Philippines Tax Agency Clarifies Tax-Free Property Exchanges Under CREATE Act

The Philippine Bureau of Internal Revenue Feb. 4 issued Revenue Memorandum Circular No. 19-2022, clarifying tax-free exchanges of property under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act. The clarification includes: 1) a list of transactions which qualify as tax-free exchanges of property; 2) the calculation method to determine the substituted basis of transferred properties; 3) the criteria to determine the gain or loss on a subsequent property sale or disposition; 4) the requirement for taxpayers to provide proper details in their tax returns for monitoring the substituted basis; 5) a list of exempted taxes for property exchanged ...