The Importance of TIN # and Certificate Authorizing Registation

Posted on Apr 18, 2017 in Blog, Newsletters

CASE STUDY :

OUR tax laws provide that before documents transferring real properties are registered, it is first required that the Bureau of Internal Revenue (BIR), through its commissioner or duly authorized representatives, has certified that such transfers have been reported, and the corresponding taxes thereon have already been paid.

To comply with this, the BIR issues Certificates Authorizing Registration (CARs). It is also required that the Registry of Deeds (RD) notify the regional director or the revenue district officer of the place where his office is located, if he discovers that property has been transferred without the proper payment of the taxes due on such transaction. Thus, the law creates a dual relationship between the BIR and the RDs under the Land Registration Authority (LRA) in relation to transactions involving real properties.

As of April 2015, the LRA has set in place a Land Titling Computerization Project (LTCP), which allows for full computerization of its operations, and all documents, deeds and instruments involving real properties are electronically registered. Similarly, the BIR has also implemented the electronic CARs System for the processing and generation of CARs. To integrate these two systems, the BIR, under the Department of Justice, and the LRA executed a memorandum of agreement (MOA) to evidence their agreement to set up the necessary infrastructure to link the two systems that each agency has set in place. This was executed to enable the LRA, through its RDs, to verify all real-property transfers against BIR clearances and, simultaneously, to enable the BIR to check that all of such transfers have the corresponding BIR clearances.

Under the said MOA, the BIR undertook to ensure the implementation of a comprehensive information campaign to inform the public of the changes brought about by the automated verification process adopted by the two agencies. Thus, in line with this, the BIR, on April 17, issued Revenue Memorandum Circular (RMC) 28-2015, which published the full text of the joint memorandum circular (JMC) between the LRA and the BIR dated April 6, 2015. The JMC implements the use of the LRA’s Philippine Land Registration and Information System (Philaris) for the automated verification of the BIR eCARs.

The LRA-BIR JMC, as published by RMC 28-2015, covers all transactions involving transfer of real properties processed by RDs requiring the presentation of the eCAR, which shall be automatically verified using the Philaris prior to the processing of a transfer transaction. Generally, the eCAR-verification procedure will involve the following steps:

1. The BIR will provide the LRA with data relevant to the eCAR by directly updating the LRA-BIR eCAR database;
2. The BIR shall issue the eCAR only after successfully updating the LRA-BIR eCAR database;
3. The eCAR shall contain a bar code, which will be scanned by the RD for verification, after the entry into the Electronic Primary Entry Book of the eCAR as a supporting document of a transaction;
4. The eCAR presented shall then be automatically validated against the data provided by the BIR in the LRA-BIR eCAR database, and only transactions that have validated eCARs shall be approved by the RD; and
5. The LRA shall provide the BIR relevant data relating the eCAR to its corresponding Certificate of Title.

A month ago, my liason was going through the process of transferring a title to a client.  Prior to the transaction, we always go through our due diligence on documentation ( details of buyer and seller, title, tax declaration, tax clearance, certificate of non improvement and other requirements that need to be in compliance so as to have a smooth deal ).   After the notarization of the Deed of Absolute Sale, BIR Onett computation was done then on line payments were paid for both Capital Gains Tax and Documentary Stamps Tax.  Necessary government  identification cards were submitted together with all the certified true copies needed of Title and Tax Declaration.  Our liason got the claim stub and we just had to wait for the Certificate Authorizing Registration to be released so processing of the new title to the new owner can be done.

After a week, we were informed that’s there is a discrepancy on the TIN # of the Buyer so the CAR can’t be released until it’s updated.  The name registered on the TIN # didn’t match my client’s name.  How can a different name show when in fact a title was issued to my client about six months ago on another property and there was no issue of discrepancy on the name ?  Take note that even though BIR is fully computerized, human error is inevitable.

The solution was to produce a certified Birth Certificate in order to prove that the error was BIR and not my client.  Our liason then filled out BIR Form No. 1905 which basically updates all information on the taxpayer so all information will match the records of the Bureau of Internal Revenue.

Now in order to avoid any inconvenience due to any discrepancy, it’s best to submit BIR Form # 1904 so that all information can be confirmed  from the beginning.  This more importantly will save Us or our Liason from the trouble of coming back just to fill out an updated form should there be any discrepancy.

What is an eTitle ?

The Land Registration Authority has been implementing the Voluntary Title Standardization Program. It provides title owners the option to upgrade manually-issued titles to “eTitles”, which are issued by LRA’s new Computerized System.

LRA’s Computerized System was developed as part of the agency’s Land Titling Computerization Project, which aims, among others, to:

1. Maintain on-line information on titles that is current, complete and accurate.
2. Maintain the security and integrity of records by safeguarding these from tampering or destruction and deter substitution or insertion of questionable data, in paper or digital form; and
3. Provide a system of timely detection and identification of fake land titles which will assist in the identification of persons responsible therefore.

What is BIR Form 1904 ?

Application for Registration for One-Time Taxpayer and Persons Registering under E.O. 98 (Securing a TIN to be able to transact with any Government Office)

What is BIR Form 1905 ?

Application for Registration Information Update for Updating / Cancellation of Registration / Cancellation of TIN / New Copy of TIN card / New copy of Certificate of Registration

As always, should you have any questions on the procedure of any governing bodies pertaining to Real Estate, please verify with the Bureau of Internal Revenue, Assessor’s Office, and Register of Deeds to avoid any inconvenience.

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Thank you.

robert

Robert G. Sarmiento Properties

Professional Affiliation :

Philippine Association of Real Estate Boards

Member, City of  Taguig Real Estate Board 2016 – 2017

Real Estate Broker’s Association of the Philippines 2000-2015

President, Greenhills Chapter 2008, 2009

Philippine Association of Real Estate Brokers

San Juan Mandaluyong Chapter 1998, 1999

PRC # 6569

PRC Accredited Lecturer # 0294

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