Understanding Philippine Capital Gains Tax

Capital Gains Tax is imposed on gain that the seller gets from a sale, exchange or other transfer of capital assets that are located in the Philippines. Pacto de retro sales and other forms of conditional sales are included in this.

  1. Final Capital Gains Tax for Onerous Transfer of Real Property Classified as Capital Assets (Taxable and Exempted)

TAX FORM:

BIR Form 1706

DOCUMENTS REQUIRED:

The following documents are required

  • One photocopy of the Notarized Deed of Sale or Exchange along with the original
  • Certified true copy of tax declaration on the lot
  • Improvement during nearest time of sale
  • One confirmed copy of BIR ruling for tax exemption
  • Approved tax debit memo
  • If the transaction is tax-exempt then the “Sworn Declaration of Intent” as described under Revenue Regulations 13-99
  • Documents supporting the exemption
  • Photocopy of the following
      • Original Certificate of Title
      • Transfer Certificate of Title
      • Condominium Certificate of Title (for a condo unit)

PROCEDURE:

Go to an Authorized Agent Bank (AAB) in the Revenue District where the property is located to file the Capital Gains Tax return in triplicate.

If there is no AAB in the area then you can file the return with the Revenue Collection Officer directly. You can also file it with Authorize City or Municipal Treasurer.

If you are a One-Time Transaction (ONETT) taxpayer then use eBIRForms for filing the tax returns.

TAX RATES:

The tax rate for real property is 6%

capital_gains_tax

DEADLINE:

The deadline for filing the Final Capital Gains Tax is within 30 days after each sale, exchange, transfer or other disposition of real property.

  1. Capital Gains for Onerous Transfer of Shares of Stocks Not Traded Through the Local Stock Exchange

TAX FORM:

BIR Form 1707

DOCUMENTS REQUIRED:

  • One photocopy of Notarized Deed of Sale/ Exchange of shares of stock along with the original
  • Photocopy of Deed of Acquisition
  • Proof of Cost or fair market value of the stocks at the time of acquisition
  • Photocopy of Certificate of shares and evidences of expenses related to sale
  • Tax debit memo that is approved duly

PROCEDURES:

You need to go to the Authorized Agent Bank (AAB) in the Revenue District where the seller or transferor of stocks is registered to file the Capital Gains Tax Return.

File the return with the Revenue Collection Officer or Authorized City or Municipal treasurer if the place does not have an AAB.

File tax returns using eBIRForms if you are an ONETT (One-Time Transaction) taxpayer.

TAX RATE:

For amounts less than or equal to P100,000- 5%

For amounts more than P100,000- 10%

DEADLINE:

File tax returns within 30 days after each sale or disposition of shares of stocks or real property.

If there has been an installment sale, file the return within 30 days after the receipt of first down payment.

File a single return for multiple transactions in a day.

  1. Annual Capital Gains Tax for Onerous Transfer of Shares of Stocks not Traded Through the Local Stock Exchange

TAXFORM:

BIR Form 1707A

PROCEDURE:

You need to go to the Authorized Agent Bank (AAB) in the Revenue District where the seller or transferor of stocks is registered to file the Capital Gains Tax Return in triplicate.

File the return with the Revenue Collection Officer or Authorized City or Municipal treasurer if the place does not have an AAB.

TAX RATE:

For rates below P100,000- 5%

For rates above P100,000- 10%

DEADLINE:

Individual Taxpayer: On or before April 15 of each year.

Corporate Taxpayer: On or before the fifteenth (15) day of the fourth (4) month following the close of the taxable year