|
DIFFERENT MODES OF
ENTRY OF FOREIGN CORPORATIONS (PHILIPPINES)
A foreign corporation ("Company") may establish its economic
presence in the Philippines by one of several methods. Each form
has its own requirements, characteristics and features that may
either be viewed as an advantage or disadvantage, depending on
the Company's business goals and growth plan.
A)
REPRESENTATIVE OFFICE
B)
REGIONAL
HEADQUARTERS
What is a RHQ and what are the activities
it can engage in?
C)
REGIONAL OPERATING AREA HEADQUARTERS
What is a ROHQ and what are the
activities it can engage in?
What are the funding requirements for a
RHQ and a ROHQ?
What are the taxes applicable and
incentives available to a RHQ/ROHQ?
D)
DOMESTIC
SUBSIDIARY
E)
BRANCH
What is the tax on branch profit
remittances
_____________________________________________________________
REPRESENTATIVE OFFICE
A representative office promotes the products and/or
services of the Company it represents, but cannot conclude
contracts with local entities on behalf of its parent Company.
Such contracts must be directly entered into between the Company
head office and the local entity. Its activities are limited to
the promotion and dissemination of information about the
Company's products and/or services.
By the nature of the activities allowed of a representative
office, it cannot derive income from the Philippines. The test
of whether an office is a representative office or not, is
whether it derives income from its operations.
Some of the acceptable
activities of a representative office are the following:
a. dissemination of foreign market information;
b. promotion for export of Philippine products specially
nontraditional products;
c. acting as a message centre or a communication centre
between interested parties and the head office;
d. promotion of products presently being distributed in
the Philippines;
e. to render, assist and give technical know-how and
training to existing and future customers of
the Company's products;
f. to provide and facilitate better communication and
contact between its head office and affiliated companies on one
hand and present and future customers on the other;
g. to inform potential customers of price quotations of
the head office and affiliated companies;
h. to conduct and make surveys and studies of the
market, economic and financial conditions in the Philippines;
and
i. attend to the needs of end-users of its products in
the Philippines advising them on the proper care and maintenance
of their equipment and to communicate to its head office
problems that call for consultations.
Capital
Requirement
The amount initially to be remitted is at least Thirty
Thousand US Dollars (US$30,000.00).
Thereafter, an inward remittance of such amount as may be
necessary for operating expenses.
Taxes
A representative office has no income from operations and,
there has no income tax liability.
Expenses
No allocation can be made to the representative office since
the representative office obtains no income from the Philippines
with which to offset the expenses with.
Deposit Of
Securities
No deposit of securities with any entity is required.
*Establishment and Registration Costs
a. The filing fee equivalent to l/10 of 1% of the funds
actually remitted to the Philippines;
b. Legal research fee of 1% of the filing fee; and
c. Minimal amount of fees for post incorporation government
permits such as the mayor's permit, tax identification number,
Bureau of Internal Revenue ("BIR") registration, and
registration of books of account and Certificate of Registration
with the Bureau of Domestic Trade.
____________________________________________________
BRANCH
A foreign corporation may set up a branch in the Philippines
by obtaining a license to transact business. A branch, like a
representative office, is an extension of the foreign
corporation (i.e., incorporated and existing under foreign
laws), but may engage in exactly the same activities as its
parent company. However, existing nationality requirements with
respect to certain industries must be observed.
Since a branch office
is a mere extension of its parent corporation, the branch does
not have a personality separate and distinct from its parent
company. A branch office may, therefore, conclude sales
contracts with local entities in its own name, and in general,
engage in income producing activities in the same manner as its
parent company. Further, the parent corporation may be held
responsible for any liability of the branch in excess of its
investment.
Capital
Requirement
The required minimum assigned capital is Two Hundred
Thousand US Dollars (US$200,000.00). (Republic Act No. 8179).
This amount of required minimum assigned capital may be reduced
to One Hundred Thousand US Dollars (US$100,000.00) if advanced
technology as determined by the Philippine Department of Science
and Technology is involved or the business directly employs at
least fifty (50) employees.
Taxes
A branch is taxed only on net income derived from Philippine
sources at a rate of 35%. In lieu of the above-mentioned normal
corporate income tax rate, beginning the fourth (4th) year
immediately following the year of the commencement of its
operations, a branch or a domestic corporation will be subject
to the minimum corporate income tax (MCIT) of two percent (2%)
of gross income if such MCIT is higher than the corporation's
taxable income computed using the 35% rate. The term gross
income is defined as (i) gross sales less sales returns,
discounts and allowances and cost of goods sold, or (ii) gross
receipts less sales returns, allowances, discounts and cost of
services. Any excess MCIT over the normal corporate income tax
may be carried forward for the three (3) immediately succeeding
taxable years and credited against the normal corporate income
tax. The Secretary of Finance may suspend the imposition of the
MCIT on any corporation which suffers losses on account of
prolonged labor dispute, because of force majeure, or because of
legitimate business reverses.
