BIR Ruling [DA-642-04]

December 17, 2004 BIR RULING [DA-642-04] S.27; DA-144-03 Siguion Reyna Montecillo & Ongsiangko 4th and 6th Floors, Citibank Center, Paseo de Roxas Makati City Attention: Attys. Jose Lis C. Leagogo, Cesar Manalaysay, Monina V. Vierneza-Dejon, Ajee A. Tiu-Co Gentlemen : This refers to your letter dated November 17, 2004 requesting on behalf of your client, The Thomsom (Philippines) Corporation , confirmation that the proposed transfer of shares in TPC ( "TPC shares" ) from Datastream International Limited ("Datastream") to TTC (1994) Limited ("TTC") is not subject to tax since the transfer is part of a worldwide corporate reorganization. The facts, as you represent, are as follows 1. Datastream is a corporation organized and existing under the laws of England. 2. TTC is a corporation organized under the laws of England and Wales, among the primary purpose of which is to "acquire and hold any kind of interest in, or provide any, form of capital for, any enterprise, concern or person, to carry on business as a holding and investment company, and, generally and in addition, to carry out, or through subsidiaries or otherwise be interested or participate in, all kinds of financial, commercial, transport, industrial, technological and other transactions and activities." 3. Based on the worldwide corporate structure of the Thomson Group of Companies, a. Datastream, is 100% owned by Thomson Information and Solutions ("TIS"); and b. TTC is 100% owned by The Thomson Organization Ltd. (England) and Datastream, TTC and TPC all belong to The Thomson Group of Companies. 4. Datastream shall transfer 23,991 shares in TPC with a par value of P100.00 per share to TTC. In reply thereto, please be informed that the proposed transfer of all the outstanding TPC shares consisting of 23,991 shares from Datastream to TTC in accordance with its proposed corporate reorganization is not subject to any Philippine tax. Since the proposed transfer of TPC shares from Datastream to TTC will be in pursuance to a legitimate worldwide corporate reorganization and considering that Datastream, TTC and TPC all belong to the Thompson Group of Companies, and considering further, that the transferor and the transferee being all subsidiaries of The Thompson Group of Companies the beneficial ownership of the TPC shares will remain within The Thompson Group of Companies. Hence, there is no effective transfer of beneficial ownership, no gain will be realized by Datastream for income tax purposes. (BIR Ruling No. DA-144-03 dated May 5, 2003) aTEHIC 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.) JOSE MARIO C. BUAG Deputy Commissioner Legal and Inspection Group