Shares of Stock of Philex Mining Corporation, Subject to the Donor's Tax

February 15, 1989 BIR RULING NO. 025-89 98 000-00 025-89 S i r : This refers to your letter dated January 27, 1989 stating that your client, who is an American citizen and a resident of Hawaii, will donate to the Child and Family Welfare Fund, a non-profit charitable institution duly registered under the laws of the United States, one million shares of Class B Philex Mining Corporation, a Filipino corporation, traded at the Manila and Makati Stock Exchanges, with a present value of P400,000; and that said donation shall be used for charitable purposes in the Philippines. cdtech Based on the foregoing facts, you now request information as to whether under Philippine tax laws, the abovementioned donation is subject to tax. In reply, please be informed that under Section 98 of the Tax Code, as amended, where the donor was a non-resident alien at the time of the donation, his real and personal property so transferred but which are situated outside the Philippines shall not be included as part of his gross gift. Shares issued by a domestic corporation shall be considered as situated in the Philippines. Accordingly, since the contemplated donation would consist of shares of stock of Philex Mining Corporation, a domestic corporation, it is, therefore, subject to the donor's tax. However, no donor's tax shall be imposed and collected on the donation of intangible personal property, like the domestic shares adverted to in your inquiry, if the donor at the time of the donation was a citizen and resident of a foreign country which at the time of his donation did not impose a transfer tax of any character in respect of intangible personal property of citizens of the Philippines not residing in that foreign country, or if the laws of the foreign country of which the donor was a citizen and resident at the time of his donation allow a similar exemption from transfer taxes of every character or description in respect of intangible personal property owned by citizens of the Philippines not residing in that foreign country. cdta Very truly yours, (SGD.) JOSE U. ONG Commissioner