Guidelines for Tax Clearance Certificates on Property Transfers

BIR Revenue Memorandum Order No. 17-97 eliminates inconsistency between Pilot and Non-Pilot Districts in processing and issuance of Tax Clearance Certificates (TCLs) and Certificate Authorizing Registration (CARs) for transfers of real property.
BIR Revenue Memorandum Order No. 17-97 establishes a single uniform criterion based on the RDO where the taxpayer-transferor is registered (or required to be registered) for determining which RDO authorizes processing and issuance of the TCL/CAR.
BIR Revenue Memorandum Order No. 17-97 eliminates concurrent application of two different jurisdiction rules for transfers of real property: (1) place where property is located and (2) place where the taxpayer is registered.
BIR Revenue Memorandum Order No. 17-97 gradually reorients and educates taxpayers in Non-Pilot Districts for preparation for full rollout of the Integrated Tax System (ITS).

A Tax Clearance Certificate (TCL) is a computer-generated tax clearance issued by RDOs in computerized areas for purposes of registration of real property upon full payment of all taxes due on a transaction involving transfer of real property.
A Certificate Authorizing Registration (CAR) is the existing form of tax clearance issued by RDOs in non-computerized areas.
“Where transferor is registered” means the RDO having jurisdiction over the domicile or legal residence, principal office/place of business of the transferor where the transferor is registered or is required to be registered.

BIR Revenue Memorandum Order No. 17-97 provides that the following rules govern issuance of the TCL or CAR.
The TCL/CAR is issued by the RDO identified by the transferor’s registration status (or by the decedent/donor/seller-transferor’s applicable RDO rules stated for each tax type).
For transactions involving multiple RDO jurisdictions, certified true copies of the issued TCL/CAR are issued for presentation to the proper Register of Deeds in each area.

Estate tax clearance is issued by the RDO where the decedent was domiciled or registered at the time of death, regardless of the location of properties.
If the decedent is a non-resident and the estate tax return is filed with the Philippine Embassy or Consulate in the country where the decedent was a resident at the time of death and transmitted to RDO No. 51 a Pasay City, the TCL/CAR is issued by RDO No. 51.
If the decedent is a non-resident with no legal residence in the Philippines, the estate tax return may be filed with the Office of the Commissioner through RDO No. 39 a Quezon City, and the TCL/CAR is issued by RDO No. 39.
If the decedent left properties within the jurisdiction of different RDOs, the RDO issuing the TCL/CAR for registration purposes issues certified true copies to the administrator/executor/heir for presentation to the concerned Register of Deeds.
After the report of verification or audit and the estate tax return filed in the RDO are reviewed by the Assessment Division, the Chief, Assessment Division issues a Confirmation or Termination Letter after payment of any deficiency estate tax due, and transmits it to the RDO for issuance of the TCL or CAR.

Donor’s tax return is processed and the TCL/CAR is issued by the RDO where the donor is a resident or is registered.
If the donor is a non-resident and the donor’s tax return is filed with the Philippine Embassy or Consulate in the country where the donor is a resident at the time of filing and transmitted to RDO 51 a Pasay City, the TCL/CAR is issued by RDO 51.
If the donor is a non-resident with no legal residence in the Philippines, the donor’s tax return may be filed with the Office of the Commissioner through RDO No. 39 a Quezon City, and the TCL/CAR is issued by RDO No. 39.
If the deed of donation covers several properties located in different districts, the RDO issuing the TCL/CAR issues certified true copies to the donor for presentation to the Register of Deeds concerned to register the transaction.
After the report of verification or audit of the donor’s tax return filed in the RDO is submitted for review by the Assessment Division, the Chief, Assessment Division issues a Confirmation or Termination Letter after payment of any deficiency donor’s tax due, and transmits it to the RDO for issuance of the TCL or CAR.

For every sale, exchange, or transfer of real property—whether classified as ordinary or capital asset—made by an individual, estate or trust, or by a corporation, the TCL/CAR is issued by the RDO where the seller-transferor is registered or required to be registered.
The tax returns and all taxes due on the transaction involving transfer of real property—specifically capital gains tax or creditable withholding tax and documentary stamp tax—must be filed and paid in the RDO where the seller-transferor is registered.
If the transaction involves transfer or assignment of real properties located in the jurisdiction of several RDOs, the RDO issuing the TCL/CAR issues certified true copies of the TCL/CAR to the seller/transferor or buyer/transferee for registration of the real properties with the Register of Deeds in different areas.

The Chief, Asset Valuation Division-National Office must furnish each and every RDO with diskette (computer copy) or hard copy (computer print-out) of available zonal valuations nationwide.
Zonal valuations must be constantly updated as soon as changes are effected.
If an RDO has difficulty identifying the zonal valuation of an area outside its jurisdiction, the RDO must consult the District Officer of the RDO where the property is located to establish the correct zonal valuation for computing the taxes due.

BIR Revenue Memorandum Order No. 17-97 repeals and amends provisions of existing issuances that are inconsistent with its rules.
BIR Revenue Memorandum Order No. 17-97 is issued to operate in line with Revenue Regulations No. 11-96 and to amend Revenue Memorandum Order No. 34-96 dated November 15, 1996.