RMC No. 27-2017 — Clarifies the basis for the imposition of tax on the sale, exchange or other disposition or real property

BUREAU OF INTERNAL REVENUE REPUBLIC OF THE PHILIPPINES DEPArtMEnt OF FinAnCe Quezon City RECORUS MGT PIVIEION EIREAUOF INTERNAL REYENS RECEIVED MAR Z 8 2017.4A 10: D9"A.M UMuCA

March 22, 2017

REVENUE MEMORANDUM CIRCULAR NO 2 H- 3D17

SUBJECT or Other Disposition of Real Property. Ciarifying the Basis for the Imposition of Tax on the Sale, Exchange

TO All Internal Revenue Officers, Employees and Others Concerned.

Or other disposition of real property whether classified as capital asset or ordinary asset. This Circular is issued to clarify the basis for the imposition of tax on the sale, exchange

National Internal Revenue Code of 1997, has provided for the following: Section 6(E) of Republic Act (RA) 8424, Tax Reform Act of 1997, also known as the

Additional Reguirements for Tax Administration and Enforcement. - "SEC. 6. Power of the Commissioner to Make Assessments and Prescribe

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or areas and shall, upon consultation with competent appraisers both from the of the property shall be, whichever is the higher of. private and public sectors, determine the fair market value of real properties located in each zone or area. For purposes of computing any internal revenue tax, the value The Commissioner is hereby authorized to divide the Philippines into different zones (E) Authority of the Commissioner to Prescribe Reai Property Values.

Provincial and City Assessors. " (l) The fair market value as determined by the Commissioner; or (2) The fair market value as shown in the schedule of values of the

implemented by Revent'e Regulations Nos. 2-98 and 7.2003, provide that it shali be baser: on the Code. whichever is higher. gross selling price or current fair market value as determined in accordance with Sec. 6(i) of the For purposes of imposing the tax Sec. 24(D)(l) and 27(D)(5) of the same Act, as

From the aforesaid provisions, nothing in the Code or any of its implementing guidelines

provide for the application of a comparative sale or any other tax base. Thus, in no case shall

revenue officials or employees appiy any other basis for the imposition of capital gains tax/income

tax/withholding tax on sale, exchange or other disposition of real property except as herein

provided as it has no legal basis.

All internal revenue officials and employees are enjoined to give this Circular as wide a

publicity as possible.

A

CAESAR R. DULAY Commissioner of Internal Revenue

E 004556

DCU CT ITERA RTNE RECORDS MGT DIVISION 10: 69 A. M

MAR 2.8 2017 UM RECEIVEM