Sie sind auf Seite 1von 4

Capital

Gains Tax is a tax imposed on the gains presumed to


have been realized by the seller from the sale, exchange, or
other disposition of capital assets located in the Philippines,
including pacto de retro sales and other forms of conditional
sale.


Frequently Asked Questions
1) What is meant by capital asset?
Capital asset means property held by the taxpayer (whether
or not connected with his trade or business), but does not
include
a) stock in trade of the taxpayer or other property of a kind
which would properly be included in the inventory of the
taxpayer if on hand at the close of the taxable year; or
b) property held by the taxpayer primarily for sale to
customers in the ordinary course of his trade or business; or
c) property used in the trade or business of a character which
is subject to the allowance for depreciation provided in
subsection (F) of Sec. 34 of the Code; or
d) real property used in trade or business of the taxpayer.

2) What is meant by ordinary asset?
Ordinary asset refers to all properties specifically excluded
from the definition of capital assets under Sec. 39 (A)(1) of
the NIRC.

3.) What is meant by "Stock classified as Capital Asset"? (Sec
2(a) of RR 6-2008)
This refers to stocks and securities held by taxpayers other
than dealers in securities.

4.) What is meant by "Dealer in Securities"? (Sec 2(b) of RR 6-
2008)
Dealer in Securities refers to a merchant of stocks or
securities, whether an individual, partnership or corporation,
with an established place of business, regularly engaged in
the purchase of securities and the resale thereof to
customers; that is one, who as merchant buys securities and
re-sells them to customers with a view to the gains and
profits that may be derived therefrom. "Dealer in securities"
means any person who buys and sells securities for his/her
own account in the ordinary course of business (Sec. 3.4,
SRC).

5.) What is meant by real property?
Real property shall have the same meaning attributed to that
term under Article 415 of Republic Act No. 386, otherwise
known as the Civil Code of the Philippines.

6.) What does a real estate dealer refer to?
A real estate dealer refers to any person engaged in the
business of buying and selling or exchanging real properties
on his own account as a principal and holding himself out as a
full or part-time dealer in real estate.
7.) What does a real estate developer refer to?
Real estate developer refers to any person engaged in the
business of developing real properties into subdivisions, or
building houses on subdivided lots, or constructing
residential or commercial units, townhouses and other
similar units for his own account and offering them for sale
or lease.

8.)What does a real estate lessor refer to?


Real estate lessor refers to any person engaged in the
business of leasing or renting real properties on his own
account as a principal and holding himself out as a lessor of
real properties being rented out or offered for rent.

9.) Who are considered engaged in the real estate business?
Taxpayers who are considered engaged in the real estate
business refer collectively to real estate dealers, real estate
developers and/or real estate lessors. A taxpayer whose
primary purpose of engaging in business, or whose Articles of
Incorporation states that its primary purpose is to engage in
the real estate business shall be deemed to be engaged in
the real estate business.

10.) Who are considered not engaged in the real estate
business?
Taxpayers who are considered not engaged in the real estate
business refer to persons other than real estate dealers, real
estate developers and/or real estate lessors.

11.) Who are considered habitually engaged in the real estate
business?
Real estate dealers or real estate developers who are
registered with the Housing and Land Use Regulatory Board
(HULRB) or HUDCC

12.) How can you determine whether a particular real
property is a capital asset or an ordinary asset?
a) Real properties shall be classified with respect to taxpayers
engaged in the real estate business as follows:
i) All real properties acquired by the real estate dealer shall
be considered as ordinary assets.
ii) All real properties acquired by the real estate developer,
whether developed or undeveloped as of the time of
acquisition, and all real properties which are held by the real
estate developer primarily for sale or for lease to customers
in the ordinary course of his trade or business or which
would properly be included in the inventory of the taxpayer if
on hand at the close of the taxable year and all real
properties used in the trade or business, whether in the form
of land, building, or other improvements, shall be considered
as ordinary assets.
iii) All real properties of the real estate lessor, whether land,
building and/or improvements, which are for lease/rent or
being offered for lease/rent, or otherwise for use or being
used in the trade or business shall likewise be considered as
ordinary assets.
iv) All real properties acquired in the course of trade or
business by a taxpayer habitually engaged in the sale of real
property shall be considered as ordinary assets.

