Recently, the bureau has issued Revenue Memorandum Circular (RMC) No. 27-2017 to clarify the basis for the imposition of tax on the sale, exchange or other disposition of real property whether classified as capital asset or ordinary asset.
It is stated in Section 6(E) of Republic Act (RA) 8424, Tax Reform Act of 1997, also known as the National Internal Revenue Code of 1997, has provided the following:
"SEC. 6. Power of the Commissioner to Make Assessment and Prescribe Additional Requirements for Tax Administration and Enforcement. -
XXX XXX XXX
(E) Authority of the Commissioner to Prescribe Real Property Values. - The Commissioner is hereby authorized to divide the Philippines into different zones or areas and shall, upon consultation with competent appraisers both from the private and public sectors, determine the fair market value of real properties located in each zone area. For purposes of computing any internal revenue tax, the value of the property shall be, whichever is the higher of:
(1) The fair market value as determined by the Commissioner; or
(2) The fair market value as shown in the schedule of values of the Provincial and City Assessors."
For purposes of imposing the tax Sec. 24(D)(1) and 27(D)(5) of the same Act, as implemented by Revenue Regulations Nos. 2-98 and 7-2003, provide that it shall be based on the gross selling price or current fair market value as determined in accordance with Sec. 6(E) of the Code, whichever is higher.
Please refer: http://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/RMC%20No%2027-2017.pdf of the full text of RMC No. 27-2017.
No comments:
Post a Comment