Prescribing the Use, Guidelines and Procedures in the Printing, Issuance and Distribution of Two Revised Forms (BIR Form Nos. 1954 and 1954-A) and Two New Forms (BIR Form Nos. 1954-A-1 and 1954-B) on Real and/or Personal Property Transactions

December 17, 1992 REVENUE MEMORANDUM ORDER NO. 03-93 SUBJECT : Prescribing the Use, Guidelines and Procedures in the Printing, Issuance and Distribution of Two Revised Forms (BIR Form Nos. 1954 and 1954-A) and Two New Forms (BIR Form Nos. 1954-A-1 and 1954-B) on Real and/or Personal Property Transactions TO : All Internal Revenue Officers and Others Concerned I. Objectives: A. To prescribe the use, guidelines and procedures in the filing/issuance of the following forms: 1. Certificate Authorizing Registration (Real Property Transaction Subject to Capital Gains Tax, BIR Form 1954). 2. Certificate Authorizing Registration (Real Property Transaction Not Subject to Capital Gains Tax, BIR Form 1954-A). 3. Application for Certificate Authorizing Registration, BIR Form No. 1954-A-1 (Real Property Transaction Not Subject to Capital Gains Tax). 4. Certificate Authorizing Transfer/Registration (Properties Subject to Donor's/Estate Tax, BIR Form 1954-B). B. To provide for standard forms of application for Certificate Authorizing Registration (CAR) of real and/or personal properties arising from sale, transfer, exchange or other disposition thereof; C. To effectively monitor the issuance of CAR and to ensure the collection of internal revenue taxes arising from the sale, transfer, exchange and other disposition of real and/or personal properties, including compliance with the requirements on withholding taxes. II. Guidelines, Instructions and Procedures: A. Printing and Requisition of BIR Form Nos. 1954, 1954-A, and 1954-B: 1. These blank certificates are accountable forms with consecutive serial number at the upper right hand corner bound in fifty (50) sets per pad. BIR Form 1954 shall be printed in quadruplicate while BIR Forms 1954-A and 1954-B shall be printed in quintuplicate. 2. These blank certificate shall be requisitioned from the Accountable Forms Division which shall maintain a permanent record book containing the name and designation of the requisitioning officer, date issued and serial numbers of the blank certificates. 3. Officers Authorized to Requisition Certificates: a) National Office Chiefs of division authorized to issue the Certificates shall requisition the blank certificates from the Accountable Forms Division with the approval of their respective Assistant Commissioners. b) Regional Offices The Regional Director shall requisition the certificates from the Accountable Forms Division. Revenue District Officers (RDO) shall requisition the certificates from their respective Regional Directors who shall maintain a permanent record book containing the name and designation of the requisitioning officer, date issued and serial numbers of the blank certificates. 4. When these certificates are printed and available for distribution, the accountable officers concerned shall surrender the old unused certificates (BIR Forms 1954 and 1954-A) to the Chairman, Committee on Disposal of Accountable Forms who shall dispose of the same under existing rules (RMO 21-88 and RMO 21-84). B. Printing and Requisition of BIR Form 1954-A-1 - This form shall be printed in loose leaf and shall be requisitioned from the Property Division, National Office. C. Filing of Application (BIR Form 1954-A-1): 1. The sellers/transferors or their duly authorized representative shall file the application for every real property transaction not subject to capital gains tax as provided for in the following: a) Sections 21 (c) (2) (Real property dividends to individuals, 24(e) (4) (Intercorporate real property dividends), and 34(c) (2) (Exchange of real property for shares of stocks) of the National Internal Revenue Code, as amended; b) Comprehensive Agrarian Reform Law; and c) those subject to expanded withholding tax of 0%, 2.5% and 5% (under Revenue Regulations No. 12-89, as amended by Revenue Regulations No. 1-90 and Revenue Memorandum Circular (RMC) No. 80-89, as amended by RMC 7-90 and modified by RMC 16-90. Distribution of application: Original - Revenue District Officer Duplicate - Applicant 2. The applicant shall attach to the application, photocopies of the following documents: cdt a) Deed of Sale/Exchange/Transfer; b) Original Certificate of Title (OCT); Transfer Certificate of Title (TCT); or Condominium Certificate of Title (OCT); c) Certified true copy of latest Tax Declaration; and/or d) Certificate of Registration and License to Sell issued by Housing and Urban Development Coordinating Council (HUDCC)/Housing and Land Use Regulatory Board (HLURB); and/or e) Certificate of Membership from the Chamber of Real Estate and Builders Association, Inc. (CREBA). 