Ante-Dated DOAS?

Once upon a time, a broker closed a condo sale on a rainy Friday. The negotiations were lengthy, so he was relieved it was done.

The broker returned to the office at 4:00 PM to notarize the documents but found all the messengers were out.

So, he tried to book a ride, but after waiting 30 minutes, he was unsuccessful in finding a driver.

"Monday na yan Bro! Sarado na rin ang notary!" his colleague quipped. The broker decided to follow the advice and went home.

[They failed to remember that Monday was a holiday.]

Come Monday, the broker discovered that new zonal values (ZVs) for the city covering the condo were in effect. The new ZVs meant more taxes payable for both the seller and the buyer, and he was sure neither party would be willing to pay them.

So, on Tuesday, the broker had the documents notarized and had the date set to Friday the past week. He showed the notary a photo of the signing as proof that the signing really transpired the previous week.

The BIR accepted the transaction, and no additional taxes were imposed.

The end.

Now for the horror story...

With RMC 64-2024 (see yesterday's post), the transaction would be flagged as ante-dated despite the notarization date occurring prior to the zonal value revision. From my understanding of the circular, the date of filing shall also be considered in determining whether the filings were done prior to their deadlines (on top of the notarization date).

Since the seller and the buyer were unlikely to absorb the additional taxes, who else do you think shall shoulder them?

Won't the photo be sufficient to prove that the signing occurred prior to the revision?

No. Based on the RMC, only "official" documents are accepted as proof–Contracts to Sell (CTS), Invoices, and Certifications from the Court.

Lessons:

1. Know when ZVs will be revised and file documents with the BIR way before new ZVs are released.

2. If the DOAS signing is dangerously near an impending ZV revision, I suggest executing a CTS, paying a downpayment (DP), and filing the corresponding CGT on the DP as soon as possible.