Tax Notes: Clarifying tax treatment on transfer of real property between Peza entities

THE Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular (RMC) 60-2019 to clarify the tax treatment of transfer of real property by an economic zone (ecozone) developer/operator duly registered under the Philippine Economic Zone Authority (Peza) to another Peza entity.

Sales of real property within an ecozone by a Peza-registered ecozone developer/operator that enjoy the five percent final tax on gross income to another Peza-registered enterprise likewise enjoy the five percent final tax incentive. Both parties are exempt from documentary stamp tax imposed under Section 196 of the Tax Code, as amended by the Tax Reform for Acceleration and Inclusion Law, provided that such sale is directly pursuant to their registered activities.

Accordingly, the following documents shall be required from all parties to support the tax exemption of the sale transaction to issue the electronic Certificate Authorizing Registration:

1. Certified true copy of the latest Peza Certificate of Registration of the Peza ecozone developer/operator and the parties to the transaction;

2. Certified true copy of Peza registration agreement; and

3. Certified true copy of the following Peza certificate of available tax incentives as of the time of the transaction:

a. Peza Form 00-00-01 – Certificate on Entitlement of five percent gross Income Tax; and

b. Peza Form 00-03-01 – Certificate on Available Incentives.

Please be guided accordingly.

Source: P&A Grant Thornton

Certified Public Accountants


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