BIR Regulation No. 9-2012

REVENUE REGULATIONS NO. 9-2012 issued on June 1, 2012 implements Sections 24(D)(1), 27(D)(5), 57, 106 and 196 of the National Internal Revenue Code (NIRC) of 1997 relative to the non-redemption of properties sold during involuntary sales. In case of non-redemption of properties sold during involuntary sales, regardless of the type of proceedings and personality of mortgagees/selling persons or entities, the Capital Gains Tax (CGT), if the property is a capital asset; or the Creditable Withholding Tax (CWT), if the property is an ordinary asset; the Value-Added Tax (VAT) and the Documentary Stamp Tax (DST) shall become due. The buyer of the subject property, who is deemed to have withheld the CGT or CWT due from the sale, shall then file the CGT return and remit the said tax to the BIR within 30 days from expiration of the applicable statutory redemption period, or file the CWT return and remit the said tax to the BIR within 10 days following the end of the month after expiration of the applicable statutory redemption period, provided that, for taxes withheld in December, the CWT return shall be filed and the taxes remitted to the BIR on or before January 15 of the following year. If the property sold through involuntary sale is under the circumstances which warrant the imposition of VAT, the said tax must be paid to the BIR by the VAT-registered owner/mortgagor on or before the 20 th day or 25 th day, whichever is applicable, of the month following the month when the right of redemption prescribes. The DST return shall be filed and the said tax paid to the BIR within 5 days after the close of the month after the lapse of the applicable statutory redemption period. The CGT/CWT/VAT and DST shall be based on whichever is higher of the consideration (bid price of the higher bidder) or the fair market value or the zonal value as determined in accordance with Section 6 (E) of the Tax Code