BIR Ruling [DA-102-01]

June 1, 2001 BIR RULING [DA-102-01] Sec. 178; UN-341-94 Indo Phil Textile Mills, Inc . Unit A 32nd Floor, Rufino Pacific Tower 6784 Ayala Avenue cor. Herrera Streets Makati City, Philippines Attention: Mr . Editho J . Capinpuyan Finance Manager Gentlemen : This refers to your letter dated March 9, 2001 requesting for a ruling that the transfer of a proprietary club share to another is exempt from any tax. It is represented that your company INDO PHIL TEXTILE MILLS, INC. (INDOPHIL) is the real and beneficial owner of one (1) Manila Polo Club, Proprietary Membership Certificate No. 3042 issued in November 1984 in the name of Hem Chand Sacheti, then the President of INDOPHIL up to the time of his death in 1999; that the Manila Polo Club Membership Certificate No. 3042 will be transferred to V.K. Maloo, the incumbent President of INDOPHIL; and that both Messrs. Hem Chand Sacheti and V.K. Maloo are nominees and/or trustee of said membership certificate. caSEAH In reply, please be informed that since the aforementioned proprietary membership certificate is actually owned by INDOPHIL and that both Messrs. Hem Chand Sacheti and V.K. Maloo are mere nominees and/or trustee of INDOPHIL of said proprietary membership certificate, the transfer of said certificate from Mr. Hem Chand Sacheti to V.K. Maloo, the incumbent president of INDOPHIL, is not therefore subject to capital gains tax. Moreover, the transfer of the said Certificate is not subject to the documentary stamp tax imposed under Section 176 of the Tax Code of 1997. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. Very truly yours, (SGD.) EDMUNDO P. GUEVARA Deputy Commissioner Legal and Inspection Group