REVENUE MEMORANDUM CIRCULAR (RMC) NO. 31-2025
All taxpayers habitually engaged in the real estate business shall comply to the following:
A. Requisite tax returns to be filed in relation to the sale of real property by taxpayers habitually engaged in the real estate business.
- BIR Form No 1606 (Withholding Tax Remittance Return – For Onerous Transfer of Real Property other than Capital Asset) – for the Expanded Withholding Tax (EWT) on the sale of real property
- BIR Form No 2000-OT – for the declaration and payment of the Documentary Stamp Tax (DST) due on the sale of real property
Lumping the filing and remittance of the Creditable Withholding Tax (CWT) involving multiple real estate sales transactions using 1 return shall not be allowed and cannot be used as proof of withholding tax payment in processing the electronic Certificate Authorizing Registration
B. Proof of Income Tax Credit of taxpayers habitually engaged in the real estate business.
- The copy of BIR Form No 1606 with proof of payment of the CWT shall be attached to the Income Tax Return (ITR) where the sales of real estate were declared.
- The issuance of BIR Form No. 2307 as proof of income tax credit in lieu of BIR Form No. 1606 with proof of payment shall be discontinued.
C. Presentation of Income Tax Credits arising from BIR Form No. 1606 in the Annual ITR of taxpayers habitually engaged in the real estate business.
- The BIR Form No. 2307 Under Creditable Tax Withheld for the Year (from Previous Quarter/s and Fourth Quarter) for its business/es other than real estate business, and CWT remitted thru BIR Form No. 1606 under Other Tax Credits/Payments of the Annual ITR shall be presented depending on the applicable and latest annual ITR.
- The availability of the Electronic Filing and Payment System or other electronic platforms of the BIR shall be announced through a separate revenue issuance.
D. Documents to be issued by taxpayers habitually engaged in the real estate business on their Sale of Real Property financed by Financing Institutions.
- The receipt of money by the seller from the financing institution shall be subject to 12% output VAT and the seller shall issue a sales invoice to the buyer as evidence of sale and payment, and an Acknowledgement receipt or official receipt to the financing institution as evidence cash receipt.
E. Taxability of Other Fees collected by taxpayers habitually engaged in the real estate business
- Transfer fees, processing fees miscellaneous fees registration fees and the like billed by the taxpayer habitually engaged in the real estate business shall be subject to income tax and 12% output VAT.