QuestionsQuestions (BIR REVENUE MEMORANDUM CIRCULAR NO. 58-2008)
The one-year redemption period is reckoned from the date of confirmation of the auction sale, i.e., the date when the certificate of sale is issued.
For juridical persons/mortgagors, the redemption period is three (3) months reckoned from the date of confirmation of the auction sale (certificate of sale issued). It must be until, but not after, registration of the certificate of foreclosure sale with the Register of Deeds, which in no case shall be more than three months after foreclosure, whichever is earlier.
Owners of properties sold prior to the effectivity of RA 8791 retain their redemption rights until their expiration, based on the law applicable at the time.
Capital gains tax becomes due within thirty (30) days following the expiration of the redemption period.
Creditable expanded withholding tax is due and paid within ten (10) days following the end of the month in which the redemption period expires.
VAT must be paid on or before the 20th day or 25th day of the month following the month when the right of redemption prescribes, whichever is applicable under the implementing rules.
DST payment and filing of the return must be made within five (5) days from the end of the month when the redemption period expires.
Taxes must be based on the bid price of the highest bidder, pursuant to Revenue Regulations No. 4-99.
They are considered the statutory sellers in the foreclosure sales of the foreclosed real properties and are expected to pay the taxes within the periods provided under the circular after the redemption period expires.
Generally, venue for filing returns and payment of taxes on foreclosure sales (except VAT) is at the place where the real property foreclosed is located.
VAT must be paid by the VAT-registered mortgagor through filing of the required return in the Revenue District Office (RDO) where the mortgagor is registered.
Yes. If the statutory seller is a Large Taxpayer, the venue for payment of capital gains tax/creditable withholding tax and documentary stamp tax is with the concerned office of the Large Taxpayers Service pursuant to RR No. 4-2008.
It must notify the RDO where the mortgagor is registered to collect trip VAT on the transaction.
The classification depends on the nature of the asset in the hands of the mortgagor—i.e., whether it is an ordinary asset or a capital asset for that taxpayer.