Policies, Guidelines and Procedures Implementing the Memorandum of Understanding (MOU) between the Home Development Mutual Fund (HDMF) and the Bureau of Internal Revenue (BIR) in Electronic Filing of Tax Returns thru Electronic Bureau of Internal Revenue Forms (eBIRForms) and Issuance of Electronic Certificate Authorizing Registration (eCAR)

June 21, 2016 REVENUE MEMORANDUM ORDER NO. 028-16 SUBJECT : Policies, Guidelines and Procedures Implementing the Memorandum of Understanding (MOU) between the Home Development Mutual Fund (HDMF) and the Bureau of Internal Revenue (BIR) in Electronic Filing of Tax Returns thru Electronic Bureau of Internal Revenue Forms (eBIRForms) and Issuance of Electronic Certificate Authorizing Registration (eCAR) TO : All Internal Revenue Officials, Employees and Others Concerned The HDMF referred hereafter as Pag-IBIG Fund and the BIR agreed to work together to provide the necessary support for the use of Electronic Bureau of Internal Revenue Forms (eBIRForms) in the Pag-IBIG Fund's provident and housing loan program and issuance of electronic Certificate Authorizing Registration (eCAR). SECTION 1. Objectives. This Order is aimed to: 1. Prescribe policies, guidelines and procedures to authorize Pag-IBIG Fund to electronically file tax returns (BIR Form Nos. 1606, 1706, 2000-OT, 0605) using eBIRForms and to secure the eCAR in behalf of their member-borrowers; 2. Provide the necessary support and assistance for the use of eBIRForms and computation of related taxes, submission of documents and verification of status of Pag-IBIG account through a special lane, for the issuance of the eCAR; and 3. Improve and accelerate the processing of voluminous transactions of Pag-IBIG Fund which involves the payment of Capital Gains Tax, Documentary Stamp Tax, among others, including the remittance of taxes. SECTION 2. General Policies. 1. The Head Office of Pag-IBIG Fund shall create one HDMF email account for all borrowers before the utilization of the eBIRForms System. HDMF shall provide a copy of the eBIRForms entail confirmation together with the printed copy of the filed return/s to the borrower. CAIHTE 2. An authorized representative of Pag-IBIG Fund shall be delegated by the Chief Executive Officer (CEO) through the issuance of a Special Order. 3. The Pag-IBIG Fund shall secure a written authorization using a Special Power of Attorney (Annex "A") from its member-borrowers to file and remit the taxes payable arising from their transactions with the Pag-IBIG Fund using eBIRForms or other modes of payment ( e.g. , mobile payment, debit system, etc.). A member-borrower has an option to file and pay directly the corresponding tax/es prior to the processing by Pag-IBIG. 4. The Pag-IBIG Fund shall ensure submission of complete documents and remittance of correct taxes based on the evaluation of the transactions/documents filed by their member-borrowers. 5. A special lane shall be provided in every frontline services of the BIR for Pag-IBIG Fund transactions every Tuesday and Thursday. 6. The Revenue District Office (RDO) concerned shall allow the Pag-IBIG Fund to secure the eCAR on behalf of its member-borrowers, following existing policies, guidelines and procedures under RMO Nos. 15-2003 and 22-2016, RMC Nos. 76-2007 and 40-2014. Lists of mandatory Documentary Requirements is prescribed in this issuance (Annex B). The provisions of withholding tax must be complied with, specifically Section 2.57.4 of RR No. 2-98, as amended, where the time of withholding is when paid, or payable, whichever is earlier. Compromise penalties under RMO Nos. 19-2007 or 7-2015 whichever is applicable, and other computation of penalties, if any, shall be in compliance with Section 255 Title X of the Tax Code, as amended. 7. In case of systems downtime and unavailability of the eBIRForms System during deadlines, Pag-IBIG Fund may file the returns printed from the eBIRForms Offline Package manually to the Revenue District Office where the real property is located. However, once the system is available, Pag-IBIG Fund is still required to submit electronically the contents of their manually filed returns within ten (10) days from the date of issuance of announcement of the systems availability thru the BIR website. SECTION 3. Guidelines and Procedures. Pag-IBIG Fund Member-Borrowers shall : 1. Allow the Pag-IBIG Fund Authorized Representative through a Sworn Statement to eFile using eBIRForms System and pay manually the required taxes to the Authorized Agent Banks (AABs) where the real property is located while in the transition to online payment through the Electronic Banking facility of the AABs. 2. Receive eCAR from the Pag-IBIG Fund Authorized Representative. Pag-IBIG Fund shall : 1. Give proper authorization to its Authorized Representative through a Special Order issued by the CEO who shall eFile using the eBIRForms System. 2. Download and install the latest eBIRForms Package from the web through the BIR website at www.bir.gov.ph by clicking the eBIRForms icon. 3. eFile the return of the member-borrower electronically. 