Elizabeth F. Villa-Real

June 26, 2009 BIR RULING [DA-(I-014) 331-09] DA228-05; 24 (C); 98; 176 Elizabeth F. Villa-Real Alta-Meco Compound Km. 15 Sun Valley Drive South Super Highway Paraaque City Madam : This refers to your letter dated August 8, 2008 stating that Equi-Land, Inc. is the true and beneficial owner of one (1) proprietary membership share (proprietary share) in the Tagaytay Midlands Golf Club, Inc. (Club) having paid valuable consideration to purchase the same from the Club for the exclusive use of its corporate officer; that however, since John C.B. Go has ended his tenure as Chairman of the Corporation but before his retirement, he executed a Declaration of Trust with Assignment acknowledging that Equi-Land, Inc. is the absolute owner of the said share and transferring the same in favor of the new officer, Jonathan C.B. Go II, as the newly-designated nominee and playing representative; and that the assignment of the proprietary share is without any consideration. Based on the foregoing representations, you now request for confirmation of your opinion that 1. The transfer of the proprietary share is not subject to capital gains tax because it does not involve any monetary consideration and is merely a transfer of legal title to the proprietary share from one nominee of the corporation to another nominee; 2. There being no donative intent under the above-described circumstances, the transfer is not subject to donor's tax; and 3. The transfer is not subject to the documentary stamp tax imposed under Section 176 of the Tax Code of 1997, as amended. CIaASH In reply thereto, please be informed that since the aforementioned proprietary share is actually owned by Equi-Land, Inc. and that both John C.B. Go and Jonathan C.B. Go II are mere nominees and/or trustees of Equi-Land, Inc., the transfer of said certificate from John C.B. Go to Jonathan C.B. Go II is not subject to capital gains tax. Moreover, since the transfer of the proprietary membership from one nominee to another is without consideration, the same is not subject to gift tax imposed under Section 98 of the Tax Code of 1997. IaAEHD Finally, the transfer of the said certificate is not subject to documentary stamp tax imposed under Section 176 of the Tax Code of 1997, as amended. However, the notarial acknowledgment is subject to the documentary stamp tax of P15.00 pursuant to Section 188, supra. This will therefore, serve as authority for the Corporate Secretary to transfer the membership share in the name of the newly designated officer-nominee, Jonathan C.B. Go II. aSITDC Very truly yours, (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service