BIR Ruling No. 078-83

May 9, 1983 BIR RULING NO. 078-83 S i r : This refers to your letter dated November 24, 182 requesting a ruling as to whether the St. Joseph Associates & Co., Inc., 56 Gilmore Ave., New Manila Quezon City, and the Mayon Trading Company, Inc., 1240-44 Rizal Ave., Manila, are subject to the 10% corporate development tax imposed under Section 24(e) of the Tax Code of 1977, as amended. It is represented that five (5) stockholders of St. Joseph Associates & Co., Inc., as well as Mayon Trading Company, Inc., do not own at least 50% of the total outstanding capital stock of the corporation. In reply thereto, I have the honor to inform you that St. Joseph Associates & Co., Inc., as well as Mayon Trading Company, Inc., are not closely-held corporations for purposes of the 10% corporate development tax imposed by Section 24(e) of the Tax Code, as amended by Presidential Decree No. 1773. A closely-held corporation, for purposes of the 10% corporate development tax, is a corporation at least 50% of the total combined voting power of all classes of stocks entitled to vote, at any time during the taxable year, is owned directly or indirectly by or for not more than five (5) persons, natural or juridical. Since five stockholders of both corporation do not own at least 50% of the total combined voting power of all classes of stock entitled to vote at any time during the taxable year, both corporations are not considered as closely-held corporations. Accordingly, St. Joseph Associates & Co., Inc. and Mayon Trading Company, Inc., are not subject to the 10% corporate development tax. aisadc Very truly yours, (SGD.) ROMULO M. VILLA Acting Commissioner Bureau of Internal Revenue