New Tax Clearance on Sale of Certificate of Public Convenience

Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular No. 50-2012 (RMC No. 50-2012) dated June 28, 2012 prescribing the issuance of Certificate of Tax Clearance (CTC) as a pre-requisite on the approval of sale and transfer of Certificate of Public Convenience (CPC) by the Land Transportation Franchising and Regulatory Board (LTFRB).

Certificate of Tax Clearance (CTC) is a new requirement in dealing with the LTFRB of public transport operators. This is secured with the Bureau of Internal Revenue (BIR) Revenue District Office (RDO) where the operator is registered. Specifically, CTC will have to be secured on the following transactions with the LTFRB:

Approval on the sale, and
Approval on the transfer of Certificate of Public Convenience (CPC)

In securing the CTC with the Revenue District Office of Registration, the following are the requirements:

Duly accomplished and notarized Application Form;
LTFRB Certified Copy of the CPC for sale;
BIR Certification Fee of P100.00;
Two (2) documentary stamp tax worth P15.00 each;
If filed by a representative, Authorization Letter and two (2) valid IDs of representatives

Prior to the issuance of the CTC, the BIR RDO shall ensure the following:

That the operator has no outstanding delinquent accounts. This would mean that the operator has no self-assessed tax, or that it has no unpaid delinquent taxes.
That the operator has no stop filer cases;
That the quarterly and annual income tax returns, and percentage tax returns of year prior to the year of sale shall have been filed; and,
That the applicable quarterly and annual income tax returns, and percentage tax returns of current year sale shall have been filed

The BIR RDO shall process the application and upon finding the above in order, shall release the same for the operators further processing with the LTFRB.

Comments

This seems to be a new requirement comparable to the Certificate Authorizing Registration (CAR) for sales of shares not through the local stock exchange and sale of real property in the Philippines held as capital asset. In effect, the BIR will see to it that taxes on the public transport operator and that on the sale wold be accounted for. In the absence of such Certificate of Tax Clearance, then, the Certificate of Public Convenience (CPC) transfer will not be approved by the LTFRB.

Reference

Read the FULL text of RMC 50-2012

Disclaimer: This article is for general conceptual guidance only and is not a substitute for an expert opinion. Please consult your preferred tax and/or legal consultant for the specific details applicable to your circumstances.

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