On Jan. 8, PHI Tax issued rules re tax provisions of Securitization act.
PHI Tax published Revenue regulations no. 2-2025 in order to implement certain tax provisions of R.A. no. 9267 which is also known as the Securitization act of 2004.
Regulation Overview
The sale or transfer of assets to special purpose entity (SPE) made in accordance with the securitization plan shall be exempted from VAT and documentary stamp tax (DST).
Secondary trades and subsequent transfer of asset-backed securities (ABS) including credit enhancement in such instruments shall also be exempted from VAT and DST.
The yield or income form the ABS shall be subject to 20% final withholding tax.
However, yield/income of investors from any low cost or socialized housing-related ABS shall be exempted from income tax; such yield/income must come from securitization of the mortgage and housing-related receivables of the government housing agencies.
Effectiveness
The regulation shall be effective from 15 days from its publication, i.e. Jan. 23, 2025.
