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:
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.
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.
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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