RMO No. 33-2023 — Reiterates Section 3.J of RR No. 17-2003 on the withholding of taxes for the sale of real property on installment plan

REPUBLIC OF THE PHILIPPINES

DEPARTMENT OF FINANCE BUREAU OF INTERNAL REVENUE

Quezon City

Date SEP 2 9 2023

REVENUE MEMORANDUM 0RDER NO. 33 - 20 & 3

SUBJECT : Reiteration of Section 3.J of Revenue Regulations No. 17-2003 on the Withholding of Taxes for the Sale of Real Property on Installment Plan

TO All Internal Revenue Officers, Employees and Others Concerned

I.. BACKGROUND

tax due on the sale, transfer, or exchange of real property including penalties, if any, has been fully mandated to strictly monitor all installment sale transactions of real properties and in no case that an electronic Certificate Authorizing Registration (eCAR) be issued to the buyer unless the withholding Revenue Officers assigned in the processing of One-Time Transaction (ONETT) are

paid.

HI. OBJECTIVE

wherein the payments in the year of sale do not exceed twenty-five percent (25%) of the selling price (RDO) to closely monitor the required tax to be withheld on sale of real property sold on installment under Section 3.J of RR No. 17-2003, to wit: This Order is hereby issued to provide directions to concerned Revenue District Office

seller/owner for the sale, exchange, or transfer of real property classified as ordinary asset. - XXX XXX "Gross selling price or total amount of consideration or its equivalent paid to the

XXX xxX XXX

If the buyer is an individual not engaged in trade or business, the following shall apply:

(() a case, the applicable rate of tax based on the gross selling price or fair market If the sale is a sale of property on the installment plan (i.e. payments in the year is higher, shall be withheld on the last installment or installments immediately tax due, to be paid to the seller until the tax is fully paid. of sale do not exceed twenty-five percent (25%) of the selling price), no withholding is required to be made on the periodic installment payments. In such value of the property at the time of the execution of the contract to sell, whichever prior to such last installment, if the last installment is not sufficient to cover the

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XXX XXX XXX

However, if the buyer is engaged in trade or business, whether a corporation or otherwise, these rules shall apply:

() If the sale is a sale of property on the installment plan [i.e. payments in price], the tax shall be deducted and withheld by the buyer from every the property at the time of the execution of the Contract to Sell, whichever the year of sale do not exceed twenty-five percent (25%) of the selling the consideration against the agreed consideration appearing in the installment which tax shall be based on the ratio of actual collection of Contract to Sell applied to the gross selling price or fair market value of

is higher.

The term 'consideration' refers to the selling price exclusive of interest. Interest earned as an incident of installment payment, if any, shall be subject to the ordinary income tax rate.

(t) XXX XXX XXX

In any case, no Certificate Authorizing Registration (CAR)/Tax Clearance Certificate (TCL), shall be issued to the buyer unless the

has been fully paid. " withholding tax due on the sale, transfer, or exchange of real property

IHI. SANCTION FOR NON-COMPLIANCE

administrative sanctions for inefficiency and incompetence in the performance of official duties as Employees and existing civil service rules and regulations. defined under Section Nos. 11, 14 and 16 of the Revised Code of Conduct for Revenue Officials and Non-compliance with this order shall subject the concerned revenue officer/empioyee to

IV. REPEALING CLAUSE

repealed. All revenue issuances or parts thereof inconsistent with the provisions of this Order are hereby

V EFFECTIVITY

This Order shall take effect immediately.

Y 'GUI, JR.

I-3/apmd Kissioner of Internal Revenue 014920

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