REVENUE REGULATIONS NO. 6-2004 issued on May 14, 2004 implements the tax exemptions and privileges granted under Republic Act (RA) No. 9182, otherwise known as “The Special Purpose Vehicle (SPV) Act of 2002.” Every SPV shall register once with the appropriate Revenue District Office (RDO) on or before the commencement of its business, in accordance with the provisions of Chapter II, Title IX of the National Internal Revenue Code (NIRC) of 1997 and its implementing regulations. An SPV maintaining a head office, branch or facility shall register with the RDO having jurisdiction over the head office, branch or facility. The SPV shall file its application for registration together with the following documents: a. “Certificate of Registration” as an SPV issued by the SEC; b. Articles of Incorporation and By-Laws; and c. Mayor’s Permit. An annual registration fee in the amount of Five Hundred Pesos (P500.00) for every separate or distinct establishment or place of business, including facility types where sales transactions occur, shall be paid by an SPV upon registration and every year thereafter on or before the last day of January. The registration fee shall be paid to an Authorized Agent Bank (AAB) located within the RDO, or to the Revenue Collection Officer, or duly authorized Treasurer of the city or municipality where each place of business or branch is registered. An SPV shall register each type of internal revenue tax for which it is obligated to file a return and pay such taxes in accordance with the pertinent provisions of the NIRC of 1997 and its implementing revenue regulations, and update such registration of any changes. All SPVs are required to issue receipts or sales or commercial invoices for each sale or transfer of merchandise/services as well as keep a journal and a ledger (or their equivalents) of their transactions. Only the following transactions are considered tax exempt: a. Transfer of a Non-Performing Loan (NPL) by a Financial Institution (FI) to an SPV; b. Transfer of a Real and Other Properties Owned or Acquired (ROPOA) by an FI to an SPV; c. Dation in payment (dacion en pago) of an NPL by a borrower to an FI; d. Dation in payment (dacion en pago) of an NPL by a third-party, on behalf of a borrower, to an FI; e. Transfer of an NPL by an FI to an individual; f. Transfer of a ROPOA by an FI to an individual; g. Transfer of an NPL by an SPV to a third-party; h. Transfer of a ROPOA by an SPV to a third-party; i. Dation in payment (dacion en pago) of an NPL by a borrower to an SPV; j. Dation in payment (dacion en pago) of an NPL by a third-party, on behalf of a borrower, to an SPV; k. Transfer of an NPL by an individual to a third-party; and l. Transfer of a ROPOA by an individual to a third-party. The transactions enumerated above, subject to the conditions specified in Sections 7b and 7c of the Regulations, shall be exempt from the following taxes: a. Documentary Stamp Tax on any document evidencing the transfer or dation in payment b. Capital Gains Tax imposed on the transfer of land and/or building treated as capital asset in the hands of the transferor c. Creditable withholding income taxes imposed on the transfer of land and/or building treated as ordinary asset in the hands of the transferor pursuant to Revenue Regulations No. 2-98, as amended, provided that this shall not include exemption from Income Tax under Title II of the NIRC of 1997 d. Value-Added Tax as may be imposed under Title IV of the NIRC of 1997, or Gross Receipts Tax under Title V thereof, whichever is applicable, subject to the rules specified in the Regulations Additional tax exemptions for an SPV are the following: a. The SPV shall be exempt from Income Tax on the net interest income arising from new loans in excess of existing loans, which are extended to a borrower with NPL that has been acquired by the said SPV from an FI within 2 years from March 19, 2003, and which are solely for the purpose of rehabilitating the borrower’s business. b. Any document evidencing the new loans mentioned in (a) above shall be exempt from DST. c. Any document evidencing an SPV’s capital infusion to the business of the borrower with an NPL that has been acquired by the said SPV from an FI within two (2) years from March 19, 2003 shall be exempt from DST. Provided, that the abovementioned tax exemptions shall apply only for a period of not more than 5 years from the date of acquisition of the borrower’s NPL by the said SPV. Any loss that is incurred by an FI as a result of transferring its NPA to an SPV within the period of 2 years from March 19, 2003, excluding accrued interests and penalties receivable, and which had not been previously offset as deduction from gross income, shall be treated as ordinary loss, and may be carried over as a deduction from its taxable gross income for a period of 5 consecutive taxable years immediately following the year of the transfer that resulted to such loss: Provided, that the “tax savings” derived by the FI from such loss carry-over shall not be made available for dividend declaration, but shall be retained as a form of capital build-up: Provided, further, that the FI cannot enjoy this privilege if it enters into a merger, consolidation, or combination with another person, unless, as a result of such merger, consolidation or combination, the shareholders of the said FI gains control of at least 75% or more in nominal value of the outstanding issued shares or paid up capital of the surviving/new corporation: Provided, finally, that the FI shall continue to be subject to the minimum corporate income tax (MCIT) of 2% of its gross income as of the end of the taxable year. An SPV claiming any of the tax exemptions and privileges under the Act on other transactions shall upon request provide the appropriate Certificate of Eligibility (issued by the appropriate Regulatory Authority) to the BIR Commissioner or his duly authorized representative for purposes of examining any taxpayer and the assessment of the correct amount of tax. This is in addition to such other documentary requirements specified in the Regulations. Any existing document or instrument which may qualify for the tax exemption and other privileges under the Act shall be presented/submitted to the RDO concerned within 30 days from the effectivity of this Regulations, otherwise the pertinent penalties incident to late filing shall be imposed.