The bureau has issued Revenue Memorandum Order (RMO) No. 25-2016 as a supplement to the guidelines and procedure in the conduct of investigation on the capacity of a party/ies to acquire properties provided for in RMO No. 24-2016.
A paragraph shall be added to Section I Guidelines and Procedures (iii)(b) of Revenue Memorandum Order No. 24-2016, and said subsection shall now read as follow:
"b. Financial capacity of the buyer to acquire the Subject Property shall be determined during the application of CARs and TCLs.
If the buyer/trasferee is proven to have no financial capacity to acquire the Subject Property, the transaction is not a sale but a donation and donor's tax should be imposed and not capital gains tax, and a duly executed Deed of Donation shall be required.
However, if the seller/transferor/assignor is a corporation or is a stranger to the buyer/trasferee of the Subject Property, it shall be presumed that the buyer/trasferee/assignee have earned income that he/she/it did not declare and taxes due thereon where not paid. In addition to any tax due on the seller and it is proven that the buyer/transferee/assignee does not have any financial capacity to purchase the Subject Property, income taxes shall be assessed against the buyer/transferee/assignee on that amount of the consideration for which buyer/transferee/assignee on the amount of the consideration for which buyer/trasferee/assignee cannot show proof that he/she/it has the financial capacity for, on the taxable year when the sale/trasferer/assignment of the Subject Property occurred."
The RMO No. 25-2016 is dated June 12, 2016. This Order shall take effect immediately.
