Definition of "Sale" Under the Revenue Code
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Abstract
This article aimed to study the definition of “sale” under Sections 39 and 91/1(4) of the Revenue Code. The study found that the meaning of “sale” under these two sections includes the sale with the right of redemption, where the ownership of the property under the sale with the right of redemption has transferred to the buyer under an agreement that the seller has a right to reclaim his property. As such, the ownership of the property sold with the right of redemption has not been completely transferred to the buyer. Whenever a transaction relating to the sale of immovable property with the right of redemption is conducted at the Land Office, the seller must pay income tax, specific business tax, fees, and stamp duty at the rates which are based on the tax assessment rates generally applied to the transferred immovable property. As a result, the seller under the sale of the right of redemption wishing to use his immovable property as collateral for a loan similarly as the mortgagor but was forced to enter into a sale with the right of redemption agreement must pay tax at the rates as high as the rates generally imposed upon the seller of the immovable property. Thus, this is unfair. The researcher suggests that Sections 39 and 91/1(4) of the Revenue Code be amended by deleting the words “sale with right of redemption” from the definition of “sale” so as to ensure that the seller is fairly treated similarly as a mortgagor.
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Views and opinions appearing in the Journal it is the responsibility of the author of the article, and does not constitute the view and responsibility of the editorial team.
References
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