Note: Registration with the HLURB or HUDCC as a real estate
dealer or developer shall be sufficient for a taxpayer to be
considered as habitually engaged in the sale of real estate.

If the taxpayer is not registered with the HLURB or HUDCC as
a real estate dealer or developer, he/it may nevertheless be
deemed to be engaged in the real estate business through
the establishment of substantial relevant evidence (such as
consummation during the preceding year of at least six (6)
taxable real estate sale transactions, regardless of amount;
registration as habitually engaged in real estate business with

the Local Government Unit or the Bureau of Internal


Revenue, etc.

A property purchased for future use in the business, even
though this purpose is later thwarted by circumstances
beyond the taxpayers control, does not lose its character as
an ordinary asset. Nor does a mere discontinuance of the
active use of the property change its character previously
established as a business property. (Sec 3(a)(4)of RR 7-2003)

b) In the case of taxpayer not engaged in the real estate
business, real properties, whether land, building, or other
improvements, which are used or being used or have been
previously used in trade or business of the taxpayer shall be
considered as ordinary assets.

c) In the case of taxpayers who changed its real estate
business to a non-real estate business, real properties held
by these taxpayer shall remain to be treated as ordinary
assets.

d) In the case of taxpayers who originally registered to be
engaged in the real estate business but failed to
subsequently operate, all real properties acquired by them
shall continue to be treated as ordinary assets.

e) Real properties formerly forming part of the stock in trade
of a taxpayer engaged in the real estate business, or formerly
being used in the trade or business of a taxpayer engaged or
not engaged in the real estate business, which were later on
abandoned and became idle, shall continue to be treated as
ordinary assets. Provided however, that properties classified
as ordinary assets for being used in business by a taxpayer
engaged in business other than real estate business are
automatically converted into capital assets upon showing
proof that the same have not been used in business for more
than two years prior to the consummation of the taxable
transactions involving said properties

f) Real properties classified as capital or ordinary asset in the
hands of the seller/transferor may change their character in
the hands of the buyer/transferee. The classification of such
property in the hands of the buyer/transferee shall be
determined in accordance with the following rules:

i) Real property transferred through succession or donation
to the heir or donee who is not engaged in the real estate
business with respect to the real property inherited or
donated, and who does not subsequently use such property
in trade or business, shall be considered as a capital asset in
the hands of the heir or donee.

ii) Real property received as dividend by the stockholders
who are not engaged in the real estate business and who do
not subsequently use such property in trade or business,
shall be considered as a capital asset in the hands of the
recipients even if the corporation which declared the real
property dividends is engaged in real estate business.

iii) The real property received in an exchange shall be treated
as ordinary asset in the hands of the case of a tax-free
exchange by taxpayer not engaged in real estate business to
a taxpayer who is engaged in real estate business, or to a

taxpayer who, even if not engaged in real estate business,


will use in business the property received in exchange.

g) In the case of involuntary transfers of real properties,
including expropriations or foreclosure sale, the
involuntariness of such sale shall have no effect on the
classification of such real property in the hands of the
involuntary seller, either as capital asset or ordinary asset as
the case may be.

13.) What is the 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)

For shares of stocks, it will be based on the net capital gains
realized from the sale, barter, exchange or other disposition
of shares of stocks in a domestic corporation, considered as
capital assets not traded through the local stock exchange.

14.) What is meant by "Net Capital Gains"? (Sec 2(o) of RR 6-
2008)
"Net Capital Gain" means the excess of the gains from sales
or exchanges of capital assets over the losses from such sales
or exchanges.

15.) What are the rules for the determination of amount and
recognition of gain or loss in the sale, barter, or exchange of
shares of stock not traded through the Local Stock exchange?
(Sec 7(c ) of RR 6-2008)

(A.) Determination of Selling Price. In determining the
selling price, the following rules shall apply:

(a.1) In the case of cash sale, the selling price shall be the
total consideration per deed of sale.

