Tax Exemptions and Fee Privileges on NPAs Transfers
- Transfer of Non-Performing Assets (NPAs) from Financial Institutions (FIs) to Special Purpose Vehicles (SPVs), and further transfers or dacion en pago, are exempt from:
- Documentary Stamp Tax under Title VII of the National Internal Revenue Code (NIRC) of 1997.
- Capital Gains Tax on the transfer of capital assets under Section 39(A)(1) of NIRC.
- Creditable Withholding Taxes on transfers of land/buildings treated as ordinary assets per Revenue Regulation No. 2-93.
- Value Added Tax (VAT) or Gross Receipts Tax as applicable under NIRC.
- Fee Privileges include:
- 50% reduction on applicable mortgage registration and transfer fees imposed by the Land Registration Authority (LRA).
- 50% reduction on filing fees for foreclosure actions initiated by SPVs.
- 50% reduction on land registration fees as per existing LRA circulars.
Duration of Privileges and Restrictions
- Tax exemptions and fee privileges apply:
- For transfers from FIs to SPVs or dacion en pago to FIs/SPVs: up to two (2) years from the Act’s effectivity.
- For transfers from SPVs to third parties of NPAs acquired within the two-year period or dacion en pago to SPVs: up to five (5) years from the date of acquisition by the SPV.
- Properties acquired from Government Financial Institutions (GFIs) or Government-Owned or Controlled Corporations (GOCs) dedicated to socialized or low-cost housing cannot be converted to other uses.
Extension of Privileges to Individual Transactions
- Tax exemptions and fee privileges apply to individuals under the following conditions:
- Transaction limited to a single family residential unit Real Property Owned by the Assignee (ROPOA) or Non-Performing Loan (NPL) secured by a residential real estate mortgage.
- Only one transaction of one residential unit per individual.
- The two-year transfer and five-year entitlement periods applicable to NPAs also apply to these single-family residential units.
Separability Clause
- If any provision of the Act is declared unconstitutional, the remaining provisions shall remain valid and effective.
Repealing Clause
- Any law, decree, executive order, rule, or regulation inconsistent or contrary to this Act is repealed, modified, or amended accordingly.
Effectivity Clause
- The Act shall take effect fifteen (15) days after its complete publication in the Official Gazette or two newspapers of general circulation.