You Bear the Cost

Once upon a time, a buyer was in the process of transferring the title of a property he had just purchased.

He started with the first step: securing the BIR Certificate Authorizing Registration (CAR). Following an online article, he went to the BIR to obtain an ONETT—a computation of taxes provided by the examiner. After waiting a few hours in line, the examiner handed him a piece of paper showing the amounts he needed to pay for capital gains tax (CGT) and documentary stamp tax (DST).

Over the next few days, he prepared manager's checks and BIR forms 1706 (CGT) and 2000-OT (DST) and paid them at an authorized bank.

Thinking everything was on track, he waited two weeks before submitting the bank-stamped filings to the BIR. When he did, the examiner instructed him to return in two weeks to claim the BIR CAR.

After two weeks, he returned to the BIR. The examiner he spoke to informed him that there was a hold-up because the creditable withholding tax (CWT) should have been paid instead of the CGT. He argued that the previous examiner had instructed him to pay the CGT, showing the ONETT document as proof. The examiner simply stated that he was following his superior's orders. The problem was that the deadline for the CWT had already passed, meaning he couldn't amend the previous filing.

Lesson: When an examiner makes a mistake, you bear the cost. To avoid these mistakes, it's crucial to understand how taxes are determined. This might explain why examiners do not sign the initial ONETT computations provided.

Additionally, when dealing with the BIR, submit documents as soon as possible. This allows you time to amend filings if necessary.