BIR Ruling [UN-072-94]

February 22, 1994 BIR RULING [UN-072-94] Romulo, Mabanta, Buenaventura, Sayoc & De Los Santos Fourth Floor, King's Court 2129 Pasong Tamo, Makati Metro Manila Attention: Atty . Wilma M . Valdemoro-Cua and Atty . Catherine T . Manahan Gentlemen : This refers to your letter dated December 9, 1993 requesting exemption from the payment of capital gains tax as well as documentary stamp tax on the conveyance of the Maxon Packaging Components, Inc. (Maxon), a domestic corporation duly organized and existing under the laws of the Philippines, shares held in trust by the trustee to the cestui que trust or beneficial owner. As represented, your client, Sungshin Plastic Company, is a foreign corporation organized under the laws of Korea which holds shares of stock of Maxon in trust for Mr. Gun Tae Her, a Korean national, under a duly executed Declaration of Trust. Now, the trustee intends to transfer the shares to the cestui que trust or beneficial owner. 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 transaction; hence, the transfer from the trustee to the cestui que trust or beneficial owner of the Maxon 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). Very truly yours, JAIME M. MAZA Assistant Commissioner (Legal Service)