When buying or selling real property in the Philippines, transferring shares of stock, or dealing with certain asset transfers, you’ll need a Certificate Authorizing Registration (CAR) from the Bureau of Internal Revenue (BIR). This document is a requirement for the proper documentation and registration of the transaction, especially when dealing with government agencies like the Registry of Deeds or the Land Transportation Office.
What is a Certificate Authorizing Registration (CAR)?
A Certificate Authorizing Registration (CAR) is a document issued by the BIR confirming that all applicable taxes have been paid for the transfer of ownership of certain properties or assets. The CAR proves to other government agencies that the transfer has complied with tax requirements, allowing the registration of the asset under the new owner’s name.
Who Needs a Certificate Authorizing Registration (CAR)?
A Certificate Authorizing Registration (CAR) is required by any individual, business, or legal entity involved in transferring ownership of certain taxable properties in the Philippines. Specifically, you need a CAR if you are:
- Selling or donating real property (such as land, a house, or a condominium unit)
- Transferring shares of stock not traded through the stock exchange
- Transferring a vehicle or other personal property where registration is needed (e.g., with the LTO)
The CAR is most frequently required in industries that regularly deal with real estate, shares of stock, or personal property transfers. Some of the most affected sectors include:
- Real Estate and Property Development – for the sale, donation, or inheritance of land, condos, and buildings.
- Banking and Finance – for foreclosures, mortgage redemptions, or asset sales, especially when transferring the title of foreclosed properties.
- Construction and Engineering Firms – often involved in buying or selling land, facilities, or property used in development projects.
- Brokerage and Investment Companies – for the transfer of unlisted shares of stock between private parties.
- Vehicle Dealerships or Logistics Companies – when transferring ownership of vehicles (in specific tax-related transactions).
- Legal and Estate Planning Services – when processing inheritance or estate settlement cases involving property distribution.
Both the seller/donor and the buyer/recipient need to ensure a CAR is issued before the transaction can be officially recorded or registered with government agencies like the Registry of Deeds, SEC, or LTO.
Is a CAR Required for Each Transaction?
Yes, a CAR must be obtained for every qualifying transaction. Each sale, donation, inheritance, or transfer of ownership is treated as a unique taxable event by the BIR. That means:
- Selling one piece of land? You need a CAR.
- Are you selling three properties in one deal? You still need a separate CAR for each titled property.
- Transferring shares to multiple people? You’ll need a CAR per transferee or transaction.
CARs are not reusable and are issued specifically to document the payment of taxes for a particular transaction involving specific parties and assets.
Where to Get a Certificate Authorizing Registration
You can obtain the CAR from the Revenue District Office (RDO) of the BIR that has jurisdiction over the location of the property (for real estate) or where the taxpayer is registered (for stocks or vehicles).
For instance:
- If you’re transferring land, apply at the RDO covering the property’s location.
- If you’re transferring shares of stock, apply at the RDO where the seller is registered.
Each RDO has a One-Time Transactions (ONETT) section that handles CAR applications.
Requirements for Certificate Authorizing Registration
The BIR requires different documents depending on the type of asset being transferred. However, some common documents include:
For Real Property Transactions:
- Notarized Deed of Sale or Deed of Donation
- Certified True Copy of the Transfer Certificate of Title or Condominium Certificate of Title
- Tax Declaration (land and improvement)
- BIR Form 1706 (Capital Gains Tax Return)
- BIR Form 2000 (Documentary Stamp Tax Return)
- Proof of tax payment (e.g., bank payment slips)
- Valid IDs of the buyer and seller
For Transfer of Shares of Stock (not traded through the stock exchange):
- Deed of Sale or Assignment of Shares
- Stock Certificates
- Secretary’s Certificate (for corporations)
- Audited Financial Statements of the issuing corporation
- BIR Forms 1707 or 2000, depending on the tax type
- Proof of tax payment
- Valid IDs of transacting parties
Note: The BIR may request additional documents based on the nature of the transaction.
How to Get a Certificate Authorizing Registration
Here’s a step-by-step guide to obtaining your CAR:
- Prepare your documents. Gather all required documents relevant to your transaction. Make sure these are complete and properly signed.
- Go to the correct RDO. Visit the RDO that handles your specific type of transaction and submit your documents to the ONETT counter.
- Tax assessment. The BIR will evaluate your documents and determine the taxes due. You will be advised on the amount and where to pay it.
- Pay taxes. Pay the taxes at an Authorized Agent Bank (AAB) or through other BIR-accredited payment channels.
- Submit proof of payment. Return to the RDO and submit the validated tax returns, payment confirmation, and your documents.
- Wait for processing. The BIR will process your CAR application, which may take a few days to several weeks, depending on the volume of applications and the completeness of your documents.
- Claim the CAR. Once approved, the BIR will release the CAR and stamped documents. You can now proceed to the Registry of Deeds or other relevant agencies to complete the transfer.
Electronic Certificate Authorizing Registration
To improve efficiency, the BIR has started implementing the Electronic Certificate Authorizing Registration (eCAR) system. This digital alternative allows taxpayers to verify CARs online and facilitates faster transactions with government agencies.
While the application process still involves submitting physical documents in most cases, the issuance of the CAR may be digitized and logged in the BIR’s central system. Agencies like the Land Registration Authority (LRA) can verify CAR authenticity through this system, making verifications potentially quicker while minimizing fraud.
Note: Many of the electronic filing features for eCAR are still under development. Consult your local RDO to find out which parts of the application process can be done online.
Summary
Securing a Certificate Authorizing Registration is a legal requirement for transferring ownership of property, stocks, or other assets in the Philippines. Prepare your documents, understand the tax obligations, and coordinate with the right BIR office to obtain your certificate. Consider working with us to streamline the process. We’ll help you gather the required documents and handle the application so you can focus on running your business.
Are You Applying for a Certificate Authorizing Registration (CAR)? Here’s Where to Get Professional Help
Securing a Certificate Authorizing Registration (CAR) in the Philippines can be complex, especially with the many tax requirements, forms, and supporting documents involved. Missing even one document or failing to comply with BIR regulations can delay your transaction, costing you valuable time and energy that could be better spent serving your clients.
That’s where Triple i Consulting comes in. Our team of experienced lawyers and accountants provides comprehensive support for your business, so you don’t have to stress over the paperwork. We’ll handle the certificates, permits, and renewals so you can focus on what matters – running your business and achieving financial success.
Contact us today to schedule an initial consultation with one of our experts:
- Fill out the form below
- Call us at: +63 (02) 8540-9623
- Send an email to: info@tripleiconsulting.com
