THE general rule is, a final tax of six percent based on the gross selling price or fair market value of the property, whichever is higher, will be imposed on the capital gains presumed to have been realized by the seller from the sale, exchange or disposition of capital asset located in the Philippines, including pacto de retro and conditional sale pursuant to Section 24(D) (1) and 27 (D) (5) of the National Internal Revenue Code of 1997.
The Bureau of Internal Revenue (BIR) recently issued Revenue Memorandum Circular (RMC) No. 35 – 2017 clarifying that the mere issuance of tax declaration in the absence of any sale, exchange or transfer of real property is not subject to capital gains tax (CGT).
The payment of CGT is dependent on the sale, transfer or exchange from which the gain is presumed to have been realized by the seller/transferor.
The circular takes effect immediately.
Source: P&A Grant Thornton