The remittance of profits made by a branch to its head office is
subject to a tax of 15%. However, if the branch
receives income in the form of dividends, interest or rentals,
among others, which are not effectively connected with the
conduct of its trade or business in the Philippines, such income
when remitted to the head office abroad shall not be considered
as branch profits and no branch profits tax is further required
to be paid.
Expenses
For purposes of taxation of the income of the branch office
the parent foreign corporation can allocate to its branch a
proportional part of its expenses, losses, interest payments and
similar expenses relating to the conduct of business in the
Philippines.
Liabilities
A foreign corporation which does business through a branch
is liable for all damages and/or other liabilities which may be
incurred by its branch. Theoretically, the assets of the home
office may be made to answer for the liabilities incurred by the
branch.
Deposit of
Securities
A branch is required by law to deposit government securities
with actual market value of One Hundred Thousand Pesos (P
100,000) with the Securities and Exchange Commission ("SEC")
within sixty (60) days from issuance of the SEC license, and
thereafter, additional securities worth 2% of the amount by
which the gross income of the branch exceeds Five Million Pesos
(P5,000,000).
*Establishment and Registration
Costs
a. The filing fee equivalent to 1% of the assigned capital
of the branch.
b. Legal research fee of 1% of the filing fee; and
c. Minimal amount of fees for post incorporation
government permits such as the mayor's permit, tax
identification number, Value Added Tax and Withholding Tax
Agent's Registration if applicable, BIR registration of books of
account and Certificate of Registration with the Bureau of
Domestic Trade.
____________________________________________________
DOMESTIC SUBSIDIARY
A subsidiary is a corporation which, while incorporated and
existing under Philippines laws, is either wholly-owned or at
least majority owned by a foreign "parent" corporation. It is
therefore a domestic (Philippine) corporation but is considered
foreign in that it is owned by a foreign corporation. The
advantage of a subsidiary over a branch office is that a
subsidiary has a separate and distinct juridical personality
from its parent corporation, so that the liability of the parent
corporation to creditors of the subsidiary is limited to its
shareholdings in the domestic subsidiary. The parent foreign
corporation is thus fully protected from the liabilities of the
subsidiary in excess of its shareholdings in such subsidiary.
Nationality requirements with respect to certain industries must
be observed.
Capital
Requirement
The required minimum paid-up capital is Two Hundred Thousand
US Dollars (US$200,000.00). (Republic Act No. 8179). This amount
of required minimum paid-up capital may be reduced to One
Hundred Thousand US Dollars (US$100,000.00) if advanced
technology as determined by the Philippine Department of Science
and Technology is involved or the business directly employs at
least fifty (50) employees. The minimum paid up capital of
US$200,000.00 does not apply to enterprises that export sixty
percent (60%) or more of its output or domestic purchases.
Taxes
A subsidiary is also liable for tax at the same rate of 35%
on its entire net income, both from sources within and without
the Philippines, or the MCIT, whichever is higher (see
discussion on "Branch"). The remittance of dividends by a
subsidiary to its foreign "parent" corporation is, generally,
taxed at 35%. This, however, may be reduced to 15% where the
country in which the foreign "parent" corporation either: (a)
grants a tax sparing credit or (b) does not at all impose any
tax on such dividends received.
Likewise, the 'educed rate of 15% is applied when the laws
of the country of domicile of the foreign "parent" corporation
does not tax at all any dividends received (Commissioner of
Internal Revenue v. Wander Philippines, Inc., 160 SCRA 573).
Some of these countries include Hong Kong, Bermude and the
Cayman Islands (BIR Rulings Nos. 126-83, dated 8 July 1983;
45-85, dated 22 March 1985; 17985, dated 9 October 1985, 208-89
dated September 28, 1989; and 111-88 dated March 11, 1988).
Expenses
The parent company of a subsidiary cannot pass on to its
subsidiary any portion of such expenses since the subsidiary is
a separate and distinct entity.
Liabilities
The subsidiary's liabilities are separate and do not become
the liabilities of its foreign "parent" corporation because of
its separate juridical personality. Recovery for damages and/or
liabilities is limited to the capital and assets of the
subsidiary in the Philippines. The foreign corporation is thus
completely shielded from the liabilities of its subsidiary.
