QuestionsQuestions (BIR REVENUE MEMORANDUM CIRCULAR NO. 7-2012)
It concerns the Capital Gains Tax (CGT) and Documentary Stamp Tax (DST) liability of a non-stock non-profit organization on its disposition of real property.
No, the income from the sale of properties by non-stock non-profit organizations is subject to capital gains tax under Section 30 of the Tax Code.
Section 30 of the Tax Code (previously Section 26) provides for exemptions for certain non-stock non-profit organizations.
No, the exemption does not extend to income from any properties or profit-conducting activities; such income is subject to tax regardless of disposition.
Non-stock corporations organized and operated exclusively for religious, charitable, scientific, athletic, cultural purposes, or for the rehabilitation of veterans; and civil leagues or organizations operated exclusively for social welfare.
Capital Gains Tax shall be based on the gross selling price or current fair market value as determined under Section 6(E) of the Tax Code, whichever is higher.
The Deed of Absolute Sale of the real property is subject to documentary stamp tax under Section 196 of the Tax Code of 1997.
Statutory provisions must be construed as a whole, and legislative intent is ascertained by considering the statute in its entirety rather than isolated parts.
Section 30 of Revenue Regulations No. 2, as amended.
They are enjoined to give wide publicity to the Circular and to properly assess the appropriate Capital Gains Tax and Documentary Stamp Tax on transactions involving non-stock non-profit organizations disposing of real property.