3.1 Create a member-borrower Profile by providing a valid Taxpayer Identification Number (TIN), RDO Code, line of business, registered name, registered address, ZIP Code, telephone number and an active email address; 3.2 Choose from the List of BIR Forms then click FILL UP. Re-enter TIN and email address to confirm that the provided information is correct; 3.3 Accomplish the selected tax return then click VALIDATE button. If there are changes to make, click EDIT button. Make sure to click VALIDATE button after every changes made; 3.4 Click SUBMIT/FINAL COPY button: 3.4.1 If the taxpayer is an eBIRForms user, it shall be required to fully and unconditionally agree to the Terms of Service Agreement (TOSA) by clicking AGREE. A system-generated confirmation email shall be sent to the email address used. 3.5 Print the received system-generated notification thru the provided email address acknowledging the successful filing of return. 3.6 Pay manually to the Authorized Agent Banks (AABs) where the real property is located while in the transition to online payment through the Electronic Banking facility of the AABs. 4. After payment, visit the RDO Special Lane and request for the issuance of the eCAR by submitting the complete documents to the Officer-of-the Day in accordance with the attached Annexes on documentary requirements in consonance with the several HDMF scenarios under Annex "C". DETACa 5. Receive the eCAR from the BIR. Officer of the Day in the RDO shall : 1. Revenue District Office (RDO) having jurisdiction over the place of business of Pag-IBIG Fund shall evaluate and check submission of complete documentary requirements. Collection Section in the RDO shall : 1. Verify the collection/payment of internal revenue taxes, if any, in the BIR-ITS Collections and Bank Reconciliation System (CBR) and shall affix his/her signature on the CBR payment verification printout before the eCAR is issued. In case data is not uploaded in the said systems within three (3) working days from the date of payment, the concerned Revenue Officers (ROs) may accept certification of remittance with bank seal from AABs. 2. For no payment returns electronically filed, verification shall be done through the eBIRForms System. OneTT/Assessment Section of RDO shall : 1. Set up a Special Lane every Tuesday and Thursday to assist in the processing and release of the eCAR of the Pag-IBIG Fund borrowers/buyers. 2. Check the completeness of the documents submitted by the Pag-IBIG Fund Authorized Representative. 3. Process the eCAR in accordance with the existing BIR issuances upon submission of the Complete Documentary Requirements (CDR) attached as Annex "B" which would depend on the Pag-IBIG Scenarios per Annex "C" of this Order defining each transaction, number of corresponding transaction and applicable list of Documentary Requirements. 4. Release eCAR to the Pag-IBIG Fund Authorized Representative. SECTION 4. Repealing Clause. All existing rules, issuances or rulings or parts thereof which are contrary to or inconsistent with the provisions of this Order are hereby repealed, modified or amended accordingly. SECTION 5. Effectivity Clause. This Order shall take effect immediately. (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue ANNEX A For Pag-IBIG Fund and BIR Linkage HQP-HLF-036 SPECIAL POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS: I/WE ______________________________________________________________, Filipino citizens, of legal age, single/married, with residence and postal address at _________________________________________ do hereby name, constitute, and appoint _________________________________ to be my/our true and lawful Attorney-in-Fact for me/us in my/our name, place and stead, to do and perform the following acts, to wit: 1. To enrol me/us in the eBIRForms System and to create for and in my/our behalf a User ID and a Password relative to my/our housing transactions with Pag-IBIG Fund; 2. To use said User ID and Password in preparing and filing of a eBIRForms and in paying the appropriate taxes and fees with the proper Revenue District Office (RDO) of the Bureau of Internal Revenue (BIR) in relation to aforesaid housing transactions; 3. To receive/claim the electronic Certificate Authorizing Registration (eCAR); 4. To perform other acts that may be necessary for the accomplishment of the above authority. HEREBY GIVING AND GRANTING unto my/our said Attorney-in-Fact full power and authority to di and perform each and every act which may be necessary or convenient, in connection with any of the foregoing as fully to all intents and purposes as I/we might or could do, if personally present and acting in person, HEREBY RATIFYING AND CONFIRMING all that my/our said Attorney-in-Fact may also do or cause to be done under and by virtue of these presents. THEREAFTER, the Attorney-in-Fact shall surrender to the principal, the user ID, password and all pertinent