Tax Consequence of Cancellation and Issuance of Stock Certificates Bearing Stockholder's Name as Naturalized Filipino

March 6, 1984 BIR RULING NO. 051-84 225-00-000-00-051-84 S i r : This refers to your letter dated April 19, 1983 requesting a ruling as to the tax consequence of the cancellation of old stock certificates bearing the stockholder's Chinese name and the issuance of new ones bearing his new name as naturalized Filipino citizen. It is represented that your client, Go Fay and Co., Inc. is requested by one of its stockholders to change pertinent records and stock certificates originally issued to him, such that said records and stock certificates would now bear his new name, "Pepito Ngo" as a naturalized Filipino citizen (under Certificate of Naturalization No. 025457 dated November 3, 1981) instead and in lieu of his former Chinese name, "Go Tian Chiong"; and that for this purpose, the old stock certificates bearing the said stockholder's Chinese name would be cancelled and new stock certificates indicating his new name as a naturalized Filipino citizen would be issued. In reply, please be informed that the cancellation of the stock certificates in the name of "GOTIAN CHIONG", the stockholder's Chinese name, and the issuance of new certificates of stocks to the same stockholder bearing his new name as a naturalized Filipino citizen is not subject to the capital gains tax prescribed by Section 34(g) of the Tax Code as amended by B.P. Blg. 221 which is imposed on the sale or exchange of a capital assets. In this case there is no sale or exchange of capital assets but only cancellation of the old stock certificates and the issuance of new stock certificates representing and covering same shares of stock, to the same person. Moreover, the issuance of new certificates of stock bearing the new name of the stockholder to replace prior or original certificates is not subject to documentary stamp tax since there is no change in ownership and provided that there is also no change in face value. However, it should be noted on the new certificate of stock that the proper documentary stamp has been affixed to the original certificates. (Sec. 15, Regulations No. 26) Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner