BIR Ruling [DA-691-06]

December 7, 2006 BIR RULING [DA-691-06] Section 27; DA-642-04 Quintiles Philippines, Inc . 1703 Robinson's Equitable PCI Tower ADB Avenue, Ortigas Center, Pasig City Attention: Ms. Lerie Seguin Gentlemen : This refers to your letter dated June 22, 2006 requesting for a ruling on the tax consequence of a transfer of ownership without consideration or sale. It is represented that Quintiles Philippines, Inc. (Quintiles-Phil), with office address at 1703 Robinson Equitable Tower, ADB Avenue, Ortigas Center, Pasig City, with TIN 202-724-400-000, is registered at Revenue District Office No. 43 and registered with the Securities and Exchange Commission; that Quintiles-Phil provides clinical research services, pharmaceutical sales and marketing services and other related activities permitted by law; that Quintiles-Phil is a wholly owned subsidiary of Quintiles Transnational Corporation (Quintiles-Trans), a corporation incorporated in the United States of America; that as part of its internal reorganization, the Board of Directors of Quintiles-Trans authorized the transfer of its ownership interests in various subsidiaries, including Quintiles-Phil to Quintiles Pharma, Inc. (Quintiles-Pharma), a corporation organized under the laws of the United States of America; and that no sale was made nor consideration was paid by Quintiles-Pharma. aEcSIH In reply, please be informed that since the transfer of the ownership interests of Quintiles-Trans in Quintiles-Phil to Quintiles-Pharma is in accordance with its internal reorganization and considering that Quintiles-Phil and Quintiles Pharma are all subsidiaries of Quintiles Trans, the beneficial ownership of the shares will remain within the Quintiles Group. Hence, there is no effective transfer of beneficial ownership and no gain will be realized for income tax purposes. (BIR Ruling No. DA-144-03 dated May 5, 2003) This ruling is issued on the basis of the foregoing representations. 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.) JAMES H. ROLDAN Assistant Commissioner Legal Service