BIR Ruling [DA-037-96]

January 25, 1996 BIR RULING [DA-037-96] Atty. Francis R. Guzman Revenue District Officer Revenue District Office No 41 Mandaluyong City S i r : This refers to your letter dated January 22, 1996 requesting a ruling as to whether or not the gain derived by a corporation from the sale of its shares of stock not traded through a local stock exchange acquired by it in a tax-deferred exchange of properties shall be subject to the 35% corporate income tax under Section 24 (a) or to the final capital gains tax prescribed under Section 24 (e) (2) (A) both of the Tax Code, as amended. It is represented that the corporation is neither a dealer in securities nor a bank or a non-bank financial intermediaries. In reply thereto, please be informed that the capital gains realized by a corporation from the sale of its unlisted shares of stock which were acquired from a tax-deferred exchange of properties shall be subject to a tax of 10% if the capital gain is not over P100,000 and 20% if the capital gain is over P100,000 pursuant to Section 24 (e) (2) (A) of the Tax Code, as amended. BIR Ruling No. 163-90 dated August 27, 1990; BIR Ruling No. 221-91 dated October 31, 1991]. The tax shall be paid by the seller-stockholder. cdtech Very truly yours, ALICIA P. CLEMENO Assistant Commissioner (Legal Service) By: ALICIA L. TOMACRUZ Head Revenue Executive Assistant (Legal Service)