Cordillera Administrative Region's Request for Exemption from Application of RMO No. 17-97

May 18, 1999 BIR RULING NO. 068-99 RR 8-98-000-00-068-99 Cordillera Regional Assembly No. 40 CRA Building, CRA-CAR Compound Harrison Road, Baguio City Attention: Atty . Sergio P . Kawi, MNSA CRA Chairman Gentlemen : This refers to Resolution No. 98-24 which was forwarded to the Department of Finance and in turn was referred to this office by Undersecretary Solomon Cua, bearing on your request for the exemption of the Cordillera Administrative Region from the application of Revenue Memorandum Order No. 17-97 which requires, among others, that the tax return and all taxes due on the transaction involving transfer of real property ( i.e. capital gains or creditable withholding tax, documentary stamp tax) should be filed and paid in the RDO where the seller-transferor is registered. You state that land use and real estate development is a booming industry in the CAR which is patronized by non-Baguio residents; that most of the owners and developers of the land resources are taxpayers registered outside the territorial jurisdiction of the CAR and that the implementation of RMO No. 17-97 will deprive the region of its internal revenue collection from capital gains tax, withholding and documentary stamp taxes amounting to hundreds of millions of pesos; hence, the continued implementation of RMO No. 17-97 would be detrimental to the economic growth momentum of the region. In connection therewith, please be informed that Revenue Regulations No. 8-98 dated August 25, 1998 has already repealed, amended or modified any revenue regulations, memorandum order, circular or any other issuance of the Bureau of Internal Revenue regarding the date and venue for the filing of capital gains tax returns and payment of taxes on transactions involving real properties classified as capital assets and likewise the date and venue for the filing and payment of creditable withholding tax on transactions involving real properties classified as ordinary assets. Thus, in the case of sale or disposition of a capital asset , the Capital Gains Tax Return shall be filed by the seller and payment made to an Authorized Agent Bank (AAB) located within the Revenue District Office having jurisdiction over the place where the property being transferred is located (Sec. 3, Rev. Regs. No. 6-98). On the other hand, the creditable withholding taxes deducted and withheld by the withholding agent/buyer on the sale, transfer or exchange of real property classified as ordinary asset shall be paid upon filing of the return with the Authorized Agent Bank located within the Revenue District Office having jurisdiction over the place where the property being transferred is located within ten (10) days following the end of the month in which the transaction occurred (Sec. 5, Rev. Regs. No. 8-98). Accordingly, your Resolution No. 98-24 calling for the non-implementation of Revenue Memorandum Order No. 17-97 has been rendered moot and academic by Revenue Regulations No. 8-98. Very truly yours, (SGD.) BEETHOVEN L. RUALO Commissioner of Internal Revenue