BIR Ruling

June 20, 1973 J. S. Zulueta & Co. P. O. Box 2405 Manila Gentlemen : This refers to your letter dated June 19, 1973 requesting in effect whether or not the transfer of subscription rights to shares of stock is subject to the stock transaction tax prescribed by Republic Act No. 6141, as amended by Presidential Decree No. 10. cdta It is represented that in January, 1973, subscribed to the shares of the capital stock of a pioneer-registered enterprise and he may sell or assign his subscription to corporation before the end of June, 1973. In reply, I have the honor to inform you as follows: Shares of stock are deemed issued upon subscription even if they are not fully paid by the stockholder. (Karaan, private Corporations, paragraphs 65, 76 and 77, pp. 67, 79 and 81, citing 11 Fletcher, 284-285, 7 R.G.E. par. 169, Lusk vs. Stevens, 64 Phil. 1053, Ledesma v. Buencamino (S.C.) G. R. No. L-46904). Such being the case, the sale or transfer of subscriptions rights is a stock transaction within the ambit of Republic Act No. 6141, as amended, and, therefore, the transfer or sale of the subscription rights covered by your inquiry is subject to the stock transaction tax prescribed by Republic Act No. 6141, as amended by Presidential Decree No. 10. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue