REVENUE MEMORANDUM CIRCULAR NO. 27-2017 issued on March 28, 2017 clarifies that the tax on the sale, exchange or other disposition of real property (whether classified as capital or ordinary asset) shall be based on the gross selling price or current fair market value, as determined in accordance with Section 6(E) of the Tax Code, whichever is higher.

     Nothing in the Tax Code or any of its implementing guidelines provide for the application of a comparative sale or any other tax base. Thus, in no case shall revenue officials or employees apply any other basis for the imposition of Capital Gains Tax/Income Tax/Withholding Tax on sale, exchange or other disposition of real property, except as provided in this Circular, as it has no legal basis.