This Revenue Regulation is issued on January 8, 2025 implements the tax provisions of RA No. 9267, otherwise known as “The Securitization Act of 2004.”
The sale or transfer of assets to the Special Purpose Entity (SPE), including sale or transfer of any and all security interest thereto, made in accordance with the Securitization Plan shall be exempted from Value-Added Tax (VAT) and Documentary Stamp Tax (DST) or any other taxes imposed in lieu thereof.
Moreover, pursuant to Section 28 of RA No. 9267, the transfer of assets by dation in payment (dacion en pago) by the obligor in favor of the obligee shall not be subject to Capital Gains Tax as imposed under Section 27 (D) (5) of the Tax Code.
The original issuance of asset-backed securities (ABS) and other securites related solely to such securitization transaction, such as, but not limited to, seller’s equity, subordinated debt instruments purchased by the originator, and other related forms of credit enhancement shall be exempt from VAT, or any other taxes imposed from DST and VAT, or any other taxes imposed in lieu thereof.
The yield or income from the ABS shall be subject to a twenty percent (20%) Final Withholding Tax. However, the yield or income of investors from any low cost or socialized housing-related ABS shall be exempt from Income Tax.
Such yield or income must come from the securitization of the mortgage and housing-related receivables of the government housing agencies. The low-cost or socialized housing-related ABS must be certified as such by the Department of Human Settlements and Urban Development and the Department of Finance.