April 18, 1988

REVENUE MEMORANDUM ORDER NO. 16-88

SUBJECT : Amending Revenue Memorandum Order No. 29-86 Dated

September 3, 1986, Regarding Payment of Capital Gains Tax on
Extrajudicial Foreclosure Sale Initiated by Banks, Finance and
Insurance Companies

TO : All Internal Revenue Officers and Others Concerned

SECTION 1. In order to clarify the confusion brought about by the imposition of

the 5% capital gains tax, prescribed under Section 21(e) of the Tax Code, as amended,
on the purchase by banks, nance and insurance companies of real property classi ed
as capital asset from individuals thru mortgage foreclosure sale, paragraph 2.2 of
Revenue Memorandum Order No. 29-86 dated September 3, 1986 is hereby amended
to read as follows: cd i

"2.2 - The tax applies not only to ordinary sale transaction but also to pacto
de retro sales and other forms of conditional sales. This accordingly, includes
mortgage foreclosure sales, except extrajudicial foreclosure sale under Act No.
3135, as amended by Act No. 4118 wherein the tax shall become due only upon
the consolidation of title in the name of the nancial institution (banks, nance
and insurance company) concerned."

SECTION 2. Effectivity. — This Revenue Memorandum Order shall take effect

immediately. aisa dc

(SGD.) BIENVENIDO A. TAN, JR.

BIR Commissioner

CD Technologies Asia, Inc. © 2018 cdasiaonline.com