BIR Ruling

December 21, 1972 Sycip, Gorres, Velayo & Co. 6760 Ayala Avenue, Makati Rizal Gentlemen : This refers to your letter dated December 16, 1972 requesting for a ruling to the effect that the subsequent transfer of "street certificates" placed in the name of a stockbroker, as nominee, to the name of the beneficial or actual owner thereof, is not subject to the stock transfer tax prescribed under R. A. 6141. Under your letter, you stated that upon the purchase of shares of stock by a broker acting as nominee for the beneficial or actual owner of the shares, the shares are placed in the broker's name as "street certificates". The stock transfer tax is paid on this purchase or transaction. Subsequently, the shares or "street certificates" are transferred in the name of the actual or beneficial owner. You now request confirmation that this subsequent transfer is no longer subject to the stock transfer tax. In reply, I have the honor to inform you that the stock transfer tax under Section 195-B of the Tax Code as inserted by R.A. 6141 is imposed on every sale, exchange, transfer or similar transaction intended to convey ownership of or title to any shares of stock. The subsequent transfer of "street certificates" from the name of the nominee-stockbroker to their actual or beneficial owner will not result in the transfer of ownership of or title to the shares and is not, therefor, subject to the stock transaction tax because this transfer cannot be said as conveying ownership or title to the shares as contemplated by R.A. 6141. The stockbroker, under the circumstances, merely holds the shares in a representative capacity or as an agent of the actual or beneficial owner in whose name the shares are transferred. aisadc Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue