Been to BIR to return obsolete official receipts. First, you will be given a VERIFICATION FORM which requires you to go around a series of collector agent tables where they check for tax forms or payments you missed to submit in the past which they call "Open Cases". You have to settle the open cases before you get a clearance. I have open cases, just like all customers I fell in line with. We bottomed down to a compromise fee of P3,800 to close all my open cases. I was asked if I will be requesting for Authority to Print (ATP) official receipts, I answered "no" because I intend to shut down the real estate brokerage business for reasons that (1) PRC does not have a law enforcement memorandum circular, and (2) BIR and City Hall appears ignorant of RA 9646 and still accommodate the registration of colorums.
So, everyone, let's clear our open cases in BIR.
Here is the new procedure. We continue to serve customers on the following standard procedure:
(1) Without DTI-registered Business Name,
(2) Without City-registered place of business, and
(3) Without official receipts.
We will wait for PRC to issue memorandum on implementation of the Principal Place of Business provision of RESA as well as law-enforcement memorandum. Our LICENSING STRIKE is still active, which will only affect "renewal" of PRC license, HLURB-registration, and Business Tax Registration/Payment.
With PRC card and City-issued Professional Tax Receipt (PTR), we can continue practicing and servicing the customers. If we hit a sale and get commission, the payor of the commission have the obligation to "Withhold Tax", and we declare ONE TIME INCOME to BIR for whatever jackpot commission we earn (which is very seldom) as Brokers and/or Salespersons.
ATTN: Developers, Dealers, and Banks:
You may now remove the following requirements in accrediting INDIVIDUAL brokers: (1) DTI Reg Business Name, (2) City-hall Business Permit, (3) Official Receipts. In lieu of these things, you will only require PRC Card, HLURB Registration, and PTR. Whatever commission you pay to the Broker and/or his Salespersons, you withhold the usual 10% income tax and don't forget to issue (without delay before you forget) a Withholding Tax Certificate to the Broker/Salesperson.
Please pay the individual Broker or individual Salesperson even if his/her PRC license is expired while we are still on license renewal strike. The rationale of the Licensing Strike is the PRC to issue a Law Enforcement Memorandum Circular on RA 9646, because licensing is useless without it. PRC License Card of a practicing professional can be administratively renewed "retroactively" after payment of license fee and surcharge for all previous years that you failed to renew your license card. So I advise you only require the Registration Certificate (RC is the one that looks like a diploma) because the RC is lifetime. Please do not require them to show the updated or renewed PRC License Card during accreditation or during payment until the RESA Law Enforcement Memorandum is released and effective for implementation. The Salesperson have PRC registration receipts and still don't have PRC cards.
Also, please as a way to migrate those colorums to become PRC-registered, please revise your Accreditation Agreement with Brokers -- add a provision that will make it an obligation for Brokers to register Salespersons that you will nominate/give to them -- each Broker have 20 max per RA 9646. Take note, there will come a time that government will cross-refer its tax-withholding list against PRC registration list -- If you ever paid commission (as evidenced by withholding tax) to a person who has no PRC Registration (as a Salesperson or Broker), you are so screwed, the colorum will pay RA 9646 violation fine of P400,000 for every count of the crime and you are equally liable with another P400,000 fine for every count.
So, Developers/Dealers/Banks, the question is, when will you require DTI-reg Business Name and Official Receipt? The answer is simple. Ask the accreditation applicant first if he/she is getting accreditation for (A) his/her INDIVIDUAL PROFESSIONAL NAME or for (B) his/her BUSINESS ENTITY (whether sole, partnership, or corp). If the answer is "A", no need to require DTI-reg and Official Receipts. If the answer is "B", then require those two. Withhold 10% income for letter category A.
Withhold VAT or Percentage Tax for category B. Do not withhold the 10% creditable income tax for Category B. Take note, once you accredit a category B, it means you are automatically accrediting ALL real estate practitioners under that business entity and only get the TIN of the business entity.
For category A, each practitioner you must accredit EACH one and get their TIN individually. Do not withhold VAT or Percentage Tax from category A. Just withhold 10% creditable income tax for category A.
The confusion could have been resolved already if BIR and REALTER SOCIETY just pursued the Tax Workshop and Forum. Pero hindi natuloy for some reason. So mangangapa tayo nito.
If there is anything else important that I forgot to include in this article, or if you experienced a real estate transaction that is anomalous, scam, fraudulent scheme that you want me to document and expose for others to be warned, or if you want to donate to the war chest of real estate consumer rights advocacy, please feel free to email me at JohnPetalcorin@Gmail.Com. If you want to comment about this article, there is a provision for this purpose that you can find below.
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