information in relation to the foregoing transactions with the BIR. IN WITNESS WHEREOF, I/we have hereunto set my hand this __________ day of ____________, __________ at the Province/City of _____________________________. With my conformity _______________________ _______________________ Attorney-in-Fact Principal ______________ No. _________ _______________ No. ___________ Date of Issue ________________ Date of Issue ___________________ Expiry Date _________________ Expiry Date _________________ With marital consent _____________________ Note: In case of more than one principal, provide space for additional principal/s. SIGNED IN THE PRESENCE OF: _________________________ _________________________ ANNEX B Checklist of Documentary Requirements (CDR) on Sale of Real Property Subject to Capital Gains Tax/Expanded Withholding Tax (Common Basic Requirements) Important : 1. Processing of transaction commence only upon submission of COMPLETE DOCUMENTS. 2. In all instances wherein xerox or photocopies are submitted, the original must be presented for authentication and/or certified copy from the office issuing the document. aDSIHc a. Mandatory Requirements (Taxable/Exempt) Effective January 1, 2010 1. TIN of Seller and Buyer 2. Notarized Deed of Absolute Sale/Document of Transfer, but only photocopied document shall be retained by the BIR. 3. Certified true copy of the latest Tax Declaration issued by the Local Assessor's Office for land and improvement applicable to the taxable transaction. 4. Owner's Copy for presentation purposes only together with the photocopy thereof for authentication or Certified True Copy of Transfer Certificate of Title (TCT), Condominium Certificate of Title (CCT), Original Certificate of Title (OCT). 5. Sworn Declaration of No Improvement by at least one (1) of the transferees or Certificate of No Improvement issued by the Assessor's Office, if applicable. 6. Official Receipt of initial payments of the buyer to the developer OR Notice of Approval OR Letter of Guarantee from HDMF for the payment of the loan AND Contract to Sell. 7. Duly validated return (BIR Forms 1606/1706 and 2000-OT) with Deposit Slip as proof of payment; Payment of Certification fee and documentary stamps. 8. HLURB Registration and License to Sell for initial project or sale. 9. Deed of Assignment with SPA Mandatory Requirements (Taxable/Exempt) if prior to January 1, 2010 (different annex) 10. Certified True Copy of the Deed of Sale/Assignment/Exchange issued by the Clerk of Court of the City or Municipality where the Notary Public is registered or from the Regional Trial Court or Office of the Executive Judge of the City or Municipality where the Notary Public is registered or from the National Archives Office. (In lieu of A-2, if the Deed of Absolute Sale/Assignment/Exchange/Document of Transfer is no longer available (if applicable only)) b. Other requirements, if necessary Special Power of Attorney, if the person signing on the document is not the owner as appearing in the Title. Certification of the Phil. Consulate, if document is executed abroad. Location plan/vicinity map if zonal value cannot readily be determined from the documents submitted. In the case of Developers with joint venture agreements, copy of the Memorandum of Agreement (MOA)/Joint Venture Agreement (JVA). Tax declaration/s issued beginning January 1, 2008 based on One Time transaction should be compliant with the annotation requirement under RMC No. 72-2007 dated October 9, 2007. In lieu of the annotation, copy of the previous CAR maybe submitted. c. Additional Requirements for Ante dated Sales Certified True Copy of the Deed of Sale/Assignment/Exchange issued by the Clerk of Court of the City or Municipality where the Notary Public is registered or from the Regional Trial Court of Office of the Executive Judge of the City or Municipality where the Notary Public is registered or from the National Archives Office ANNEX C HDMF Transactions Scenarios (Note: In case of two transactions, the applicable requirements in the first transaction maybe used as compliance with the 2nd transaction.) HDMF Scenario Description Applicable/Mandatory Remarks Requirements 1. Developer Assisted 1.1 Conversion of Contract to In this scenario, the buyer Applicable Basic Pay the Sell (CTS) to Real Estate avails of a loan from Requirements withholding Mortgage (REM) Pag-IBIG to fully pay the (Annex "B") tax on or (Normal transfer from selling price of the before the 10th Developer to Buyer) - property being sold by day of the Installment Plan the developer. month, following the The developer executes a date of CTS with the buyer, and payment per assigns the CTS to Pag-IBIG commercial by executing Deed of invoice issued Assignment (DOA) with by the SPA. developer except for the Within the prescribed month of seasoning period from December release of loan proceeds, payment, due the CTS shall be date is on or converted to REM, in before January which the pertinent taxes 15. shall be paid in transferring the name of the title from the developer to the buyer. The Loan Mortgage Agreement (LMA) in favor of Pag-IBIG shall then be annotated on the title. 