Revised Revenue Code of Bauan 2020

October 26, 2006 BIR RULING [DA-632-06] S. 27; DA-642-04 Siguion Reyna Montecillo & Ongsiangko 4th and 6th Floors, Citibank Center, Paseo de Roxas Makati City Attention: Attys. Jose Lis C. Leagogo, Cesar Manalaysay, Ferdinand M. Hidalgo, and Efren Vincent M. Dizon Gentlemen : This refers to your letter dated May 29, 2006 requesting on behalf of your client, W.C. Heraeus International GmbH, Hanau ("WCH-I") , confirmation of your opinion that the proposed transfer of shares in Heraeus Electronic Materials Philippines, Inc . ("HEP") from WCH-I to Heraeus Beteiligungsverwaltungsgesellschaft mbH ("HB") is not subject to tax since the transfer is part of a worldwide corporate reorganization and also because the beneficial ownership of the HEP shares will remain within The Heraeus Group of Companies, the transferor and the transferee being all subsidiaries of Heraeus Holding GmbH, Hanau ("HGH") their ultimate parent. The facts, as you represent, are as follows : 1. WCH-I is a corporation duly organized and existing under the laws of Germany. 2. HB is likewise a corporation duly organized and existing under the laws of Germany. 3. HEP is a corporation duly organized and existing under the laws of the Philippines. 4. Based on the worldwide corporate structure of the Heraeus Group of Companies, a. WHC-I is 100% owned by W.C. Heraeus GmbH Hanau ("WCH") which is 100% owned by HGH; b. HB is 100% owned by HGH; and c. HEP is 100% owned by WCH-I and its nominees. 5. HGH is presently undertaking a worldwide corporate reorganization among its foreign subsidiaries in an effort to simplify the corporate structure of The Heraeus Group of Companies. One of the effects of the project is the transfer of shareholdings of WCH-I in HEP to HB. 6. WCH-I shall transfer 152,613 shares in HEP with a par value of P1,000.00 per share to HB in exchange for cash. CADacT In reply thereto, please be informed that the proposed transfer of all the outstanding HEP shares consisting of 152,613 shares from WCH-I to HB in accordance with its proposed corporate reorganization is not subject to any Philippine tax. Since the proposed transfer of HEP shares from WCH-I to HB will be in pursuance to a legitimate worldwide corporate reorganization and considering that WCH-I, HB and HEP all belong to the Heraeus Group of Companies, and considering further, that the transferor and the transferee are all subsidiaries of Heraeus Holding GmbH, Hanau ("HGH"), the beneficial ownership of the HEP shares will remain within The Heraeus Group of Companies. Hence, there is no effective transfer of beneficial ownership and no gain will be realized by WCH-I for income tax purposes. (BIR Ruling No. DA-642-04 dated December 17, 2004) This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. Very truly yours, (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service