Tax Notes

Issuance of eCAR for real properties under extrajudicial settlement

THE Bureau of Internal Revenue (BIR) recently issued Revenue Memorandum Circular (RMC) 85-2018, clarifying the number of electronic certificates authorizing registration (eCARs) to be issued to taxpayers who submitted documents for transfer of real properties with the Land Registration Authority under an extrajudicial settlement.

By law, an extrajudicial settlement is the settling of an estate outside of court through a contract, which indicates how a deceased owner’s properties will be divided among the heirs as they see fit.

If the taxpayer simultaneously processes the extrajudicial settlement and the subsequent sale or donation of real properties, the BIR—through the One Time Transaction Team (ONETT)—must issue two eCARs: one for the extrajudicial settlement and another for the sale or donation. The taxpayer must simultaneously present the two eCARs to the Registry of Deeds to avoid the invalidation of the second transaction (the sale or donation of the real properties).

If the taxpayer separately processes the extrajudicial settlement and the subsequent sale or donation of real properties, the ONETT will still issue two eCARs.

The taxpayer has the option to pay the applicable taxes for both transactions at the same time to avoid incurring penalties and interest.

Please be guided accordingly.

 

As Published by SunStar Cebu dated 15 October 2018