Tag Archives

Archive of posts published in the category: Tax
Apr
21

How to Secure A BIR Certificate Authorizing Registration (CAR) And Tax Clearance For The Sale Of Real Property Classified As A Capital Asset

One of the most important documents that you need in order to transfer a title of a property from the seller to the buyer is the Certificate Authorizing Registration (CAR) and Tax Clearance (TCL) from the Bureau of Internal Revenue (BIR). In this post, I’ll share a step-by-step on how to secure them.

The CAR and TCL is your proof that the proper taxes on the transaction have been paid. The Register of Deeds requires the presentation of these documents as a pre-requisite for title transfer. See sample CAR below, which is from one of my husband’s transactions (with details blurred out).

What is the process?

The first step is to have a notarized document evidencing the sale of the real property classified as a capital asset, usually a Deed of Absolute Sale. You may find samples of this document through google, including here and here.

Next, the taxes need to be paid. You may refer to previous posts on Capital Gains Tax (CGT) and Documentary Stamps Tax (DST).

After you have paid the taxes, you need to request for the issuance of a CAR and TCL from the Revenue District Office where the real property is located. You need to submit the documents supporting the transaction, as well as proof that the correct taxes (both the type of tax and amount of tax), have been paid. The Checklist of Documentary Requirements is in the annexes of Revenue Memorandum Order (RMO) No. 15-03, in particular, Annex “A”. For additional documents, refer to Revenue Memorandum Circular (RMC) No. 76-07 dated October 25, 2007.

The process flowchart is in Annex “L” of the Annexes of RMO 15-03.

Please take note that the CAR for the transfer of real property shall be released by the Revenue District Office (RDO) where the real property is located. Thus, it is important for you to determine the correct RDO since you will be paying the taxes in the Authorized Agent banks (AAB’s) of such RDO.

It is possible that you may think a property falls under the jurisdiction of one RDO when in fact it is under another RDO. If you have already paid the taxes in an AAB of another RDO, you may have to undergo certain processes to transfer your payments to the correct RDO. So, my advice is to look at the map of the coverage of each RDO (there should be a big map at the RDO) to check if indeed the property falls within the jurisdiction of the said RDO.

Mandatory Requirements

For a sale of real property considered as a capital asset subject to capital gains tax (CGT), the mandatory requirements are as follows:

  • Tax Identification Number (TIN) of buyer and seller [If one of them does not have a TIN, get a TIN by filling out and submitting BIR Form No. 1904]
  • Notarized Deed of Absolute Sale/Document of Transfer. Bring the original and at least two photocopies. The photocopies will be compared against the original and the BIR will
Apr
17

Vehicle Tax Exemption – United States Department of State

The Office of Foreign Missions (OFM) enforces the exemption of eligible foreign missions and their members from payment of any taxes when purchasing, leasing, registering or titling a vehicle. The following procedures are associated with requesting and obtaining a tax exemption on purchases or leases of official or personal motor vehicles by eligible foreign missions and their members in the United States. A “motor vehicle” is defined as any self-propelled vehicle, including but not limited to automobiles, motorcycles, boats, and aircraft.

The exemption of sales and use taxes imposed on purchases or leases of motor vehicles in the United States on the basis of the diplomatic or consular status or accreditation of the purchasing foreign mission or accredited mission member and their dependents is solely authorized via the issuance of a Motor Vehicle Tax-Exemption Letter by the Department’s Office of Foreign Missions (OFM) to the seller or lessor of such motor vehicle. Note that Diplomatic Tax Exemption Cards are not valid for exemption from taxes imposed on purchases of motor vehicles.

Therefore, prior to finalizing a purchase or lease of a motor vehicle, all foreign missions and their accredited members must instruct the seller/lessor to directly contact OFM during normal business hours to request the issuance of a Motor Vehicle Tax-Exemption Letter.

Motor vehicle sellers/lessors may make such requests by electronic mail or telephone.

Sellers/lessors in Maryland, Virginia, or the District of Columbia should direct requests to OFMTaxCustoms@state.gov. Sellers/lessors outside this area should direct requests to the nearest OFM Regional Office:

Sellers/lessors must provide the following information to OFM:

1. The seller/lessor’s name, mailing address, and telephone and fax numbers;

2. The color, year, make, and model of the motor vehicle that the mission or accredited mission member is planning to acquire; and

3. For official motor vehicles: the name of the foreign mission that is purchasing or leasing a motor vehicle; or

4. For personal motor vehicles: the name (as it appears on their current “A or G series” visa) of the accredited mission member or their dependent who is purchasing or leasing a motor vehicle, the name of the foreign mission to which the individual is assigned, and the individual’s Department-issued Personal Identification Number (PID). (Note that individuals must present proof of accreditation to the seller/lessor – i.e., valid passport which contains their current “A or G series” visa, or Department-issued protocol identification card, or Department-issued driver’s license, or Department-issued Diplomatic Tax Exemption Card.)

OFM strives to transmit Motor Vehicle Tax-Exemption Letters to the requesting seller/lessor by either electronic mail or facsimile within two hours of receiving the request.

Sellers/lessors are required to send all original ownership documents directly to OFM so that the motor vehicle can be properly registered and titled. Auto dealerships and state motor vehicle administrations should treat this transaction as an out of state registration. OFM will issue a registration card and federal license plates once proper documentation is received. Also, a title will be sent to the indicated lien holder to protect