BIR RULING NO.

173-99

RR 2-98-000-00-173-99

Ms. Beverly Siagan-Milo

Chief, Assessment Division
Revenue Region No. 02
No. 69 Leonard Wood Road
Baguio City

Madam:

This refers to your letter dated April 22, 1999 in effect, requesting a ruling as
to whether or not the sale/transfer of motor vehicles is subject to the creditable
withholding tax of 1% and 2%. cdlex

You state that there are Revenue District Offices that still issue a Certificate
Authorizing Registration (CAR) and collect the withholding taxes while other RDOs
no longer process and issue CAR for the sale/transfer of motor vehicles; and that the
Land Transportation Office still requires the presentation of Certification Authorizing
Registration pursuant to the Memorandum of Agreement entered into by and between
said Office and the Bureau of Internal Revenue sometime in 1987; hence, the instant
request for proper and uniform procedure in that Region.

In reply, please be informed that the withholding of 1% and 2% creditable

income tax prescribed under Revenue Regulations No. 6-85, as amended by Revenue
Regulations No. 8-90, as further amended by Revenue Regulations No. 2-91, is no
longer provided for under Sec. 2.57.2 of Revenue Regulations No. 2-98 implementing
Section 57(B) of the Tax Code of 1998. Such being the case and considering that only
payments made to persons enumerated therein are subject to the creditable
withholding tax, payments made to the seller/owner for the sale, exchange or transfer
of motor vehicle are not, therefore, subject to the creditable withholding tax. cdrep

Accordingly, the presentation of a Certificate Authorizing Registration

pursuant to Revenue Memorandum Circular No. 35-91 before a motor vehicle can be
registered by the Land Transportation Office is no longer required.

Copyright 2016 CD Technologies Asia, Inc. and Accesslaw, Inc. Philippine Taxation Encyclopedia 2015 1
 Very truly yours,

(SGD.) BEETHOVEN L. RUALO

Commissioner
Bureau of Internal Revenue

Copyright 2016 CD Technologies Asia, Inc. and Accesslaw, Inc. Philippine Taxation Encyclopedia 2015 2