Law Summary
Objectives
- Streamline and expedite the issuance process of CAR/TCL for such transfers.
- Establish clear guidelines and procedures for issuance.
Dispensing with Prior BIR Ruling Requirement
- The BIR removes the need for securing a prior ruling before issuing CAR/TCL for transfers to Condominium Corporations under RA 4726.
- Taxpayers may still opt to obtain a ruling for confirmation.
- The Revenue District Officer (RDO) may issue CAR/TCL upon verifying documents and ensuring the transfer's facts align with precedent rulings.
Key Factual Requirements for Transfer
- The real estate developer is registered owner of the land with condominium development under RA 4726.
- A Condominium Corporation is duly formed to hold and manage the land and common areas solely for the benefit of unit owners.
- Corporation's articles/by-laws comply with RA 4726 and related instruments.
- Membership in the corporation is appurtenant to unit ownership and not separately transferable.
- The corporation cannot transact properties for profit.
- A Deed of Conveyance, free of liens/encumbrances, transfers title from developer to corporation without monetary consideration.
Documentary Requirements for CAR/TCL Issuance
- Letter request signed by authorized representative stating reasons and facts justifying the transfer.
- Certified true copies of notarized Master Deed of Conveyance with Declaration of Restrictions, any amendments thereto.
- Certified true copies of Transfer Certificate of Title (TCT), tax declarations for land and common areas.
- Certified true copies of SEC Registration, Articles of Incorporation, and by-laws of the Condominium Corporation.
Tax Implications of the Transfer
- No taxable income or creditable withholding tax arises since the conveyance is without consideration and not a sale.
- Exempt from Documentary Stamp Tax (DST) on the deed pursuant to relevant regulations, except for a fixed DST of P15.00 on the notarial acknowledgment.
- Transfer is not subject to VAT, as beneficial ownership remains effectively with original party; no monetary consideration is paid.
Repealing Clause
- All inconsistent issuances or provisions are repealed or amended accordingly.
Effectivity
- The Order is effective immediately upon issuance.