Practice question
A qualifying financial instrument was issued before July 1,2025 with a lawful preferential tax rate. The original agreement remains within its remaining maturity, with no renewal or disqualifying event stipulated. A collector applies a new CMEPA rate solely because payment occurs in 2026. Which provision must be considered?
- No transitional provision exists
- Section 28 preserves the applicable pre-July 1,2025 treatment for the relevant agreement’s remaining maturity under its terms
- Every financial instrument is permanently taxfree
- Every later renewal automaticallyinheritsoldterms
- Payment date alone cancels every transition
Legal references
- RA 12214 (CMEPA), Sections 3-4, 8 and 28, amended NIRC Sections 22, 24 and 32 and transition: https://lawphil.net/statutes/repacts/ra2025/ra_12214_2025.html
Answer this question in flashcards to review your response and continue practicing.