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RR17-03 - March31,2003 .1703 SUBJECT 298,asAmended,...

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March 31, 2003 REVENUE REGULATIONS NO. 17-03 SUBJECT : Amending Further Pertinent Provisions of Revenue Regulations No.  2-98, as Amended, Providing for Additional Transactions Subject to Creditable Withholding  Tax; Re-Establishing the Policy that the Capital Gains Tax on the Sale, Exchange or Other  Disposition of Real Property Classified as Capital Assets Shall be Collected as a Final  Withholding Tax, Thereby Further Amending Revenue Regulations Nos. 8-98 and 13-99, as  Amended by Revenue Regulations No. 14-2000; and for Other Purposes. TO : All   Withholding   Agents,   Internal   Revenue   Officers   and   Employees   and  Others Concerned SECTION 1. Scope. — Pursuant to the provisions of Section 244, in relation to Sections  24(A), 24(D)(1), 25, 27(A), 27(D)(5), 34(K), 57(A), 57(B), 58, 151, 173, 196 and 245, all of  the National Internal Revenue Code of 1997 (Code), as amended, these regulations are hereby  promulgated to further amend portions of Revenue Regulations Nos. 2-98 and 13-99, as  amended, providing for additional income payments subject to creditable withholding tax;  clarifying   existing   provisions   on   income   payments   subject   to   creditable/expanded  withholding tax and the requirements for deductibility of certain payments; providing for  withholding as the mode of remitting final capital gains tax on the sale of real property  classified as capital asset, and for other purposes. SECTION 2. Income Payments Subject To Final Withholding Tax. — Sec. 2.57.1 of  Revenue Regulations No. 2-98, as amended, is hereby further amended to read as follows: "Sec. 2.57.1.  Income Payments Subject to Final Withholding Tax. — The following forms  of income shall be subject to final withholding tax at the rates herein specified: (A) Income payments to a citizen or to a resident alien individual. xxx                    xxx                    xxx (6) On capital gains presumed to have been realized from the sale, exchange or other  disposition of real property located in the Philippines, classified as capital assets, including  pacto de retro sales and other forms of conditional sales based on the gross selling price or  fair market value as determined in accordance with Sec. 6(E) of the Code (i.e., the authority  of the Commissioner to prescribe real property values), whichever is higher — Six percent  (6%). In case of sale on installment of real property classified as capital asset, the procedures stated  under Sec. 2.57.2(J) hereof on the sale of real property classified as ordinary asset shall apply  with the exception that the withholding tax on the former shall be final whereas that on the  latter shall be creditable.
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