Shares of Stock Deemed Issued Even if Not Fully Paid, Unless Full Payment is Stipulated in Subscription

May 19, 1972 BIR RULING NO. 017-72 Shares of stock deemed issued even if not fully paid, unless full payment is stipulated in subscription . Gentlemen: This refers to your letter dated March 20, 1972 requesting clarification on whether the 2% stock transaction tax applies only to shares of stocks represented by stock certificates or whether it also applies to transfers or assignment of subscription. In reply, I have the honor to inform you as follows: Shares of stock are deemed issued upon subscription even if they are not fully paid by the stockholder. However, if the subscription is conditional, the shares shall be deemed issued upon fulfillment of the condition. (Karaan, Private Corporations, paragraphs 65, 76 and 77, pp. 67, 79 and 81; citing 11 Fletcher, 284-285, 7 A.C.L. par 169; Lusk v. Stevens, 64 Phil. 1053; Ledesma vs. Buencamino, (S.C.) G.R. No. 46904) Accordingly, transfers of unconditional stock subscriptions are subject to the 2% tax; whereas, transfers of conditional subscriptions before fulfillment of conditional subscriptions after the fulfillment of the conditions are likewise subject to the tax. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue