BIR Ruling

November 17, 1971 Mr. Antonio A. Tulio Nabunturan, Davao del Norte S i r : This refers to your letter of even date requesting information as to whether or not the sale to you of shares of stock of Mabini Timber Corporation acquired by Messrs. Quirico Luga, Desiderio Luga and Alberto Luga during the period from June, 1967 to December, 1969, is subject to the 2% stock transaction tax imposed in Section 195-B of the Tax Code. In reply, I have the honor to inform you that under Section 195-B of the Tax Code, every sale, exchange, transfer or similar transaction intended to convey ownership of, or title to, any share or shares of stock, is subject to the tax therein imposed, the tax to be paid by the seller or transferor, except the following: (1) The issuance by a corporation of shares of stock, whether original or additional issues; (2) The donation of any share or shares of stock made to any educational or charitable corporation, institution, foundation, trust or philanthropic organization or research institution or organization as defined in and subject to the conditions imposed by Section one hundred ten of the Tax Code; (3) The exchange of any share or shares of stock effected pursuant to the plan for merger or consolidation under paragraph (2), (b), Section Thirty-five of the Tax Code; (4) The transfer of shares of stock by testate or intestate succession; and (5) The sale, exchange or transfer of shares acquired before the effectivity of Republic Act No. 6141. It appearing that the transfer of the aforesaid shares of stock falls under the last exception, the same is not subject to the 2% tax imposed in Section 195-B of the Tax Code. Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue