Transfer of All the Outstanding Shares of a Corporation to Its Wholly-owned Subsidiary is Not Subject to Any Philippine Tax
BIR Ruling No. 347-87 • Bureau of Internal Revenue (BIR) Issuances • Rulings (Numbered) • Nov 5, 1987
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November 5, 1987 BIR RULING NO. 347-87 24 161-83 347-87 Gentlemen : This refers to your letter dated October 5, 1987 requesting a ruling on the tax consequence of the proposed transfer of all the outstanding shares of stock of ASEA (Philippines) Inc. (API) from ASEA AB (AAB) to ASEA Pacific Holdings (Pte) Ltd. (APH). It is represented that API is a corporation incorporated under the laws of the Philippines and is engaged in the business of importation, manufacture, sale at wholesale and repair of electrical power generation and distribution equipment; as well as mining prime mover, industrial and related equipment; that it is a wholly-owned subsidiary of AAB; that all the outstanding shares of API consisting of 148,994 common shares with a par value of P100.00 per share, are registered in the name of AAB except 5 qualifying shares which are registered in the name of 5 individual directors of API; that AAB is a corporation incorporated under the laws of Sweden while APH is a corporation incorporated under the laws of Singapore; that APH is a wholly-owned subsidiary of AAB; that AAB is presently undertaking a corporate reorganization among its subsidiaries which will have the effect of transferring the shares of API from AAB to APH, that under the proposed corporate reorganization which is intended, among others, to consolidate certain operations in the South East Asia Region into one corporate structure, AAB will transfer all its shares in subsidiaries in the South East Asia Region to APH; and that among the shares to be transferred by AAB to APH are the shares of stock of API presently registered in the name of AAB. In reply thereto, I have the honor to inform you that the transfer of all the outstanding shares of API consisting of 148,994 common shares of AAB to APH, its wholly-owned subsidiary in accordance with its proposed corporate reorganization which will consolidate certain operations in the South East Asia Region to APH is not subject to any Philippine tax. This ruling is based on the facts as presented. However, if upon investigation the same could not be substantiated, then this ruling shall be considered as null and void. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner
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