An Amendment to the Current Fees for the City Cemetery Lots in the City of Meycauayan

November 5, 2008 BIR RULING [DA-(C-121) 394-08] 24 (c); DA-121-06 Tan Acut & Lopez 23rd Floor, Philippine Stock Exchange Centre East Tower, Exchange Road Ortigas Center, 1604 Pasig City Attention: Atty. Richard Anthony D. Alcazar Gentlemen : This refers to your letter dated March 13, 2007 seeking confirmation on behalf of your client Jubilee Venture Limited (Jubilee), that the transfer of the shares of stock in Philippine Global Communications, Inc. (Philcom) from a trustee to a trustor, without consideration, does not involve an actual transfer of ownership, and is therefore not subject to capital gains tax and documentary stamp tax. It is represented that Philcom is a corporation duly organized and existing under Philippine laws with office address at Philcom Building, 8775 Paseo de Roxas, Makati City; that it is principally engaged in telecommunications; that Penta Investment Limited (Penta) is a private company incorporated in the British Virgin Islands under the International Business Companies Act, with registered address at Pasea Estate, P.O. Box 3149 Road Town, Tortola, British Virgin Islands; that Jubilee is a private company incorporated in the British Virgin Island under the International Business Companies Act, with registered address at Pasea Estate, P.O. Box 3149, Road Town, Tortola, British Virgin Islands; that Jubilee is the registered holder of 119,462,016 shares of stock in Philcom with a total par value of P119,462,016, all of which were fully paid and covered by a duly issued stock certificate no. 0871; that a portion of the above shares, comprising 62,347,254 shares of stock in Philcom with total par value of P62,347,254 is being held by Jubilee as trustee for and in behalf of and in trust for Penta under a Declaration of Trust dated January 9, 1997; that in accordance with the terms of the Declaration of Trust, Jubilee purchased the subject shares in behalf and for the account of the trustor, Penta, who paid the price therefore; that under Article 1 of the Declaration of Trust, the trustee acknowledges the absolute title and ownership of the trustor over the subject shares registered in the books of Philcom under the trustee's name; that the trustee also acknowledges its role as nominee and agent of the trustor to hold the shares in behalf of and in trust for the trustor; that upon instruction from Penta and in accordance with Article 2 of the Declaration of Trust, Jubilee caused the subject shares to be transferred without consideration to Penta on March 15, 2001; and that accordingly, Jubilee duly executed a "Deed of Assignment of Shares-in-Trust" in favor of Penta, transferring 62,347,254 of the 119,462,016 shares of stock in Philcom. In reply, please be informed that since the transfer of the shares is without monetary consideration, the same is not subject to the capital gains tax imposed under Section 28 (B) (5) (c) of the Tax Code of 1997. (BIR Ruling No. DA-080-2002 dated April 29, 2002) In BIR Ruling No. DA-080-2002 dated April 29, 2002, this Office has ruled that the transfer of shares from the trustee to trustor without monetary consideration and by virtue of a Deed of Trust executed between them is not subject to capital gains tax. Likewise, the conveyance of the shares from the trustee to the trustor without consideration is not taxable under Section 185 of the Revised Documentary Stamp Tax Regulations. Thus, the Deed of Conveyance of Shares of Stock executed by Jubilee to Penta and was made without monetary consideration is not subject to the documentary stamp tax imposed under Section 175 of the 1997 Tax Code, as amended by R.A. 9243. However, the notarial acknowledgement to the said deed is subject to the documentary stamp tax of P15.00 pursuant to Section 188 of the Tax Code of 1997. The transfer of the above-mentioned shares is exempt from the donor's tax imposed under Section 98 of the same Code due to lack of donative intent on the part of the trustee. 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. Very truly yours, Commissioner of Internal Revenue By: (SGD.) GREGORIO V. CABANTAC Deputy Commissioner