Tax Consequences of the Transfer of Certain Shares of Stock

June 27, 1988 BIR RULING NO. 264-88 24-a-2 161-83 264-88 Gentlemen : This refers to your letter dated May 25, 1988 requesting a ruling on the tax consequences of the transfer of Nobel Industries Sweden AB (Nobel) of certain shares of stock (Eurasia shares) in Eurasia Match, Inc. a domestic corporation, beneficially owned by Nobel but still registered in the name of Kema Nobel AB (KemaNobel) to NN Financing and Leasing SA (NN) in exchange for NN shares of stock. It is represented that KemaNobel is a corporation organized and existing under the laws of Sweden; that it is the registered owner of 30% of the outstanding capital stock of Eurasia Match, Inc.; that KemaNobel is a wholly-owned subsidiary of Nobel, a corporation likewise organized and existing under the laws of Sweden; that NN, a corporation organized and existing under the laws of Switzerland is also a wholly-owned subsidiary of Nobel; that Nobel, KemaNobel and NN are not engaged in trade or business in the Philippines; that on September 1, 1986, Nobel as the beneficial owner of the 30% shares in Eurasia Match, Inc. (still registered in the name of KemaNobel) transferred the said 30% shareholdings to NN in exchange for fully paid and non-assessable NN shares; and that no cash is involved in the transfer of shares. In reply thereto, please be informed that, on the basic of the facts as herein represented no sale of shares of stock took place between Nobel and its wholly-owned subsidiary NN involving the 30% Eurasia shares registered in the name of KemaNobel, another wholly-owned subsidiary of Nobel. Consequently, no gain was realized by Nobel for income tax purposes. aisadc Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner