BIR Regulation No. 3-2012

REVENUE REGULATIONS NO. 3-2012 issued on February 20, 2012 prescribes the effectivity of threshold amounts for sale of residential lot, sale of house and lot, lease of residential unit and sale or lease of goods or properties or performance of services covered by Section 109 (P), (Q) and (V) of the Tax Code of 1997, as amended. The new threshold amounts specified in Revenue Regulations (RR) No. 16-2011 shall be made effective for instrument of sale (whether the instrument is nominated as a deed of absolute sale, deed of conditional sale or otherwise) is executed and notarized on or after January 1, 2012. Thus, pertinent portions of Section 4.106-3 of RR No. 16-2005, as amended by RR No. 16- 2011 should properly be worded as follows: "Section 4.106-3 Sale of Real Properties. — Sale of real properties held primarily for sale to customers or held for lease in the ordinary course of trade or business of the seller shall be subject to VAT. Sale of residential lot with gross selling price exceeding P 1,919,500.00, residential house and lot or other residential dwellings with gross selling price exceeding P 3,199,200.00, where the instrument of sale (whether the instrument is nominated as a deed of absolute sale, deed of conditional sale or otherwise) is executed and notarized on or after January 1, 2012 and shall be subject to twelve percent (12%) output VAT. However, for instruments of sale executed and notarized on or after Nov. 1, 2005 but prior to January 1, 2012, the threshold amounts should appropriately be P 1,500,000 and P 2,500,000 respectively, and excess thereof shall be subject to ten percent (10%) output VAT, and starting Feb. 1, 2006, to twelve percent (12%) output VAT. x x