BIR Ruling [UN-069-94]

February 22, 1994 BIR RULING [UN-069-94] Romulo, Mabanta, Buenaventura, Sayoc & De Los Angeles Fourth Floor, King's Court 2129 Pasong Tamo, Makati Metro Manila Attention: Atty . Carlos G . Baniqued and Atty . Catherine T . Manahan Gentlemen : This refers to your letter dated October 14, 1993 requesting exemption from the payment of capital gains tax as well as documentary stamp tax on the conveyance of the Digital Telecommunication Philippines, Inc. (Digital) shares held in trust by the trustee to the cestui que trust or beneficial owners. cdi As represented, your client, Ricardo J. Romulo, holds, 500,000 Digital shares in trust for Peter Paul Philippine Corporation, MTH Development Corporation, Matsons Realty Development Corporation and JTQ Securities Corporation under a duly executed Declaration of Trust. These beneficial owners are domestic corporation duly organized and existing under the laws of the Philippines. Furthermore, the additional 2,500 shares which your client additionally subscribed under the pre-emptive offering of Digital are also being held in trust for the beneficial owners in proportion to their ownership of the 500,000 initial shares. Now, the trustee intends to transfer the shares to the beneficial owners. In reply, please be informed that since the transfer is without consideration and the same does not involve actual transfer of ownership, the same is not a taxable consideration; hence, the transfer from the trustee to the cestui que trust or beneficial owners of the Digital shares is not subject to capital gains tax. Moreover, the deed conveying the said shares is not subject to documentary stamp tax pursuant to Sec. 191 of Regulations No. 26 (Documentary Stamp Tax Regulations.). This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void (BIR Ruling No. 129-93 dated April 5, 1993). cdtech Very truly yours, JAIME M. MAZA Assistant Commissioner (Legal Service)