Bureau of Internal Revenue

Browse over 9421 requests from this government agency

Go Back

  • REQUEST SUBMITTED

    You have submitted an FOI request

    Date: 2023-01-23 12:17:46.474155

  • PROCESSING REQUEST

    Your request is already in review

  • REQUEST SUCCESSFUL

    Your request was successful

    Date: 2023-01-24 06:43:59.481013

  • 4

    RATE YOUR REQUEST

    How was your request?

Inquiry Process of Selling of Land

Requested from BIR by H. Cabading at 12:17 PM on Jan 23, 2023.
Purpose: Research and Development
Date of Coverage: 01/23/2023 - 01/23/2023
Tracking no: #BIR-266944901067

Cabading 12:17 PM, Jan 23, 2023 

Good Day!

I would like to ask for advice regarding an issue, wherein a company corporation was officially closed last 2022, but the recorded closure was December 2019 (date approved by the board). Now, the company corporation wanted to sell a parcel of land to another, but since the company corporation has been officially closed, how would the transaction run through? If it is possible, what might be the requirements?

Arcita 06:43 AM, Jan 24, 2023 

January 24, 2023

Dear Ms.  Cabading,

Greetings!

Thank you for your request dated Jan 23, 2023 12:17:46 PM under Executive Order No. 2 (s. 2016) on Freedom of Information in the Executive Branch.

Your Request

You asked for Inquiry Process of Selling of Land.

Response to Request

In reply, we refer you to the following regarding the taxation of sale of real property by a corporation:
Sale of real property is subject to VAT (12%) if such asset is categorized as an ordinary asset (Section 39(A)(1) of the Tax Code) as follows:
-	Stock in trade
-	Real property included in the taxpayer’s inventory and on hand at the close of the taxable year
-	Real property for sale in the ordinary course of trade or business
-	Real property used for trade or business subject to depreciation allowance under Section 34(F) of the Tax Code
-	Other real property used in trade or business
Pursuant to Section 20 of Revenue Regulations (RR) 4-2018, deeds of sale and conveyances and donation of real property is subject to a documentary stamp tax of 1.5%.
Section 2(F) of RR 11-2018 states that a creditable withholding tax of 1.5% to 6% based on the gross selling price/total amount of consideration or the fair market value determined in accordance with Section 6 € of the Tax Code whichever is higher, paid to the seller/owner for the sale, transfer or exchange of real property, other than capital asset, shall be imposed upon the withholding agent/buyer.
For the requirements, we refer you to the Guidelines and Instructions in BIR Forms 2550Q Quarterly VAT Return, 1606 Withholding Tax Remittance Return for Transfer of Real Property Other than Capital Asset and  2000-OT Documentary Stamp Tax Declaration Return (One-Time Transactions).
Further, you should apply for business closure with the Revenue District Office (RDO) where such corporation is registered and be issued a Tax Clearance Certificate.
Likewise, you may ask for assistance from the ONETT Section of the concerned RDO for the details on your concern.

Thank you.

Respectfully,

FOI Receiving Officer
Public Information and Education Division

Cabading 09:37 AM, Jan 28, 2023 

Does this process of selling land applies also on a dissolved corporation selling a property for reason of liquidation?

Is this request offensive?

Requests for personal information and vexatious requests are not considered valid requests for Official Information.

If you believe this request is not suitable, you can report it for attention by the site administrators.