How To Get A Certificate Authorizing Registration In The Philippines

certificate authorizing registration real property for sale

If you are a Filipino taxpayer, you are probably familiar with the Certificate Authorizing Registration (CAR). But what exactly is it, and what does it do? In this post, we’ll explain everything you need to know about CARs in the Philippines. Stay tuned!

What Is A Certificate Authorizing Registration (CAR)? 

A certificate authorizing registration (CAR) in the Philippines is a document from the Bureau of Internal Revenue that proves you have paid the taxes on property you have sold. It includes the capital gains tax, documentary stamp tax, and certification fees.

To transfer the title of a property in the Philippines, you must have a Certificate Authorizing Registration (CAR). It is a mandatory requirement, and the title will not be transferred if you don’t have one. The Certificate Authorizing Registration is required under Section 58(E) of the Philippine Tax Code. For the Registry of Deeds, they will not issue a new transfer certificate of title or condominium certificate of title in the absence of a CAR.

The BIR issues the Certificate authorizing the registration of shares of stock. A Corporate Secretary of a stock corporation in the Philippines will not issue a new stock certificate in the buyer’s name without this Certificate.

Related: Tips When Buying Real Properties in the Philippines

The Benefits Of Having A Certificate Authorizing Registration

There are a few benefits of having a CAR.

Proof Of Payment

The CAR proves that you have paid the necessary taxes on the sold property. It is essential because it shows that you are a responsible taxpayer.

Delays In The Title Transfer Process

Another benefit of having a CAR is preventing delays in the title transfer process. Without this Certificate, the Registry of Deeds will not issue a new title in the buyer’s name.

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When Need To Secure Certificate Authorizing Registration

Not all property transfers require a car. This Certificate is only needed for the following types of properties: 

  1. Real properties with a transfer certificate of title (TCT) 
  2. Condominiums with a condominium certificate of title (CCT) 
  3. Shares of stock in a domestic stock corporation in the Philippines 

Any other type of property that is transferred does not need this Certificate.

Certificate Authorizing Registration Application Requirements

Now that you know what a CAR is and the benefits of having one, you’re probably wondering how you can get your hands on one. The process is quite simple, and the requirements are minimal.

To apply for a Certificate Authorizing Registration, you will need the following documents:

Transfer or Sale of Shares of Stocks:

  • Certificate of stocks
  • Certificate Authorizing Registration
  • Indorsement by the corporate secretary certifying that the shares have been sold/transferred and authorizing the registration of the same in the transferee’s name.
  • BIR Form No. 2000 (ONETT)
  • Capital Gains Tax Return

Sale of Real Properties:

  • Certificate of Title
  • Deed of Conveyance or Deed of Sale with Special Power of Attorney
  • BIR Form No. 2000 (ONETT)
  • Capital Gains Tax Return
  • Proof of Withholding (Ordinary Asset)
  • Property Location Sketch
  • Latest Tax Declaration

How To Get A Certificate Authorizing Registration BIR

If you want to get a CAR, there are a few things you need to do.

  1. File A Capital Gains Tax Return

The first thing you need to do is file a capital gains tax return. This form needs to be filed with the Bureau of Internal Revenue.

  1. Pay The Capital Gains Tax, Documentary Stamp Tax, And Certification Fee

Once you have filed the capital gains tax return, you must pay the capital gains tax, documentary stamp tax, and certification fee.

  1. Apply For The CAR

After you have paid the taxes, you can apply for the Certificate Authorizing Registration at the Bureau of Internal Revenue.

  1. Submit The Certificate To The Registry Of Deeds

Once you have received the CAR, you must submit it to the Registry of Deeds. They will then issue a new title in the name of the buyer.

  1. Wait For The Certificate To Be Processed

It can take up to 30 days for the CAR to be processed. Once processed, you will receive the Certificate in the mail.

Penalties of Not Having Certificate Authorizing Registration?

If you don’t have a Certificate Authorizing Registration, you may face a few penalties.

  1. You Will Not Be Able To Transfer The Title Of The Property

The first penalty is that you will not be able to transfer the property’s title. It means the buyer will not be able to get a new title in their name.

  1. You May Be Subject To A Fine

Another penalty is that you may be subject to a fine. The amount of the fine will depend on the value of the property.

You must pay a one-time surcharge, interest, and compromise penalties. The surcharge is 25% (50% if fraudulent), and the interest is 20%. The compromise penalties range from P200 to P50,000.

If a corporate secretary transfers shares of stock and issues a new certificate without the CAR, that person can be held liable.

Related: 9 Facts You Should Know on Tax Mapping

Frequently Asked Questions About Certificate Authorizing Registration (CAR)

  1. Do I need to pay capital gains tax if I sell my property?

Yes, you are required to pay capital gains tax if you are selling your property in the Philippines.

  1. How much is the capital gains tax?

The capital gains tax is 6% of the property’s sales price.

  1. Can I get a CAR if I am not a Filipino citizen?

No, only Filipino citizens are eligible for a Certificate Authorizing Registration.

  1. What is the difference between a Certificate Authorizing Registration and a Certificate of Title?

A Certificate of Title is a document that proves you own a piece of property. A Certificate Authorizing Registration is a document that proves you have paid the necessary taxes on the property.

  1. How long does it take to get a Certificate Authorizing Registration?

It can take 15 to 30 days to receive a Certificate Authorizing Registration.

Conclusion

A Certificate Authorizing Registration is a document required to transfer the title of a property in the Philippines. You must file a capital gains tax return to sell your property and pay the capital gains tax, documentary stamp tax, and certification fee. You can then apply for the Certificate Authorizing Registration at the Bureau of Internal Revenue. Once you have received the Certificate, you must submit it to the Registry of Deeds. It will process the Certificate, and you will receive it in the mail. You may be subject to a fine if you don’t have a Certificate Authorizing Registration.

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