Ante-dating deeds to evade real property taxes

The circular is adopted by the Bureau of Internal Revenue (BIR).
The circular is issued upon the signature of JOSE U. ONG, Commissioner.
Adoption is 8 Apr. 1991.
The directive applies to taxpayers who use schemes of ante-dating deeds of sale or transfer involving real properties.

The circular addresses reports that taxpayers resort to ante-dating deeds of sale/transfer involving real properties to evade tax or reduce tax liabilities.
The circular is expressly issued to stop further losses of revenue from these practices.
It mandates strict compliance with its directives.

Ante-dating includes placing the document date earlier than the effectivity of key tax laws or regulations.
One covered practice is ante-dating before the effectivity of the capital gains tax law.
Another covered practice is ante-dating before the effectivity of the Finance Department Order establishing the zonal value for the particular area.
Another covered practice is ante-dating before the effectivity of regulations imposing the creditable withholding tax on sales or transfers of real property.

The circular applies to public instruments transferring real properties.
It applies when such instruments are presented to the appropriate revenue official.
The key timing threshold is beyond three (3) months from the date of notarization.
When the timing threshold is met, the circular deems the instruments ante-dated.
The circular’s tax consequence turns on the time of presentation to the BIR, not on the earlier date reflected in the instrument.

For instruments deemed ante-dated under the three-month timing rule, tax liabilities of the parties are determined under the rules and regulations obtaining at the time the documents are presented to the BIR.
The circular addresses tax evasion targeting income tax, creditable withholding tax, and the reduction of tax liabilities arising from real property transfer transactions.
The practical effect is that the earlier date used through ante-dating cannot control the tax regime applied to the transaction.

The circular enjoins strict compliance with its terms.
It operates to prevent taxpayers from benefiting from tax regimes that would have been applicable at an earlier, ante-dated date.