BIR Ruling

September 29, 1972 Philippine Duplicators Inc. JMT Building 6764 Ayala Avenue Makati, Rizal D-711 Attention: Mr . Bonifacio O . Bueno Corporate Secretary Gentlemen : This refers to your letter dated July 26, 1972 requesting information whether the exemption under sub-paragraph (5) of Section 195-B of the Tax Code, as inserted by R.A. No. 6141 which says, in effect, that the 2% tax shall not apply to the sale, exchange or transfer of shares acquired before the effectivity R.A. No. 6141 on November 5, 1970, apply to a stock certificate (a) acquired by heirs at the time of death of their predecessor before November 5, 1970, but (b) the date of order or extra-judicial settlement was after November 5, 1970 or (c) the issuance of the said stock was also after November 5, 1970. In this connection, you also want to know whether you can issue as collection agent under the said law in collecting the 2% tax, the usual official receipt of your company to the payor before remitting the same to the proper BIR agent. aisadc In reply, I have the honor to inform you that since the stock certificate was acquired by the heirs by succession at the time of death of their predecessor before the effectivity of R.A. No. 6141, it is exempt from the said 2% tax under sub-paragraph (4) of the said Section 195-B of the Tax Code which exempts the transfer of shares of stock by testate or intestate succession. Section 7(d) of Revenue Regulations No. 2-70 dated November 11, 1970, otherwise known as the Stock Transactions Tax Regulations, provides, thus: "(d) Receipt of tax payment . Payment shall be covered by an official receipt to be issued by the stock broker, transfer agent or secretary of the corporation, as the case may be. The receipt shall indicate the name, address and Taxpayer Account Number (TAN) of the seller or transferor, kind and number of shares (common or preferred), selling price or market value and amount of tax. The official receipt must, prior to use, be first registered with the Bureau of Internal Revenue. "Stock brokers may use the current confirmation of sales as official receipts provided that said confirmation of sales contain the information provided for in the preceding paragraph hereof and are first registered with the Bureau of Internal Revenue prior to use." From the foregoing quoted provisions, therefore, you may issue the official receipt of your company in the collection of the said 2% tax which, however, must previously be registered with this Office indicating the following: 1. The name, address and Taxpayer Account Number (TAN) of the seller or transferor; 2. Kind and number of shares (common and preferred); 3. Selling price or market value; and 4. Amount of tax paid. cdtech Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue