By Iris C. Gonzales (The Philippine Star) Updated July 09, 2011 12:00 AM
MANILA, Philippines - The Bureau of Internal Revenue (BIR) is set to finally implement the taxation rules of the Real Estate Investment Trust Act or REIT, its top official said yesterday.
BIR Commissioner Kim Henares said that the rules are likely to be released next week and implemented within the month. “It will probably be out next week,” Henares said.
In December 2009, Congress passed the REIT Act but its implementation has been put on hold as fiscal authorities and the Securities and Exchange Commission (SEC) failed to agree on how to divide the ownership between real estate companies and the public.
Incentives under the REIT are expected to translate to losses of P10 billion for the government.
According to the Department of Finance (DOF), REITs must float at least 51 percent of the shares to the public to avail of tax incentives and other perks.
The local equities market, on the other hand, preferred 33 percent.
Companies that own and operate income-generating real estate assets are considered REIT companies. These companies include include offices, apartment buildings, hotels, warehouses, shopping centers and highways.
Real estate developers led by Ayala Land Inc., SM Prime Holdings Inc. and Robinsons Land Corp. have expressed interest in doing REIT offerings.
After months of standoff, the government and the private sector reached a compromise deal requiring a minimum public float of 40 percent that will increase to 67 percent within three years after listing of the REIT companies.
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