In the Philippines, transferring ownership of real property, dealership assets, or shares of stock requires a Certificate Authorizing Registration (CAR) to ensure compliance with tax obligations. Issued by the Bureau of Internal Revenue (BIR), the CAR serves as proof to relevant parties and government agencies that all applicable taxes have been properly settled.
For businesses that regularly deal with real property, vehicles, or stock transactions, it’s important to know when a CAR is needed, where to obtain one, and how to navigate the application process.
What is a Certificate Authorizing Registration (CAR)?
A Certificate Authorizing Registration (CAR) is a tax clearance document issued by the BIR, confirming that all applicable taxes, such as Capital Gains Tax (CGT), Creditable Withholding Tax (CWT), or Documentary Stamp Tax (DST), have been paid for the transfer of real or personal property. It is mandatory to register ownership changes with the Registry of Deeds for real properties (e.g., land or condominiums) or with a corporate secretary for shares of stock in a domestic corporation.
Who Needs a Certificate Authorizing Registration (CAR)?
A CAR is required for individuals or entities involved in transferring specific types of properties, including:
- Real Property Owners: Those selling or transferring real properties covered by a TCT or CCT, such as land, houses, or condominium units.
- Dealership Businesses: Operators transferring assets like vehicles or equipment, particularly in public transport, may need a CAR or a similar Tax Clearance Certificate (TCC) for assets like Certificates of Public Convenience (CPC).
- Stockholders: Individuals or entities transferring shares of stock in a domestic corporation not traded on the stock exchange.
This requirement applies to transactions like sales, donations, or estate settlements, ensuring tax compliance before transferring ownership.
Where to Get a Certificate Authorizing Registration?
The CAR is obtained from the BIR, specifically through the Revenue District Office (RDO) with jurisdiction over the transaction:
- Real Property: File at the RDO where the property is located.
- Shares of Stock: File at the RDO where the seller resides or where the issuing corporation is registered.
- Dealership Assets: For assets like vehicles under a CPC, file at the RDO overseeing the business location or as specified by BIR regulations (e.g., RDO No. 39 South Quezon City for non-resident cases).
Requirements for Certificate Authorizing Registration
The documents required vary depending on your local RDO and the nature of the transaction. Requirements typically include:
- For Real Property:
- Notarized Deed of Absolute Sale or similar transfer document.
- Certified True Copy of the TCT or CCT.
- BIR Form No. 2000 (ONETT) for Documentary Stamp Tax Return.
- Proof of payment for Capital Gains Tax or Creditable Withholding Tax and Documentary Stamp Tax.
- Real Property Tax Clearance from the local assessor’s office.
- For Shares of Stock:
- Stock transfer agreement or deed of assignment.
- Certified true copy of the stock certificate.
- BIR Form No. 2000 for DST.
- Proof of payment for CGT or CWT, as applicable.
- Corporate Secretary’s certification of shares.
- For Dealership Assets:
- Relevant transfer documents (e.g., Deed of Sale for vehicles).
- Tax clearance or CPC-related documents, as per BIR Revenue Memorandum Circular No. 50-2012.
- Proof of tax payments, such as DST or other applicable taxes.
How to Get a Certificate Authorizing Registration
Follow these steps to secure a CAR:
- Prepare Documents: Gather all required documents based on the property type.
- File Tax Returns: Submit BIR Form No. 2000 (ONETT) and other relevant forms to the appropriate RDO, along with proof of tax payments (e.g., CGT, DST) through Authorized Agent Banks (AABs).
- Submit CAR Application: Apply with the RDO, including all supporting documents. Monitor progress, as processing typically takes 15–30 days, depending on the RDO’s workload.
- Receive the CAR: Once verified, the BIR issues the CAR (now an eCAR). For real property, present the eCAR to the Registry of Deeds to transfer the title. For shares, submit them to the corporate secretary for new stock certificates.
- Complete Registration: Pay registration fees at the Registry of Deeds or update records with the corporate secretary.
Electronic Certificate Authorizing Registration
Since 2019, the BIR has transitioned to the Electronic Certificate Authorizing Registration (eCAR) system under Revenue Regulations No. 3-2019. The eCAR replaces manual CARs and includes a barcode and system-generated Barcode Reference Number for verification. The eCAR is issued by the RDO and verified by the Registry of Deeds or corporate secretary through the LRA-BIR eCAR Verification System, ensuring authenticity and compliance.
Note: Several electronic filing functions for the eCAR system are still being developed. You will likely still need to complete several steps in person to secure your certificate.
Final Thoughts
Obtaining a CAR is required to comply with Philippine tax laws when transferring real property, dealership assets, or shares of stock. To avoid costly delays, ensure your application requirements are complete and accurate. Then, carefully follow the BIR’s instructions during the application process. For complex cases or to streamline the process, consider working with us. Our tax experts will handle the paperwork and application, allowing you to focus on securing clients and running your business.
Are You Securing a Certificate Authorizing Registration (CAR) for the First Time? You Can Find Expert Assistance Here
Obtaining a Certificate Authorizing Registration (CAR) in the Philippines can be complex due to the numerous documentary requirements involved. From tax clearances to specific transfer documents, it’s easy to overlook a critical step or miss a deadline. Unfortunately, such oversights can lead to delays and complications in transferring ownership of real property, dealership assets, or shares of stock.
Thankfully, the Business Registration Philippines team provides comprehensive support for your business registration, so you don’t have to stress over the paperwork. We’ll handle the permits and renewals so you can focus on what matters most – running your business and achieving financial success.
Contact us today to schedule an initial consultation with one of our experts:
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