RR No. 2-2025 — Implementing the tax provisions of Republic Act No. 9267, otherwise known as "The Securitization Act of 2004" (Date Posted: January 8, 2025)

Bringing In Revenues for Nation-Buiiding BUREAU OF INTERNAL REVENUE REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE National Office Building Quezon City JAN 0 9 2025 PILIPINAS BAGONG

REVENUE REGULATIONS NO. 0 0 2 - 2 0 2 5

SUBJECT Otherwise Known as "The Securitization Act of 2004 Impiementing theTax Provisions of Republic Act No. 9267,

TO * All Internal Revenue Officers, Employees and Others Concerned

Code of 1997, as amended ("Tax Code"), these Regulations are issued to implement the tax SECTION 1. Obiective. -- Pursuant to Section 244 of the National Internal Revenue

provisions of Sections 27 to 34 of Title IV of Republic Act (RA) No. 9267, otherwise known as "The Securitization Act of 2004."

terms shall have the following meaning: SECTION 2. Definition of Terms. -- When used in these Regulations, the following

the assets so sold and in accordance with the Securitization Plan. basis by the Seller to a Special Purpose Entity (SPE) and the issuance of asset-backed (a) "Securitization" means the process by which assets are sold on a without recourse securities (ABS) by the SPE which depend, for their payment, on the cash flow from

(b) "Asset-backed securities (ABS)" refer to the certificates issued by an SPE, the repayment of which shall be derived from the cash flow of the assets in accordance with the Securitization Plan.

stream. The term "Assets" shall include, but shall not be limited to, receivables, mortgage loans and other debt instruments: Provided, That receivables that are to Pilipinas (BSP), as the case may be: Provided, further, That the term "Assets" shall (c) "Assets," whether used alone or in the term "Asset-backed securities," refer to Ioans or receivables or other similar financial assets with an expected cash payment by the Securities and Exchange Commission (SEC) or the Bangko Sentral ng arise in the future and other receivables of similar nature shall be subject to approval

exclude receivabies from future expectation of revenues by government, national or local, arising from royalties, fees or imposts.

receive payment of amounts due them under the ABs in accordance with the the marketability .of the ABS and increase the probability that the holders of the ABS Securitization Plan. (d) "Credit Enhancement" means any legally enforceable scheme intended to improve

BIR National Offce Bldg., Senator Miriam Defensor-Santiago Avenye.ilmu eZp Trunktine: 8981-7000 : 8929-7676 Website: www.bir.gov.oh S RECORDS MANAGEMENT DIVISION A3HE itsA

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(e) "Originator" means the person or entity which was the original obligee of the Assets. such as a financial institution that grants a loan or a corporation in the books of which the Assets were created in accordance with the Securitization Plan.

(f) "Securitization Plan" means the plan for securitization as approved by the Commission.

(g) "Seller"" means the person or entity which conveys to the SPE the Assets forming the Asset Pool in accordance with the Securitization Plan. In most instances, the Seller may itself be the Originator.

SECTION 3. Tax Exemption of Transfer of Assets. -- The sale or transfer of assets to the-SPE, including sale or transfer of any and all security interest thereto, made in accordance with the Securitization Plan shall be exempted from value-added tax (VAT) and documentary stamp tax (DST), or any other taxes imposed in lieu thereof.

Moreover, pursuant to Section 28 of RA No. 9267, the transfer of assets by dation in payment (dacion en pago) by the obligor in favor of the obligee shall not be subject to capital gains tax as imposed under Section 27 (D)(5) of the Tax Code.

SECTION 4. Tax Exemption on the Issuance and Transfer of Securities. -- The original issuance of ABS and other securities related solely to such securitization transaction, such as, but not limited to, seller's equity, subordinated debt instruments purchased by the originator. and other related forms of credit enhancement shall be exempt from VAT, or any other taxes imposed in lieu thereof, but shall be subject to DST.

Secondary trades and subsequent transfers of ABS, including all forms of credit enhancement in such instruments, shall be exempt from DST and VAT, or any other taxes imposed in lieu thereof.

shall-be subject to-a twenty percent (20%) final withholding tax. However, the yield or income SECTION 5. Tax Treatment of Income from ABS. - The yield or income from the ABS

of investors from any low cost or socialized housing-related ABS shall be exempt from income tax.

related ABS must be certified as such by the Department of Human Settlements and Urban related receivables of the government housing agencies. The low-cost or socialized housing Such yield or income must come from the securitization of the mortgage and housing-

Development' and the Department of Finance. C) BUREAU OF INTERNALREVENUE RECORDS MANAGEMENT DIVISION E

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Formerly Housing and Urban Development Coordinating Council 2

inconsistent with the provisions of these Regulations are revoked, repealed or amended accordingly. SECTION 6. Repealing Clause. -- Any rules and regulations, issuances or parts thereof

following its publication in the BIR Official Website. SECTION 7. Effectivity. -- These Regulations shall take effect -fifteen (15) days

RAH! GRT c Secfetary bf Finance DEc/1 1 2024 An

Recommending Approval:

rer of Internal Revenue TYA UT,JR .- Tr GEMENI FRMA - DIVIsi 1

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K- DANELKARULAN YA'T ME ID:'S A TIMe:

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