TIN Number – Important Information about VAT

tin # picasa

Please take note that your TIN NUMBER, whether you have one or not, is the most important number that the Bureau of Internal Revenue looks at  to assess if a Seller is subject to Value Added Tax ( VAT ) or not !

A recent case of a friend of mine who was selling his son’s property was found to be VATable, which meant a 12% tax on top of the 6% creditable withholding tax !  The condominium unit the son was selling was never leased out and was also his primary residence ( view my article on primary residence tax exemption – http://www.robertgsarmiento.org/primary-residence-capital-gains-tax-exemption/ ).

The technicality was due to the registration information on his TIN # , the line of business indicated on the application was rental and sale of real estate property.   The son works for a company as a Corporate Director.   ( Be very careful on what information you put on the TIN application ).

They are currently updating the TIN to show the correct line of business however, there is insufficient time to adjust the issue on VAT.  For those newly married / separated, you must update your record with the Bureau of Internal Revenue to avoid any inconvenience.

Lastly, please be advised that the Bureau of Internal Revenue is aggressively updating the revenue regulations to plug any loopholes specifically in cases where tax credits or tax free exchanges are available.  Take the time to verify status of your TIN and other important information regarding sale ( i.e. zonal value, classification of property, etc, ) so as to avoid any surprises.

In addition, the Bureau of Internal Revenue are now strictly implementing Revenue Regulations (RR) No. 7-2003 Sec. 3.a.4, which defines those Taxpayers habitually engaged in the real estate business.  Any Property Owner who sells more than five properties ( no time frame yet given, but we assume that it’s within this current Administration ) will be subject to VAT on the sixth property sold.

Of course, it is BEST to consult your accountant or tax lawyer on what effect these recent changes may already have had on your status.

REMINDER :  It’s the Taxpayer’s BURDEN to find out these updates for themselves !  So it’s a must to visit : www.bir.gov.ph and search for any updates on regulations ( this may still be difficult though ) !

Visit www.robertgsarmiento.org for blogs, news, case studies, updated rulings and property listings which you may find informative, should be the blog be on private, email be at [email protected] for information you need.  The blog was blocked due to plagiarism !

We are currently migrating all posts to www.robertgsarmiento.com which will be the main website and will advise you when ready.

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Finally, should you have a property for SALE or LEASE, let me know if our office could be of assistance.

Thank you.

Robert G. Sarmiento Properties
Professional Affiliation :
Philippine Association of Real Estate Brokers
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
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