No CGT on mere issuance of tax declaration of real property
(Revenue Memorandum Circular No. 35- 2017, May 4, 2017)
This Tax Alert is issued to inform all concerned on the clarification regarding the imposition of Capital Gains Tax (CGT) on the transfer of ownership resulting from sale, disposition or conveyance of real property.
The BIR clarified that a mere issuance of a tax declaration of real property without any sale, exchange or disposition is not subject to CGT.
A Final tax of 6% based on the gross selling price or fair market value of the property, whichever is higher, is imposed on the sale, exchange, or other disposition of real property located in the Philippines classified as capital assets, including pacto de retro and conditional sales, where there can be a presumed profit or gain from the transaction.