1.2 Conversion of Contract to Downpayment of buyer is Applicable Basic Taxes due shall Sell (CTS) to Real Estate more than 25% of the Requirements be paid by the Mortgage (REM) contract price. (Annex "B") seller/developer (Normal transfer from within 10th Developer to Buyer) - day of the Deemed Cash Sale month following the date of payment of Initial payment more than comprising of 25%. downpayment and all payments made during Taxes due the calendar year is more shall be paid than 25% of the contract by the price. seller/developer within 10th day of the month following the date of payment of more than 25%. 1.3 Conversion of CTS to REM This scenario is related to Applicable Basic (Developer Special Power of Scenario 1.1, where the Requirements Attorney) buyer avails of a loan (Annex "B") from Pag-IBIG to fully pay the selling price of the property being sold by the developer. However, unlike in Scenario 1.1, under this scenario the developer- seller is no longer active and no longer existing to transact a business. On behalf of the developer, Pag-IBIG takes on the responsibility of the developer to process the transfer of title in the name of the buyer. 1.4 Cancelled CTS This scenario covers 1st Transaction: Developer Required Taxes shall (Title in the name of the cancelled CTS accounts, to-Buyer be paid for both Developer) wherein the buyer 1. Applicable Basic transactions defaulted payments Requirements (Annex within the seasoning "B") period of 2 years. 2. Notice of Cancellation Title has not been 2nd Transaction: Buyer to transferred to the buyer. HDMF 1. Applicable Basic As a requirement, the Requirements (Annex Expanded Withholding "B") Tax (EWT) shall be paid 2. Latest Certified True reckoned from the date of copy of Tax Declaration the DOA of CTS with SPA. (Land & Building) Note: This presumes non-payment of taxes from developer to buyer. 1.5 Cancelled CTS HDMF Consolidated 1st Transaction: Developer Required Taxes shall (Title in the name of the Cancelled CTS Accounts to HDMF be paid for both Developer) Real and Other 1. Applicable Basic transactions Properties Acquired Requirements (Annex (ROPA) Unsold. "B") 2. Notice of Cancellation Title has not been transferred to the buyer. 2nd Transaction: HDMF to New Buyer As a requirement, the 1. Applicable Basic Expanded Withholding Requirements (Annex Tax (EWT) shall be paid "B") reckoned from the date of 2. Latest Certified True the DOA of CTS with SPA. copy of Tax Declaration ( Refer to Scenario A.1 ) (Land & Building) 3. Notice of Cancellation Note: This presumes payment of from Pag-IBIG to buyer taxes from developer to buyer. 1.6 Deed of Conditional Sale Applicable Basic Requirements in Annex "B" Deed of Conditional Sale 2. Buyer and HDMF 2.1 Housing Loan - Retail Buyer avails loan from Applicable Basic (Buyer avails loan from HDMF Requirements HDMF) (Annex "B") Transfer involves CGT for individual and EWT for habitually engaged. 2.2 Buyer Purchases Property Buyer pays cash to Applicable Basic HDMF is liable from HDMF purchase Property from Requirements to 6% EWT HDMF (Annex "B") Transfer involves EWT and DST for individual buyer. 2.3 Conversion of Contract to Transactions prior 2010 1st Transaction Sell to Real Estate Mortgage Buyer avails loan from 1. Applicable Basic - Real and Other Properties HDMF Requirements (Annex Acquired (ROPA) "B") Transfer involves EWT 2. Notice of Cancellation for Developer and CGT from Pag-IBIG to buyer for Individual 2nd Transaction 1. Applicable Basic Requirements (Annex "B") 2.4 Conversion of Contract-to- Transactions effective 1st Transaction: Sell to Real Estate Mortgage January 1, 2010 onwards. 1. Applicable Basic - Real and Other Properties Requirements Acquired (ROPA) Buyer avails loan from (Annex "B") HDMF. Transfer involves CGT 2nd Transaction: and EWT. 1. Applicable Basic Requirements (Annex "B") Using exempt return for EWT 2.5 Foreclosure In view of the borrower Foreclosure Scenario 1: 2.5.1 Title in the name of or mortgagor's failure to Title in the name of the the Buyer pay the required monthly Buyer using Form 1706 CGT amortizations, Pag-IBIG, instead of EWT as mortgagee, files a 1st Transaction: Petition for Extra-Judicial 1. Applicable Basic Foreclosure at the Court. Requirements (Annex "B") As the winning bidder at the auction sale, Pag-IBIG 2. Certified True copy of shall pay the relevant Tax Declaration (Land taxes within the & Building) prescribed period for the transfer of title in its 2.5.2 Title in the name of name. Foreclosure Scenario 2: the developer Title in the name of the Developer without tax payment from developer to buyer 1st Transaction: 1. Applicable Basic Requirements (Annex "B") 2nd Transaction: 1. Applicable Basic Requirements (Annex "B") 2. Affidavit of Consolidation 3. Certificate of Sale (COS)/ Sheriff Certificate of Sale (from source or from RD)