the non-Pilot RDO

During conversion of the non-pilot RDO, update taxpayer's record which will include registration of tax types; non-pilot address will be tagged as "R" (Registered) and records with the pilot RDO will be uploaded at the National ice, then downloaded to the respective RDC.

3.4. If the property is located in a non-Pilot RDO and the taxpayer is registered with a pilot-RDO, the pilot-RDO where the taxpayer is registered shall issued the TCL.

3.5. If the taxpayer is registered with a non-pilot RDO and the property is located in another non-pilot RDO, the non-Pilot RDO where the property is located shall issue the CAR.

3.6. If the document of transfer or assignment involves several properties located in different areas, some in the Pilot RDO and others in Non-Pilot RDOs, and the taxpayer is registered in a Pilot-RDO, the Pilot RDO where the taxpayer is registered shall process the application and issue the TCL. A copy of the Taxpayer Record Update (TRU) duly accomplished by the taxpayer shall be furnished to the Non-Pilot RDO where property transferred is located. Certified true copies of the TCL issued by the Pilot RDO shall be issued to the taxpayer for purposes of registration of the properties located in different areas.

If taxpayer is registered with a non-pilot district, follow the rules laid down in C.3, 4, and 5.

4. The TCL/CAR shall be issued by the RDO within one (1) day from receipt of the Confirmation Letter.

5. Upon full implementation of the tax computerization program and mass roll out of the thirteen (13) computerized systems in 1997, the processing of capital gains tax returns and issuance of TCL shall be issued by the RDO where the taxpayer is registered.

C.

The provisions of existing issuances inconsistent herewith are deemed modified and amended.

E.

EFFECTIVITY.

Adopted: 15 Nov. 1996

(SGD.) LIWAYWAY VINZONS-CHATO
Commissioner