(a.2) If the total consideration of the sale or disposition

consists partly in money and partly in kind, the selling price


shall be sum of money and the fair market value of the
property received. (a.3) In the case of exchange, the selling
price shall be the fair market value of the property
received. (a.4) In case the fair market value of the shares of
stock sold, bartered, or exchanged is greater than the
amount of money and/or fair market value of the property
received, the excess of the fair market value of the shares of
stock sold, bartered or exchanged over the amount of money
and the fair market value of the property, if any, received as
consideration shall be deemed a gift subject to the donor's
tax under sec. 100 of the Tax Code, as amended.

(B.) Definition of "fair market value" of the Shares of Stock.

(b.1) In the case of listed shares which were sold, transferred
or exchanged outside of the trading system and/or facilities
of the Local Stock Exchange, the closing price on the day
when the shares are sold, transferred, or exchanged. When
no sale is made in the Local Stock Exchange on the day when
the Listed shares are sold, transferred, or exchanged, the
closing price on the day nearest to the date of sale, transfer
or exchange of the shares shall be the fair market value. Sec
2 of RR 6-2013

(b.2) In the case of shares of stock not listed and traded in
the local stock exchanges, the value of the shares of stock at
the time of sale shall be the fair market value. In determining
the value of the shares, the Adjusted Net Asset Method shall
be used whereby all assets and liabilities are adjusted to fair
market values. The net of adjusted asset minus the liability
values is the indicated value of the equity.

The appraised value of real property at the time of sale shall
be the higher of
(1) The fair market value as determined by the
Commissioner, or
(2) The fair market value as shown in the schedule of valued
fixed by the Provincial and City Assessors, or
(3) The fair market value as determined by Independent
Appraiser.
(b.3) In the case of a unit of participation in any association,
recreation or amusement club (such as golf, polo, or similar
clubs), the fair market value thereof shall be its selling price
or the bid price nearest published in any newspaper or
publication of general circulation, whichever is higher.

(C.) Determination of Gain or Loss from Sale or Disposition of
Shares of Stock. The gain from the sale or other
disposition Stock. The gain from the sale or other
disposition of shares of stock shall be the excess of the
amount realized therefrom over the basis or adjusted basis
for determining gain, and the loss shall be the excess of the
basis or adjusted basis for determining loss over the amount
realized. The amount realized from the sale or other
disposition of property shall be the sum of money received
plus the fair market value of the property (other than money)
received, if any.

16.) What are the applicable tax rates of Capital Gains Tax
under the National Internal Revenue Code of 1997?
a) Real Properties - 6 %
b) For Shares of Stocks not Traded in the Stock Exchange, on

the net Capital Gains


- Not over P100,000 - 5%
- Any amount in excess of P100,000 - 10%

17.) Who are required to file the Final Capital Gains Tax
return?
Every person, whether natural or juridical, resident or non-
resident, including estates and trusts, who sells, transfers,
exchanges or disposes real properties located in the
Philippines classified as capital assets, including pacto de
retro sales and other forms of conditional sales or shares of
stocks in domestic corporations not traded through the local
stock exchange classified as capital assets.

18.) What is the procedure in the filing of Final Capital Gains
Tax return?
File the Final 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 seller or transferor is registered, for shares of stocks or
where the property is located, for real property. In places
where there are no AAB, the return will be filed directly with
the Revenue Collection Officer or Authorized City or
Municipal Treasurer.

19.) Who/what are considered exempt from the payment of
Final Capital Gains Tax?

