The onus of securing eCARs in transferring unlisted shares

Transferring shares not listed and traded on a stock exchange involves several steps and sellers (and buyers) often must consider documents apart from the deed of sale or transfer. One of the key documents is securing proof of payment of taxes on the sale or transfer. A document most sellers or buyers may not be familiar with is the electronic Certificate Authorizing Registration (eCAR), which serves as proof that the taxes applicable for the transfer of the shares have been paid. In filing the eCAR application, part of the documentary requirements attached are copies of the proof and filing and payment of applicable tax returns, which may involve capital gains tax, documentary stamp tax or donors’ tax, depending on the transaction.

In order to secure the eCAR, the party responsible or their representative must file the application with the Revenue District Office with jurisdiction over the taxpayer-seller. With the passage of the Ease of Paying Taxes (EOPT) Act empowering taxpayers to file tax returns electronically and pay taxes with any Authorized Agent Bank (AAB), a question arises whether the eCAR may be filed with any RDO.

The Bureau of Internal Revenue (BIR) clarified in Revenue Memorandum Circular (RMC) 075-2026, issued last July 8, 2026, that the eCAR application should still be filed in specific RDOs. The RMC provides that in the case of transfers of shares of stock not listed on exchange, the applicable RDO is whichever has jurisdiction over the residence of the seller/transferor (in case of individuals) or the RDO where the taxpayer is registered (for non-individuals).

The RMC also reiterated that incomplete documents or applications will not be accepted. The BIR will provide a checklist of documentary requirements to the taxpayer-applicant indicating the documents they must submit or comply with to complete the application.

In case additional tax is to be paid based on the approved one-time transaction computation sheet, the appropriate tax form is BIR Form 1707 for capital gains tax on the onerous transfer of shares of stock not listed on exchange, BIR Form 2000-OT for documentary stamp tax, and BIR Form 1800 for donors’ tax.

The RMC mandates that the total processing time for the eCAR ‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‍shall not exceed seven working days from the date of receipt of complete documentary requirements and payment for taxes and fees, if applicable, for the eCAR application. The seven days are counted from the next working days following the receipt of the completed application.

In practice, the taxpayer-applicant will be issued a claim stub instructing the taxpayer to return on a specific date. If upon review the documents submitted are deemed by the BIR to comply with all rules and regulations, the eCAR will be received on the same day. Otherwise, instructions will be provided for the taxpayer’s compliance.

Through RMC 75-2026, the BIR provides predictability and guidance to taxpayers as part of its ease of doing business efforts. Taxpayers, on the other hand, should keep abreast of developments in the tax field to ensure that documentation for tax compliance is complete and accurate, and be aware of changes in rules or regulations. As the burden to prove compliance with tax rules and regulations is on the taxpayers, checking tax updates and adjusting internal policies, when necessary, should be part of routine risk management, as noncompliance can result in delays or penalties, if applicable.

Erika Louise Laforteza is a supervisor under the Tax Group of R.G. Manabat & Co. (KPMG in the Philippines), a Philippine partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. The firm has been recognized as a Tier 1 in Transfer Pricing Practice and in General Corporate Tax Practice by the International Tax Review. For more information, you may reach out to Erika Louise Laforteza or Mary Karen Quizon-Sakkam through [email protected], social media or visit www.home.kpmg/ph.

This article is for general information purposes only and should not be considered as professional advice to a specific issue or entity. The views and opinions expressed herein are those of the author and do not necessarily represent KPMG International or KPMG in the Philippines.