Sale of Mobil U.S. Shares by U.S. Citizens Acquired During their Stay in the U.S. Not Subject to Philippine Taxes

December 5, 1994 BIR RULING NO. 170-94 22 (b) 000-00 170-94 Ms. Antonia U. Jadulko 131 Calamba Street Sta. Mesa Heights Quezon City M a d a m : This refers to your letter dated November 23, 1994 stating that you and your husband, Philip A. Jadulko, migrated to the United States of America and acquired American citizenship in the 1950's; that both of you have been staying and working there ever since, and have acquired properties, including 736 common shares of the Mobil Oil Corporation which your husband acquired when he was working for Mobil Corporation of New York (Mobil U.S.); that when your husband died on November 21, 1993 in Quezon City, you decided to sell the Mobil U.S. shares; that however, you were asked by your stockbroker, Merill Lynch, to secure a tax waiver from this Office; and that the U.S. Internal Revenue Service has issued a certificate authorizing the transfer of the securities without tax liability under Federal Estate Tax Law. Based on the foregoing representations, you now request in effect for a ruling confirming your opinion that your sale of the aforementioned Mobil U.S. shares is not subject to Philippine taxes inasmuch as you and your late husband are U.S. citizens and the foregoing shares were acquired during your stay in the U.S. In reply, please be informed that under Section 22(b) of the Tax Code, as amended, only capital gains realized by a non-resident alien not engaged in trade or business within the Philippines from sales of shares of stock in any domestic corporation and real property shall be subject to the tax prescribed under Sub-sections (d) and (e) of Section 21 of the same Code. Such being the case, and since you are an American citizen and the shares of stock in question are shares of stock of a foreign corporation, this Office is hereby confirming your opinion that your aforesaid sale of Mobil U.S. shares is not subject to Philippine taxes. cdtech Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue