Resulting Capital Structure Adopted by the Signetics Filipinas Corporation

March 4, 1987 BIR RULING NO. 066-87 188 000-00 066-87 Gentlemen : With reference to your Min. No. 5 January 26, 1987 requesting a ruling on the resulting capital structure adopted by the Signetics Filipinas Corporation relative to the equity investment therein of US $10 million by the Team Holdings Limited, U.S.A. under the debt to equity conversion program, please be informed that since the foregoing transaction involves original issuance of shares of stock by Signetics Filipinas Corporation to Team Holdings Limited, U.S.A., the same is not subject to the capital gains tax imposed by Section 24(s)(2) of the Tax Code as amended. However, considering that the debt to equity conversion program will result in the original issuance of certificates of stock by Signetics Filipinas Corporation, in favor of Team Holdings Limited, U.S.A., said original issue of certificates of stock is subject to the documentary stamp tax of P1.70 on each P200 or fractional part thereof based on the par value of the certificate of stock. If the stocks were issued without par value, the documentary stamp tax should be based upon the actual consideration received by the corporation for the original issuance of the certificate. (Section 188 of the Tax Code, as amended). Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner