REMINDERS AS 2022 ROLLS IN

“By the taxes he pays, a citizen has every right to demand for a good and honest government.”

– Franklin D. Roosevelt

By Realttorney

Portions of the contents of this article were first published 4 days before its 10^th year anniversary – January 12, 2012. It is updated to share the same message to all new and old real estate service practitioners (RESPs) – salespersons, brokers, appraisers, government assessors and consultants of their obligations as professionals.

I wish all licensed RESPs a prosperous and abundant 2022. If we are to believe the “experts” and analysts the real estate industry looks brighter for this year due to the continued vaccination program of government, as the Philippine economy slowly rises up from the pandemic-induced negative growth in 2020.

The boom in the demand for luxury and mid-income residential projects, both in the vertical and horizontal project, means more opportunities for RESPs earn more income in 2022. So, how do we prepare for a better and prosperous 2022?

As the New Year is upon us already, I wish to outline some reminders that need to be performed by all old and new licensed RESPs pursuant to Republic Act No 9646 and its Implementing Rules and Regulations (IRR).

First, in Section 38, Rule IV of the IRR “Real estate service practitioners shall be required to indicate the certificate of registration, professional identification card, Privilege Tax Receipt (PTR) number, AIPO membership and/or receipt number.”

Therefore, all licensed RESPs should get a PTR. It cost around P300.00 and you can get this at your Office of the Treasurer of your LGU. Just say that you will get a PTR when you stand in front of the transaction window of the Treasurer’s Office of the.

What must you bring with you when you apply for a PTR? For veteran RESPs, a photocopy or the original of the PTR of the previous year will suffice. For the new salespersons and brokers, you need bring a photocopy of your Certificate of Registration and the PRC ID Card with you.

It should be noted that the Privilege Tax Receipt mentioned in the IRR is the same as the Professional Tax Receipt mentioned in the Local Government Code. For real estate salespersons, if the PTR is unavailable in your LGU please ask for the Occupational Tax Receipt (OTR).

Second, if you are already registered with the Bureau of Internal Revenue (BIR) then you should pay your annual registration fee of P500.00 using the BIR Form 0605. You can remit the payment at the BIR Revenue District Office (RDO) that you registered in or at the Authorized Agent Banks of the concerned RDO.

Now, if you are still not registered with the BIR then you must do so in order to be compliant with the National Internal Revenue Code of 1998, as amended. It is also our obligation to follow the laws of the Philippines as mandated by the Code of Ethics and Responsibilities promulgated in PRBRES Resolution No. 39, Series of 2019. Hence, BIR registration is a must for all licensed RESPs.

I will quickly outline below, the steps to register with BIR as a self-employed individual (professional):

STEP 1: Secure and fill up BIR Form 1901 – Application for Registration for Self-Employed and Mixed Income Individuals, Estates/Trusts.

STEP 2: Submit the same with the following documentary requirements to the RDO having jurisdiction over the place where you hold office – it could be a home office or a commercial office space.

Documentary Requirements:

1. Birth certificate (Original and photocopy);
2. Marriage certificate (Original and photocopy); and
3. Birth certificate of children (Original and photocopy);

Other documents for submission, if requested:

1. Mayor’s Permit (Original and photocopy);
2. Contract of Lease (if renting);
3. Title/Tax Declaration & SPA/Affidavit of Consent if the location is not owned by applicant (if not renting); and
4. Sketch of location.

STEP 3: Pay the Annual Registration Fee (P500.00) at the Authorized Agent Banks of the concerned RDO.

STEP 4: Pay Documentary Stamp Tax (DST) [loose DST / BIR Form 2000 for DST on Contract of Lease, etc.). Present proofs of payment upon submission of the documentary requirements.

STEP 5: Submit requirements for Authority to Print (ATP) and registration of books of accounts.

Documentary Requirements:

1. Accomplished BIR Form 1906;
2. Job order from the printer;
3. Final and clear sample of receipt and invoices (machine printed);
4. Photocopy of Taxpayer Identification Number Card; and
5. Photocopy of BIR Form 0605 (payment of registration fee).

Book of Accounts:

1. Cash Receipts;
2. Cash Disbursement;
3. Ledger;
4. Journal;
5. Subsidiary Sales Journal; and
6. Subsidiary Purchase Journal [last 2 are additional books for VAT Taxpayer].

STEP 6: Attend the taxpayer’s initial briefing to be conducted by the RDO concerned for new registrants in order to apprise them of their rights and duties/responsibilities as taxpayers.

STEP 7: Wait for the RDO to issue the Certificate of Registration (BIR Form 2303) together with the “Ask for Receipt” notice, Authority to Print and Books of Accounts.

