BIR Ruling [DA-410-99]

July 13, 1999 BIR RULING [DA-410-99] 209-91 dated Oct. 18, 1991 Picazo Buyco Tan Fider & Santos 8th Floor, Singapore Airlines Building 138 H.V. dela Costa Street Salcedo Village Makati City Attention: Atty. Purisimo S. Buyco Gentlemen : This refers to your letter dated April 21, 1999 requesting on behalf of your client, Lopez Sugar Corporation, for a ruling on the tax consequence of the transfer of the trust funds from the present trustees to another trustee. It appears the Lopez Sugar Corporation has established the Lopez Sugar Corporation Employees' Retirement Plan, for the purpose of providing retirement and other benefits for all its regular salaried employees; that on March 4, 1995, the Bureau of Internal Revenue has issued a certification to the effect that the plan has qualified as a reasonable private benefit plan within the contemplation of R.A. No. 4917; that to provide for the necessary funding for the benefits under the Plan, Lopez Sugar Corporation has committee to contribute the amounts provided in the plan; that in order to implement and carry out the provisions of the plan and to insure that no part of the corpus or income of the Fund shall be used for or diverted to purposes other than for the exclusive benefit of the members and their beneficiaries. Lopez Sugar Corporation has appointed Far East Bank & Trust Co. (FEBTC) and Rizal Commercial Banking Corporation (RCBC) as trustees to manage and administer the fund constituted under the plan; that, however, pursuant to the decision of the corporation's Executive Committee, Lopez Sugar Corporation has decided to withdraw the Fund from the present trustees and transfer deem to the Executive Committee, which shall be constituted as the new trustee; that as trustee, the Executive Committee will constitute itself as a body independent of the employer-trustor; and that the said transfer will not, in any way, result to any modification or amendment to the Plan. EaICAD In reply, please be informed that the change of trustee i.e., from the FEBTC and RCBC to the Executive Committee for the purpose of consolidating the administration of the Lopez Sugar Corporation Employees' Retirement Plan is not taxable, and therefore, all properties both real and personal, monies, shares of stock, etc., in the name of the former trustee banks and described as such may be transferred to the newly designated trustee. (BIR Ruling No. 209-91 dated October 18, 1991) 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, Commissioner of Internal Revenue By: (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal & Enforcement Group)