Dealer in securities, regularly engaged in the


buying and selling of securities

An entity exempt from the payment of income


tax under existing investment incentives
and other special laws

An individual or non-individual exchanging real


property solely for shares of stocks
resulting in corporate control

A government entity or government-owned or


controlled corporation selling real property

If the disposition of the real property is gratuitous


in nature

Where the disposition is pursuant to the CARP


law

20.) Who are conditionally exempt from the payment of Final
Capital Gains Tax?
Natural persons who dispose their principal residence,
provided that the following criteria are met:

The proceeds of the sale of the principal


residence have been fully utilized in
acquiring or constructing new principal
residence within eighteen (18) calendar
months from the date of sale or
disposition;

The historical cost or adjusted basis of the real


property sold or disposed will be carried
over to the new principal residence built or
acquired;

The Commissioner has been duly notified,


through a prescribed return, within thirty
(30) days from the date of sale or
disposition of the persons intention to
avail of the tax exemption;

Exemption was availed only once every ten (10)


years; and

There is no full utilization of the proceeds of sale


or disposition. The portion of the gain
presumed to have been realized from the
sale or disposition will be subject to Capital
Gains Tax.
In case of sale/transfer of principal residence, the
Buyer/Transferee shall withhold from the
seller and shall deduct from the agreed
selling price/consideration the 6% capital
gains tax which shall be deposited in cash
or managers check in interest-bearing
account with an Authorized Agent Bank
(AAB) under an Escrow Agreement
between the concerned Revenue District
Officer, the Seller and the Transferee, and
the AAB to the effect that the amount so
deposited, including its interest yield, shall
only be released to such Transferor upon
certification by the said RDO that the
proceeds of the sale/disposition thereof
has, in fact, been utilized in the acquisition
or construction of the Seller/Transferors
new principal residence within eighteen
(18) calendar months from date of the said
sale or disposition. The date of sale or
disposition of a property refers to the date
of notarization of the document evidencing
the transfer of said property. In general,
the term Escrow means a scroll, writing
or deed, delivered by the grantor, promisor
or obligor into the hands of a third person,
to be held by the latter until the happening
of a contingency or performance of a
condition, and then by him delivered to the
grantee, promise or obligee.


21.) What is a Certificate Authorizing Registration?
Certificate Authorizing Registration (CAR) is a certification
issued by the Commissioner or his duly authorized
representative attesting that the transfer and conveyance of
land, buildings/improvements or shares of stock arising from
sale, barter or exchange have been reported and the taxes
due inclusive of the documentary stamp tax, have been fully
paid.
With the implementation of the Electronic Certificate
Authorizing Registration (eCAR) System, the CAR shall now be
electronically generated.

22.) What is eCAR System?
eCAR stands for Electronic Certificate Authorizing
Registration. A web-based facility that automates the
generation of CAR with barcode, eCAR will also enable
electronic linkage between the BIR and the Land Registration
Authority. (Participant Guide)
eCARs shall have a validity of one (1) year from date of issue.
For other manually issued CARs that are outstanding and not
yet presented to the Register of Deeds, i.e., CARs more than
one (1) year from the date of issuance which are due for
revalidation and expired CARs which are more than two (2)
years from the date of issuance, are not anymore valid for
presentation to the Registry of Deeds. The said CARs shall be
replaced with an eCAR by the concerned Revenue District
Offices or Large Taxpayers Divisions. A certification fee shall

be charged for each released eCAR issued/reprinted after


affixture of P15.00 Documentary Stamp Tax on Certificates
(Sec 188 of the NIRC of 1997) and the prescribed Certification
Fee of One Hundred Pesos (P100.00) under Executive Order
No. 197 to the taxpayer/authorized representative.

23.) How do we determine the fair market value of shares of
stocks not traded through the Local Stock Exchange?
In determining the value of the shares, the Adjusted Net
Asset Method shall be used whereby all assets and liabilities
are adjusted to fair market values. The net of adjusted asset
minus the adjusted liability value is the indicated value of the
equity.
For purposes of this item, the appraised value of real
property at the time of sale shall be the highest among the
following:
(a) The fair market value as determined by the
Commissioner, or
(b) The fair market value as shown in the schedule of values
fixed by the Provincial and City Assessors, or
(c) The fair market value as determined by Independent
Appraiser. (RR NO. 6-2013)