BIR Ruling No. 053-80

November 14, 1980 BIR RULING NO. 053-80 035-c2c 000-78 53-80 Messrs. Sycip, Gorres, Velayo & Co. P.O. Box 589 M a n i l a Attention : Mr . M . Gutierrez Tax Division Gentlemen: This refers to your letter dated November 4, 1977, requesting confirmation of your opinion to the effect that the conversion in 1956 of certain trademarks owned by Union Carbide Corporation of New York, U.S.A. (Carbide US) into equity or shares of stock of Union Carbide Philippines, Inc. (Carbide Philippines) is not subject to tax. It is represented that in 1956, Carbide US transferred certain trademarks valued at $175,000 or P350,000 to Carbide Philippines (formerly National Carbon Philippines, Inc.) in exchange solely for shares of stock of the latter equivalent to P350,000 or 3,500 shares, with a par value of P100 per share; and that the investment was duly approved by the Securities & Exchange Commission in its resolution dated September 26 and December 18, 1956. In reply thereto, I have the honor to inform you that the transfer in 1956 by Carbine US of certain trademarks valued at $175,000 or P350,000 to Carbide Philippines in exchange solely for shares of stock of the latter valued at P350,000 or 3,500 shares is not subject to tax, it appearing that after the exchange Carbide US gains control of Carbide Philippines. Moreover, according to the Securities and Exchange Commission, in its resolutions of September 26 and December 18, 1956, the trademarks "are reasonably worth" the total par value of the shares. Very truly yours, RUBEN B. ANCHETA Acting Commissioner