In the Philippine legal landscape, the transfer of ownership over real property or shares of stock not traded through the local stock exchange is not complete upon the mere execution of a deed of sale or donation. A critical intermediary step is the procurement of a Certificate Authorizing Registration (CAR)—now primarily issued as an Electronic Certificate Authorizing Registration (eCAR)—from the Bureau of Internal Revenue (BIR).

Without this document, the Register of Deeds cannot issue a new Transfer Certificate of Title (TCT), and the Corporate Secretary of a company cannot record the transfer of shares in the Stock and Transfer Book.

1. Understanding the Purpose of the CAR

The CAR serves as proof that the appropriate taxes resulting from the transfer of property have been fully paid to the Philippine government. It validates that the transaction has been audited by the BIR and that the government’s lien for taxes has been satisfied.

2. Taxes Covered by the CAR Process

Depending on the nature of the transfer, several taxes may need to be settled before a CAR is issued:

Capital Gains Tax (CGT): Usually 6% of the gross selling price or fair market value, whichever is higher, for the sale of real property classified as a capital asset.
Creditable Withholding Tax (CWT): Applicable if the seller is habitually engaged in the real estate business.
Value Added Tax (VAT): Applicable to ordinary assets sold by VAT-registered taxpayers.
Documentary Stamp Tax (DST): Generally 1.5% of the transaction value.
Donor’s Tax: If the transfer is a donation.
Estate Tax: If the transfer is by way of succession after the death of the owner.

3. Documentary Requirements

The BIR follows a strict "No Complete Requirements, No Processing" policy. While requirements vary slightly depending on whether the asset is land or shares, the following are standard:

For Real Property:

One-time Transaction (ONETT) Computation Sheet (Tax Checksheet).
Original notarized Deed of Conveyance (e.g., Deed of Absolute Sale, Deed of Donation).
Certified True Copy of the Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT).
Certified True Copy of the Tax Declaration (Latest, for land and improvements).
Tax Clearance from the Local Government Unit (LGU) showing no arrears in Real Property Tax.
Proof of payment of taxes (BIR Form 1706, 2000-OT, etc., with bank validation).

For Shares of Stock:

Original notarized Deed of Sale/Assignment.
Stock Certificate(s) being transferred.
Proof of Acquisition Cost (to determine capital gains).
Audited Financial Statements of the issuing corporation (at the time of sale) to determine the book value of the shares.

4. Step-by-Step Procedure

Step A: Filing and Payment

The taxpayer or their authorized representative must file the tax returns (BIR Forms) and pay the corresponding taxes at an Authorized Agent Bank (AAB) under the jurisdiction of the Revenue District Office (RDO) where the property is located or where the seller is registered.

Step B: Submission of the Application

Once the taxes are paid, the complete set of documentary requirements must be submitted to the ONETT Section of the concerned RDO. A "Routing Slip" is usually issued to track the progress of the application.

Step C: Evaluation and Approval

The Revenue Officer (RO) assigned to the case will evaluate the documents to ensure the tax base used was correct (e.g., checking the Zonal Value vs. the Selling Price). If there is a deficiency, the taxpayer will be required to pay the difference plus penalties before the CAR is processed.

Step D: Generation of eCAR

Once the RO and the Assistant Revenue District Officer (ARDO) or Revenue District Officer (RDO) approve the docket, the system generates the eCAR. This electronic version features a barcode and a unique security code to prevent fraud and tampering.

5. Validity and Revalidation

Under current BIR regulations, an eCAR is valid for one (1) year from the date of issue. If the eCAR expires before it is presented to the Register of Deeds or the Corporate Secretary, it must be surrendered for revalidation. This requires a letter-request and a small certification fee, provided there are no changes in the transaction or the law in the interim.

6. Common Pitfalls to Avoid

Incorrect Jurisdiction: Filing at the wrong RDO. For real property, the RDO is determined by the location of the property. For shares, it is generally the RDO where the seller is registered.
Inconsistent Data: Discrepancies between the names on the Title, the Deed of Sale, and the Tax Declaration can lead to the rejection of the application.
Expired Notarization: Using a Deed of Sale where the Notary Public’s commission has already expired or where the acknowledgment date is problematic.

7. The Role of the Representative

If the buyer or seller cannot personally process the CAR, an authorized representative may do so. However, the BIR requires a Special Power of Attorney (SPA). For SPAs executed abroad, the document must be Apostillized (or authenticated by the Philippine Embassy/Consulate in non-Apostille Convention countries) to be legally recognized in the Philippines.