The Bureau of Internal Revenue (BIR) has developed the eCAR System which generates the Electronic Certificate Authorizing Registration (eCAR). An eCAR is a mandatory requirement needed to process the transfer of property assets in the Philippines. It is commonly referred to as a significant tax clearance in relation to the transfer certificate of title or condominium certificate of title. Its absence greatly affects the status of the transfer – as its non-presence will impede the transfer of the property under your name. This is in accordance with Section 58 (E) of the National Internal Revenue Code (NIRC) of the Philippines stating:
(E) Registration with Register of Deeds
No registration of any document transferring real property shall be effected by the Register of Deeds unless the Commissioner or his duly authorized representative has certified that such transfer has been reported, and the capital gains or creditable withholding tax, if any, has been paid: Provided, however, That the information as may be required by rules and regulations to be prescribed by the Secretary of Finance, upon recommendation of the Commissioner, shall be annotated by the Register of Deeds in the Transfer Certificate of Title or Condominium Certificate of Title: Provided, further, That in cases of transfer of property to a corporation, pursuant to a merger, consolidation or reorganization, and where the law allows deferred recognition of income in accordance with Section 40, the information as may be required by rules and regulations to be prescribed by the Secretary of Finance, upon recommendation of the Commissioner, shall be annotated by the Register of Deeds at the back of the Transfer Certificate of Title or Condominium Certificate of Title of the real property involved: Provided, finally, That any violation of this provision by the Register of Deeds shall be subject to the penalties imposed under Section 269 of this Code.” (Sec. 58 (e), NIRC)
Its issuance serves as a legal record that necessary taxes due under your certain property are being paid. A few taxes that may be applicable to the transfer of the property in question are namely Documentary Stamp Tax (DST), Capital Gains Tax (CGT), Creditable Withholding Tax (CWT), certification fees and other applicable payables due.
REQUIREMENTS AND PROCESS OF CAR
Securing a Certificate Authorizing Registration (CAR) will always depend on the type of property that will undergo the transfer of title, may it be land or share of stocks.
For Real Property, the classification of assets will determine the documents required to attain your CAR certificate – whether it be classified as a capital asset or an ordinary asset.
To secure your CAR Certificate, the following steps below shall apply:
1) File for a Capital Gains Tax Return (if applicable)
- In order to secure a CAR certificate, you must first file for a Capital Gains Tax Return issuance at the Bureau of Internal Revenue (BIR). The BIR is the one who will issue such a certificate upon filing.
2) Pay for the Documentary Stamp Tax, Certification Fee and Capital Gains Tax
- After filing for a capital gains tax return, you have to make sure that the other taxes due are paid along with the collection fee for the CAR issuance.
3) Apply for the CAR certificate
- After paying, you may proceed to apply for the CAR certificate. Take note, CAR certificates are now replaced with electronic ones, pursuant to Revenue Regulation 3-2019. Under R.R. 3-2019, the use of eCAR applications using barcodes will now be regularized starting April 08, 2019.
4) Once received, submit CAR to the Registry of Deeds for Transfer Title issuance
5) Wait for Certificate to be Processed
Listed down are the following documents needed to secure your CAR Certificate:
- Certified True Copy of the Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT)
- Certified True Copy of the Latest Tax Declaration
- Property Sketch Location (if applicable)
- Original Deed of Conveyance/Deed of Sale with Special Power of Attorney (SPA)
- BIR Form No. 2000 (ONETT) – Documentary Stamp Tax Return
- Capital Gains Tax Return (if applicable)
- Proof of Withholding Tax (if ordinary asset)
- Certification Fee of PhP 100
Upon submitting the above-stated documents to the Revenue District Office, your valid eCAR shall be issued and received approximately two weeks to a month (15 – 30 calendar days upon application). To further monitor your pending application, it is best to follow up within the period of issuance. Once received, you may now proceed to the Registry of Deeds to validly and successfully transfer the title of the property to the new owner.
Need further information and assistance in the processing of the requirements for BIR eCAR? Talk to our team at FILEDOCSPHIL to know more about the requirements and process. Call us today at (+63) 917 149 2337 or send an email to info@filedocsphil.com for more information.