Altarejos, Altarejos & Co.

December 14, 1998 Altarejos, Altarejos & Co. Door No. 3, Second Floor, Victoria Arcade Rizal Street, Bacolod City Attention: Mr . Arturo G . Altarejos, Jr . Gentlemen: This refers to your letter dated November 6, 1998 seeking opinion on whether the exemptions from taxes and fees of land transfers and other benefits, as provided for in RA No. 6657, otherwise known as the (Comprehensive Agrarian Reform Law (CARL), quoted hereunder, include registration/filing fees required by the Securities and Exchange Commission of the transaction described therein. prcd "SECTION 8. Multinational Corporations . . . . In general, lands shall be distributed directly to the individual worker beneficiaries . In case it is not economically feasible and sound to divide the land, then they shall form a workers' cooperative or association which will deal with the corporation or business association or any other proper party for the purpose of entering into a lease or growers agreement and for all other legitimate purposes." (Emphasis supplied) "SECTION 25. Award Ceiling for Beneficiaries . . . . The beneficiaries may opt for collective ownership , such as co-ownership or farmers cooperative or some other form of collective organization; Provided, That the total area that may be awarded shall not exceed the total number of co-owners or members of the cooperative or collective organization multiplied by the award limit above prescribed, except in meritorious cases as determined by the PARC. Title to the property shall be issued in the name of the co-owners or the cooperative or collective organization as the case may be." (Emphasis supplied) "SECTION 66. Exemptions from Taxes and Fees of Land Transfers . Transactions under this Act involving a transfer of ownership, whether from natural or juridical persons, shall be exempted from taxes arising from capital gains. These transactions shall also be exempted from payment of registration fees, and all other taxes and fees for the conveyance or transfer thereof : Provided, That all arrearages in real property taxes, without penalty or interest, shall be deductible from the compensation to which the owner may be entitled." (Emphasis supplied) It is construed from the underlined phrases in the above-cited provisions that the exemption granted refers only to transactions involving transfer of ownership/title of the property subject of the CARL in favor of the beneficiaries (individual or collective).Thus, any transfer thereafter to a third party, such as subsequent transfer of the property by the beneficiary as payment to subscriptions to capital stock in a corporation is not covered by the intended exemptions. Please take note that the SEC does not impose registration fees for transfer of property by a stockholder in exchange for issuance of shares of stock. What the SEC collects is filing fee for the registration of the new corporation or filing fee for the application of the increase of authorized capital stock, regardless of the form of payment therefor. Very truly yours, (SGD.) DANILO L. CONCEPCION Associate Commissioner