Sanyo Plastic Philippines, Inc.

October 20, 2008 BIR RULING [DA-(ET-009) 320-08] Sanyo Plastic Philippines, Inc. 110 East Main Avenue Special Export Processing Zone Laguna, Technopark Bian, Laguna Attention: Ms. Dheng E. Quilantang Finance Assistant Manager Gentlemen : This refers to your letter dated August 27, 2008 stating that Sanyo Plastic Philippines, Inc. is a domestic corporation duly registered with the Securities and Exchange Commission (SEC); that it is primarily organized to engage in and carry on the trade or business of manufacturing, importing, exporting, selling (on wholesale basis only) or otherwise dealing in a variety of products such as but not limited to control panels, remote controllers, molds for the manufacture of said products, including components and parts thereof, and generally to perform any and all acts connected with the business aforementioned or arising therefrom or incidental thereto; that it has an authorized capital stock of P100,000,000.00 divided into 100,000 shares with a par value of P1,000.00 per share; that one of its stockholders, Yoshitaro Ishii, a Japanese national and resident died last September 24, 2007; that at the time of his death, he has subscribed to 14,889 shares of the capital stock of the said corporation or with an aggregate par value of P14,889,000.00; that his estate tax declaration and the corresponding taxes were filed and paid in Japan; and that the said shares of stock will be inherited by his wife and son who are Japanese non-resident and a Japanese resident, respectively. In connection therewith, you now request for an opinion as to whether or not the transfer of the shares of stock in a Philippine corporation to the surviving spouse and son of the late Yoshitaro Ishii is subject to estate tax in the Philippines pursuant to Section 85 of the Tax Code of 1997, as implemented by Revenue Regulations No. 2-2003. In reply thereto, please be informed that Section 85 of the Tax Code of 1997 provides that the value of the gross estate of the decedent shall be determined by including the value at the time of his death of all property, real or personal, tangible or intangible, wherever situated: Provided, however, that in the case of a non-resident decedent who at the time of his death was not a citizen of the Philippines, only that part of the entire gross estate which is situated in the Philippines shall be included in his taxable estate. Considering that at the time of death of Yoshitaro Ishii, the only property left by the latter in the Philippines consists merely of shares of stock in Sanyo Plastic Philippines, Inc., to which he had beneficial interest with a book value of P14,889,000.00, the same shall be included in his gross estate for purposes of computing the Philippine estate tax under Section 84 of the Tax Code of 1997. Accordingly, this Office holds that the heirs of the late Yoshitaro Ishii, a non-resident decedent, should file the estate tax return and pay the corresponding estate tax due on the transmission of the said estate to the heirs. 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. THaDAE Very truly yours, (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service