AMENDING THE PROCEDURAL REQUIREMENTS FOR THE TAX EXEMPTION OF SALE OF PRINCIPAL RESIDENCE
This Circular is hereby issued to
harmonize existing guidelines in the processing/issuance of Certificate
Authorizing Registration (CAR) or Tax Clearance Certificate (TCL) on the
sale or disposition of principal residence under Section 24(D)(2) of
the Tax Code of 1997 in line with the One Time Transaction (ONETT)
Program.
SECTION 1. In
the light of the provisions of Revenue Regulations (RR) No. 14-2000
requiring the execution of an Escrow Agreement covering the amount of
capital gains tax involved by and among the Revenue District Officer
(RDO), the Authorized Agent Bank (ABB) and the Seller/Transferor of real
property classified and used as principal residence, the tax exemption
ruling referred to in RMC Nos. 3-2001 and 14-2001 is no longer necessary
for the issuance of the CAR and/or TCL.
SECTION 2. The
concerned RDO shall see to it that if upon the lapse of thirty (30)
days following the end of the eighteen-month construction/acquisition
period, there is no showing that the seller has utilized the proceeds of
sale, exchange or disposition of his old principal residence to acquire
or construct his new principal residence, said RDO shall forthwith
initiate the assessment of deficiency capital gains tax and, thereafter,
apply the escrowed bank deposit account against the deficiency, in
accordance with Sec. 3(7) of RR 13-99, as amended by RR 14-2000.
SECTION 3. The provisions of all internal revenue issuances inconsistent herewith are hereby repealed, modified or amended accordingly.
SECTION 4. This Circular shall take effect immediately upon approval.
Adopted: 14 Oct. 2002
(SGD.) GUILLERMO L. PARAYNO, JR.
Commissioner of Internal Revenue