Tax Alert No. 28 [Revenue Regulations No. 3-2019 dated 28 March 2019]

Prescribing the use of the Electronic Certificate Authorizing Registration (eCAR) System for transactions involving registration and transfer of real and personal properties pursuant to Section 5(B), in relation to Sections 58(E), 95, and 97 of the National Internal Revenue Code (NIRC) of 1997, as amended

The Secretary of Finance has issued Revenue Regulations (RR) No. 3 – 2019 dated 28 March 2019 to prescribe the use of the eCAR System with barcode, and the procedures and documentation that shall be followed by all parties involved in the registration and transfer of real and personal properties and improvements, including shares of stock, after all the taxes and dues are collected. 

In particular, the LRA shall use the eCAR System with barcode developed and owned by the BIR, while the BIR shall upload its data to LRA using the Philippine Land Registration and Information System to ensure accurate and secured exchange of information in accordance with the Data Privacy Act of 2012 and Section 270 of the NIRC. Moreover, the Provincial, City and Municipal Assessor’s Offices of all LGUs, banks, and other issuers of stock certificates, bonds, and other similar paper securities shall only accept the eCAR printed and issued by the BIR from the eCAR System before any ownership is transferred to the new owner.

The systems of the BIR and LRA are linked to make use of the LRA-BIR eCAR Verification System (LRA-BIR-CVS), which is now available nationwide.

The salient provisions of the RR No. 3 - 2019 are as follows:

1. The use of the eCAR System with barcode, in the meantime, is limited to the BIR and LRA until such time that the systems of all LGUs, banks, and other entities processing the transfer of properties are ready to be linked to the BIR eCAR System.
2. The eCAR shall replace the manually prepared CAR, and the eCAR System shall generate eCAR with barcode.
3. A system-generated Barcode Reference Number (BRN) shall be printed below the barcode which may be encoded in case the barcode is unreadable by the scanner used at the Register of Deeds (RD).
4. System-generated information, such as eCAR number, date of issuance, amount paid, date of payment, and signature of the authorized signatory of the eCAR, shall be stamped on the reverse side of each page of the original copies of the transfer document (e.g. Deed of Sale/Exchange/Assignment/Donation, Extrajudicial Settlement of Estate).
5. There shall be one (1) eCAR per title for registered land and/or improvements, and one (1) eCAR for each tax declaration for unregistered land and/or improvements. Separate eCARs shall be issued for all personal properties.
6. The eCAR shall be valid for five (5) years from the date of issuance. Thereafter, the eCAR shall be deemed permanently expired. A new eCAR may be generated and issued upon request of the taxpayer to replace the expired one.
7. All manually-issued CARs that are either due for revalidation or has not been presented to the RD within the validity period, and those with partial transfer of properties as prescribed in existing BIR issuances, are considered expired. Thus, these shall be replaced with an eCAR.
8. Given the authority granted by the amended Section 5(B) of the NIRC to the Commissioner of Internal Revenue to obtain, on a regular basis, both financial and nonfinancial information from persons and offices, the BIR shall obtain any information related to the payment of taxes on all transfer of property made with the LRAs and RDs.
9. The transfer certificate of title and tax declaration shall contain the following information: (a) eCAR number, (b) date of issuance of eCAR, (c) Revenue District Office (RDO) number, and (d) amount and date of payment per tax type.
10. An eCAR duly issued by the BIR and retrieved by the RD from the LRA-BIR eCAR database, whether for taxable or tax-exempt transactions, shall be the basis for the RD to effect the transfer of ownership of real property.
11. For estate and donor's taxes on transfers of real properties, eCARs shall be issued by the RDO having jurisdiction over the domicile of the donor or decedent at the time of donation or death, respectively. The RDs who have jurisdiction over the property shall no longer require the eCAR to be authenticated or countersigned by the issuing district office. For non-resident decedents/donors, the eCARs shall be issued by RDO No. 39 – South Quezon City.
12. The taxpayer identification number of the transferee shall be indicated on the face of the newly-issued tax declaration.
13. No tax declaration shall be issued in the name of the new owner unless proof is presented that the said instrument has already been registered with the RD.
14. Subsequent updates of the tax declaration without change in ownership shall require the carry-over of the information contained in the previous version of the tax declaration.

Any violation of the provisions of RR No. 3 – 2019 shall be subject to the corresponding penalties imposed under Section 269 and other pertinent provisions of the NIRC.

All rules and regulations and parts thereof inconsistent with the provisions of these Regulations, including RR No. 24 – 2002, are hereby amended, modified, or revoked accordingly.

The effectivity date of RR No. 3-2019 shall be on 16 April 2019, which is fifteen (15) days following its publication in a leading newspaper of general circulation. The Regulation was published in the Manila Bulletin on 1 April 2019.

You may access the full version of RR No. 3-2019 through the BIR website.