For a more comprehensive discussion on the steps enumerated above including the related revenue issuances promulgated by the BIR and codal references in the National Internal Revenue Code can be found in the BIR website (www.bir.gov.ph).

A final reminder to all new salespersons and brokers reading this article. The tax code states that “all individuals engaged in trade or business shall accomplish and file the application on or before the commencement of business operation or from the day the first (1^st) transaction occurred or within thirty (30) days from the application with the LGU for issuance of Mayor’s Permit/Professional Tax Receipt (PTR), which ever comes earlier.”

I encourage newly accredited salespersons and newly licensed real estate brokers to register with the BIR. Furthermore, the Code of Ethics and Responsibility mandates all RESP to register with the BIR. In 2005, Atty. Alexander L. Lacson published his book “12 Little Things Every Filipino Can Do To Help Our Country.” You can buy a copy of his book at his website at www.alexlacson.net.

“PAY YOUR TAXES” is the 10^th Little Thing he listed. I quote some portions of what he wrote in pages 75 – 80, which resonates the same message today as if it was written 17 years ago:

“Of the many duties of a citizen under our Constitution, paying taxes is one of the most crucial. Because taxes are the lifeblood of our government, of our nation.

“It is what we use to buy the basic textbooks for our millions of children in the country, or to build additional classrooms in public schools nationwide…

“Taxes are what we use to buy the most basic of medicines, often generic and cheap, that our Department of Health officials distribute to 34 million Filipinos nationwide who live below the poverty line.

“It is what we use to pay all our government employees nationwide – our soldiers, our policemen, our public school teachers, among many others.

x     x     x

“Viewed in this light, the taxes that you and I pay are actually not lost or wasted completely. A substantial portion of the taxes we pay is still put to good use. Because there are many public servants – not only a few or some – who still do their jobs properly. There are many of them, these honest and faithful ones, but maybe many of them are just in the rank and file, like you and me.

“But they are there. Among the silent many who hold the center and keep our government from falling apart. They are the ones who keep our public institutions intact through storms and scandals, notwithstanding the misguided ambitions and corruption of some of their leaders.

“It is for this reason that we should continue paying our taxes. The good ones in the government are still good reason for us to continue paying our taxes properly. The challenge for us is just how to increase the number of these good ones in government.

x     x     x

“In 2003, P83 Billion was collected from individual income taxes. But 91% of this amount came from salaried workers from the government and private sector, people who have no choice since their income taxes are withheld mandatorily. Only P7 Billion of P83 Billion (or 9%) came from businessmen and professionals like doctors, lawyers, accountants, architects, and dentists, among others.

x     x     x

“Can you imagine if our businessmen and professionals pay more income taxes? Or if our government is able to collect 21% this year instead of the 14.1% last year, because we all decided to pay 50% more of taxes this year? This means that our government will have more funds to perform its duties and obligations to the public.

x     x     x

“But we have to pay our taxes properly. Because we all live in the same country. Because this government, whether we like it or not, is our government. Its cost is a burden we must all share. The task of building this nation is a task that we all must share. We all must contribute to build this kind of nation we dream for ourselves. Each one of us has a role in it. Each one of us has a responsibility to it.”

Third, and final reminder, concerns real estate salespersons and brokers who engage in project selling. If it is your cup of tea to sell subdivision and condominium projects then you are mandated by Presidential Decree No. 957 to register with the Department of Human Settlements and Urban Development (DHSUD), pursuant to existing rules and regulations.

Similar to securing a PTR, the Certificate of Registration must be renewed annually. You can apply at the Main office of DHSUD in Quezon City or at its Regional Offices nearest you place of residence. For licensed real estate brokers wanting to do project selling for the first time or those who are renewing their certificate of registration, kindly prepare for submission the following: (1) photocopy of your PRC ID Card, Certificate of Registration from PRC; (2) previous year’s Official Receipt; (3) recent 2 X 2 ID picture; and (4) surety/cash bond. If you are lucky to have been issued an ID Card by DHSUD then a copy of it can also be submitted. The registration fee is P720.00 if renewed prior to expiration.

Meanwhile, for newly accredited salespersons or those wanting to renew, you need to submit the following: (1) duly accomplished application form – which can be downloaded from the DHSUD website; (2) recent 2 X 2 ID picture; (3) copy of the PRC-issued accreditation card, or PRC-issued O.R. or the claim stub; (4) cash/surety bond; and (5) the Letter of Engagement/Employer for the Broker with these attachments – copies of the PRC ID card of the broker, the DHSUD ID card and the listing of accredited salespersons from PRC under the broker’s name. The registration fee is P288.00 if renewed prior to expiration.

I hope this is useful to you all as we welcome 2022. Happy New Year once again.