Final Capital Gains Tax for Onerous Transfer of Real Property Classified as Capital Assets (Taxable and Exempt)
TAX FORM
BIR Form 1706 – Final Capital Gains Tax Return (For Onerous Transfer of Real Property Classified as Capital Assets -Taxable and Exempt)
DOCUMENTARY REQUIREMENTS
1) One original copy and one photocopy of the Notarized Deed of Sale or Exchange
2) Photocopy of the Original Certificate of Title; Transfer Certificate of Title; or Condominium Certificate of Title in case of a condo unit
3) Certified True Copy of the tax declaration on the lot and/or improvement during nearest time of sale
4) “Certificate of No Improvement” issued by the Assessor’s office where the property has no declared improvement, if applicable or Sworn Declaration/Affidavit of No Improvement by at least one (1) of the transferees
5) Copy of BIR Ruling for tax exemption confirmed by BIR, if applicable
6) Duly approved Tax Debit Memo, if applicable
7) “Sworn Declaration of Intent” as prescribed under Revenue Regulations 13-99, if the transaction is tax-exempt
8) Documents supporting the exemption
Additional requirements may be requested for presentation during audit of the tax case depending upon existing audit procedures.
TAX FORM
BIR Form 1706 – Final Capital Gains Tax Return (For Onerous Transfer of Real Property Classified as Capital Assets -Taxable and Exempt)
DOCUMENTARY REQUIREMENTS
1) One original copy and one photocopy of the Notarized Deed of Sale or Exchange
2) Photocopy of the Original Certificate of Title; Transfer Certificate of Title; or Condominium Certificate of Title in case of a condo unit
3) Certified True Copy of the tax declaration on the lot and/or improvement during nearest time of sale
4) “Certificate of No Improvement” issued by the Assessor’s office where the property has no declared improvement, if applicable or Sworn Declaration/Affidavit of No Improvement by at least one (1) of the transferees
5) Copy of BIR Ruling for tax exemption confirmed by BIR, if applicable
6) Duly approved Tax Debit Memo, if applicable
7) “Sworn Declaration of Intent” as prescribed under Revenue Regulations 13-99, if the transaction is tax-exempt
8) Documents supporting the exemption
Additional requirements may be requested for presentation during audit of the tax case depending upon existing audit procedures.
PROCEDURES
File the Capital Gains Tax return in triplicate (two copies for the BIR and one copy for the taxpayer) with the Authorized Agent Bank (AAB) in the Revenue District where the property is located. In places where there are no AAB, the return will be filed directly with the Revenue Collection Officer or Authorized City or Municipal Treasurer.
One-Time Transaction (ONETT) taxpayers shall mandatorily use the eBIRForms in filing all of their tax returns. They may opt to submit their tax returns manually using the eBIRForms Offline Package in the RDO where the property is located or electronically through the use of the Online eBIRForms System. (Sec. 3(2) RR No. 6-2014)
TAX RATES
For real property - 6%.
One-Time Transaction (ONETT) taxpayers shall mandatorily use the eBIRForms in filing all of their tax returns. They may opt to submit their tax returns manually using the eBIRForms Offline Package in the RDO where the property is located or electronically through the use of the Online eBIRForms System. (Sec. 3(2) RR No. 6-2014)
TAX RATES
For real property - 6%.
BASIS IN THE VALUATION OF PROPERTY
The value of the real property will be based on the selling price, fair market value as determined by the Commissioner (zonal value) or the fair market value as shown in the schedule of values of the Provincial or City Assessor, whichever is higher.
If there is no zonal value, the taxable base is whichever is higher of the gross selling price per sales documents or the fair market value that appears in the latest tax declaration.
If there is an improvement, the FMV per latest tax declaration at the time of the sale or disposition, duly certified by the City/Municipal Assessor shall be used. No adjustments shall be added on the said value, provided that the tax declaration bears the upgraded fair market value of the said property pursuant to Section 219 of R.A. No. 7160, otherwise known as the Local Government Code of 1991 and the last paragraph of the Local Assessment Regulations No. 1-92 dated October 6, 1992.
In case the tax declaration being presented was issued three (3) or more years prior to the date of sale or disposition of the real property, the seller/transferor shall be required to submit a certification from the City/Municipal Assessor whether or not the same is still the latest tax declaration covering the said real property. Otherwise, the taxpayer shall secure its latest tax declaration and shall submit a copy thereof duly certified by the said Assessor. (RAMO 1-2001).
DEADLINE
If there is no zonal value, the taxable base is whichever is higher of the gross selling price per sales documents or the fair market value that appears in the latest tax declaration.
If there is an improvement, the FMV per latest tax declaration at the time of the sale or disposition, duly certified by the City/Municipal Assessor shall be used. No adjustments shall be added on the said value, provided that the tax declaration bears the upgraded fair market value of the said property pursuant to Section 219 of R.A. No. 7160, otherwise known as the Local Government Code of 1991 and the last paragraph of the Local Assessment Regulations No. 1-92 dated October 6, 1992.
In case the tax declaration being presented was issued three (3) or more years prior to the date of sale or disposition of the real property, the seller/transferor shall be required to submit a certification from the City/Municipal Assessor whether or not the same is still the latest tax declaration covering the said real property. Otherwise, the taxpayer shall secure its latest tax declaration and shall submit a copy thereof duly certified by the said Assessor. (RAMO 1-2001).
DEADLINE
Within 30 days after each sale, exchange, transfer or other disposition of real property.