3. Rate of Expanded Withholding Tax: a) 0% if seller is registered with HUDCC/HLURB and is certified to as engaged in low cost housing project and the consideration does not exceed P500,000.00; b) 2.5% if seller is habitually engaged in real estate business duly accredited member of CREBA, Inc. and registered with HUDCC/HLURB; and c) 5% if seller does not qualify under "a" and "b" above. D. Payment and Remittance of Withholding Tax: Before the application can be duly processed, the buyer/withholding agent shall accomplish BIR Form 1743-W (Monthly Remittance Return of Income Taxes Withheld) and remit the corresponding withholding tax on or before the 10th day of the month following the sale, exchange or transfer: 1. If the buyer is not required by any law or regulations to register as a withholding agent such as when he is not engaged in business, he shall also accomplish and submit BIR Form 1743-B (Annual Information Return of Creditable Income Tax Withheld) simultaneous with BIR Form 1743-W to the Revenue District Office where his legal residence is located, but not later than March 1 of the succeeding year. 2. If the buyer is a registered withholding agent whether individual or corporation, he shall accomplish and submit BIR Form 1743-B to the Revenue District Office where his legal place of business is located, on or before March 1 of the succeeding year. acd In return, the buyer, shall furnish the seller with a Certificate of Creditable Income Tax Withheld At Source (BIR Form 1743-1) anytime after the transaction but not later than March 1 of the succeeding year. E. Processing of Application: The Revenue District Officer shall process the application within five (5) working days after the receipt of evidence of payment of withholding tax from buyers who are registered/not registered as withholding agent as follows: a) Revenue Official Receipt (BIR Form 2524, ROR); b) Validated Authority to Accept Payment (BIR Form 2319A, ATAP); and c) Validated Monthly Remittance Return of Income Taxes Withheld (BIR Form 1743-W). F. Issuance, Distribution and Monitoring of Certificates Authorizing Registration of Real and/or Personal Properties Subject to Donor's/Estate Tax: 1. The Certificate (BIR Form 1954-B) may be issued by the following offices after proper examination of the return filed in accordance with existing rules and regulations: a. National Office 1) The Assessment Service, thru the National Audit Review Division (NARD), for transfer tax cases investigated by the Revenue Region but subject to review and approval by the National Office under existing rules. 2) The Special Operations Service, thru the authorized investigating division, for transfer tax cases investigated by the investigating divisions in the National Office. 3) The Collection Service thru the authorized divisions for assessed transfer tax cases paid thru the divisions concerned. b. Regional Office The Office of the Regional Director thru the Assessment/Collection Branch for transfer tax cases which are not subject to review and approval by the National Office under existing rules. c. Revenue District Office The Revenue District Office for transfer tax cases where the issuance of certificates is delegated by the Regional Director under existing rules. 2. For Real Property Transaction Subject is Capital Gains Tax (BIR Form 1954) and Real Property Transaction Not Subject to Capital Gains Tax (BIR Form 1954-A). The Revenue District Office of the place where the property is located shall issue the certificate. 3. Distribution of Certificate: The authorized Revenue Officer shall prepare and distribute the certificates as follows: a. BIR Forms 1954: Original - Taxpayer for presentation to the Register of Deeds. Duplicate - Taxpayer's Copy Triplicate - Issuing Officer Quadruplicate - Attach to the Docket of the case b. BIR Form 1954-A: Original - Taxpayer for presentation to the Register of Deeds. Duplicate - Taxpayer's Copy Triplicate - Issuing Officer Quadruplicate - Attach to the Docket of the case Quintuplicate - The RDO where seller has his legal residence or principal place of business. c. BIR Form 1954-B: Original - Taxpayer for presentation to the Register of Deeds. Duplicate - Taxpayer's Copy Triplicate - Issuing Officer Quadruplicate - Attach to the Docket of the case Quintuplicate - The RDO where seller has his legal residence or principal place of business. Quintuplicate - Banks, Financing, Insurance and Transfer Tax Division (National Office) 4. Monitoring of Used Certificate: The Division Chief, Revenue District Officer and Chiefs, Assessment and Collection Branches shall render a monthly summary report of BIR Form Nos. 1954, 1954-A and 1954-B with Annexes A, B and C (APCD Form Nos. 001-92, 002-92 and 003-92) within ten (10) days after the end of every month to the Chairman, Technical Committee on Real Property Valuation, Attention: Chief, Assessment Performance Control Division (National Office) copy furnished the Chief, Accountable Forms Division, (National Office). The quintuplicate copy of BIR Form 1954-B shall be forwarded to the Chief, Banks, Financing, Insurance and Transfer Tax Division (National Office). III. Repealing Clause: The current policies and procedures in the printing, distribution, accountability and issuance of the certificates, inconsistent herewith are hereby revoked or amended accordingly. IV. Effectivity: This Order shall take effect on January 1, 1993. (SGD.) JOSE U. ONG Commissioner of Internal Revenue