RMC No. 60-2019 — Clarifies the guidelines in determining the tax treatment of transfer of real property by an Economic Zone Developer/Operator duly registered under the Philippine Economic Zone Authority to another PEZA entity, and the documentary requirements for the processing of eCAR

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BUREAU OF INTERNAL REVENUE REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE JUN O'7,2019 3 :is lMTe CA P.M

RECORDS MGT. DIVISION Date: Jure 7. 2019

REVENUE MEMORANDUM CIRCULAR No. 60-2019

SUBJECT : Clarifying the Provisions of Revenue Memorandum Circular (RMC) No. 9-2018 on the Documentary Requirements for the Processing of the Electronic Certificate Authorizing Registration (eCAR)

TO : All Internal Revenue Officers and Others Concerned

documentary requirements for the processing of eCAR under RMC No. 9-2018. transfer of real property by an Economic Zone (Ecozone) Developer/Operator duly registered under the Philippine Economic Zone Authority (PEZA) to another PEZA entity, and the This Circular is hereby issued to clarify the guidelines in determining the tax treatment of

activities are exempt from all national and local taxes, to wit: Economic Zone Act of 1995, as amended by RA No. 8748, PEZA-registered enterprises availing of five percent (5%) final tax on Gross Income Earned (GIE) incentive from their registered Pursuant to Section 24 of Republic Act (RA)No. 7916 otherwise known as Special

taxes on land owned by developers, no taxes, local and national, shall be imposed on business establishments operating within the Ecozone. In lieu thereof, five percent (5%) of the gross income earned by all businesses enterprises within the Ecozone shall be remitted as follows: ' SECTION 24. Exemption from National and Local Taxes- Except for real property

b. Two percent (2%) which shall be directly remitted by the business a. Three percent (3%) to the National Government: establishment to the treasurer's office of the municipality or city where the enterprise is located."

October 1, 2007, the Court of Tax Appeals (CTA) en hanc ruled that the Documentary Stamp Tax 5% preferential tax rate. The CTA held that: (DST), which is a national tax, cannot be imposed on PEZA-registered enterprise availing of the In the case of Conimissioner of Internal Revenue v. Nidec Copal Philippines Corporation dated

uon exceptis. An exception confirns the rule in cases not excepted; that is, a thing not heing excepted must he regarded as coming within the purviere of the general rule." like VAT. When R.A. No. 8748 was enacted to amend R.A. No. 7916, the sume prohihition applied, except for real property taxes that presently are imposed on land owned by developers. inposing local or national taxes on husiness enterprises within the Ecozone. Since the law does not exclude the DST fron prohibition, it is deemed included. Exceptio firmut regulam in casibus GIE under RA. 7916 is in lieu of all taxes. No other national or local tax nay be imposed on a PEZA-registered enterprise availing of this particular fiscal incentive, not even an indirect tux This similar and repeated prohibition is an explicit ratification of the law's intent in not "The Supreme Court has confirmed the rule under R.A. 7916 that the 5 % preferential tax on

of the National Internal Revenue Code (NIRC) of 1997 as amended, may be imposed on PEZA- registered activities. registered enterprises availing of the 5% preferential tax rate on the income earned from their Based on the foregoing, no local and national taxes, including the DST under Section 180

for Acceleration and Inclusion (TRAIN) Law, provided that such sale or disposition is directly likewise enjoying the 5% final tax incentive, both parties are exempt from DST imposed under Developer/Operator enjoying the 5% final tax on GIE to another PEZA-registered enterprise Section 196 of the NIRC, as amended by Republic Act No. 10963 otherwise known as Tax Reform pursuant to their registered activities. In case of a sale of real property located within an ecozone by a PEZA-registered Ecozone

exemption of the transaction for purposes of issuing the eCAR: Accordingly, the following documents shall be required from all parties to support the tax

1. Certified true copy of the latest PEZA Certificate of Registration of the PEZA 3 Certified true copy of PEZA Registration Agreement; and Certified true copy of the following PEZA certificate of available tax incentives as of Ecozone Developer/Operator and the parties to the transaction;

the time of the transaction: a. PEZA Form No. 00-00-01 - Certification on Entitlement of 5% Gross Income b. PEZA Form No. 00-03-01- Certification on Available Incentives Tax; and

Circular as wide a publicity as possible. All revenue officials, employees and others concerned are hereby enjoined to give this

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Commissioner of Internal Revenue CAESAR R. DULAY

I-3/apmd 026115

BREAI OFTNTERNALRCY JUN O'? 2019 NTYY 3: 15P.M 7

RECORDS MGT. DIVISION t}