Deposit of
Securities
No deposit of securities with any entity is required.
*Establishment and Registration
Costs
a. Filing fee is 1/5 of 1% of the
authorized capital stock or the subscription price of the
subscribed capital stock whichever is higher but not less than
P1,000.00
b. Legal research fee of 1% of the filing fee;
c. By-Laws fee of
P510.00; Stock transfer book P470.00
d. Documentary stamp tax for the issuance of shares
equivalent to P2.00 for every P200.00 par value of shares
issued; and
e. Minimal amount of fees for post incorporation
government permits such as the mayor's permit, tax
identification number, Value Added Tax and Withholding Tax
Agent's Registration if applicable, BIR registration of books of
account and Certificate of Registration with the Bureau of
Domestic Trade.
____________________________________________________
REGIONAL HEADQUARTERS
A Regional Headquarters of a multinational company is an
administrative branch which principally acts as a supervision,
communications and coordination centre for the subsidiaries,
branches or affiliates of a multinational company in the
Asia-Pacific Region. It is not allowed to do business or earn
income from the host country, unlike a branch or subsidiary.
Neither does it deal directly with the clients of the parent
company, unlike a representative office, when it undertakes such
activities as information dissemination and promotion of the
company's products for export.
Capital
Requirement
The amount of not less than Fifty Thousand US Dollars
(US$50,000) or its equivalent in acceptable foreign currency
must be remitted annually. However, the amount required to be
initially remitted is at least Thirty Thousand US Dollars
(US$30,000.00).
Taxes
It will not be subject to income tax provided it will not
earn or derive income from the Philippines and merely act as a
supervisory, coordination and communication centre for its
affiliates, subsidiaries or branches in the Asia-Pacific Region
and other foreign markets. They are also exempted from the
value-added tax local licenses, fees and dues, duties on
importation of training materials
Expenses
All its expenses are financed by the head office or parent
company. The foreign firm should remit into the Philippines the
entire amount necessary to cover the operations of its Regional
Headquarters in the Philippines but not less than $50,000.00
annually or its equivalent in acceptable foreign currencies. The
foreign executives of the regional headquarters should each
receive salaries and compensation in the Philippines equal to at
least $ 1,000.00 a month.
Liabilities
Its liabilities, like its expenses, are to be shouldered by
the Parent Company.
Deposit of Securities
No deposit of securities with any entity is required.
*Establishment and Registration
Costs
a. filing fee for an application with SEC though the One
Stop Action Centre of the BOI - P5,000.00;
b. fee payable after issuance by the SEC of the
certificate of registration -P2,020.00; and
c. BOI requirement of inward remittance of at least
US$50,000-00 a year for operating expense.
d.
BOI Filing fee of P4,500.00
____________________________________________________
REGIONAL OPERATING
HEADQUARTERS
A regional operating headquarter of a multinational company
is a branch office established in the Philippines engaged in any
one of the following services: general administration and
planning; business planning and coordination; sourcing and
procurement of raw materials and components; corporate finance
advisory services; marketing control and sales promotion;
training and personnel management; logistic services; research
and development services and product development; technical
support and maintenance; data processing and communication; and
business development.
The concept of a regional operating headquarter was recently
introduced by the Tax Reform Act of 1997 and the government
agencies concerned are currently formulating rules and
guidelines on the establishment and operation of such entities.
Under the Tax Reform Act of 1997, regional operating
headquarters shall pay a tax of ten percent (10%) of their
taxable income.
*Establishment and Registration
Costs
a. The filing fee equivalent to
1% of actual inward remittances
b. Legal research fee of 1% of the filing fee; and
____________________________________________________
What is a RHQ and what are the activities it can
engage in?
Republic Act (R.A.) No. 8756 (amending the
Omnibus Investments Code of 1987, and approved on November
1999), defines RHQ as an office whose purpose is to act as an
administrative branch of a multinational company engaged in
international trade which principally serves as a supervision,
communications and coordination center for its subsidiaries,
branches or affiliates in the Asia-Pacific Region and other
foreign markets and which does not earn or derive income in the
Philippines.
The activities of the RHQ are limited to acting
as a supervisory, communications and coordinating center for its
subsidiaries, affiliates and branches in the region.
It is neither allowed to derive any income from
sources within the Philippines and to participate in any manner
in the management of any subsidiary or branch office it might
have in the Philippines nor to solicit or market goods and
services whether on behalf of its mother company or its
branches, affiliates, subsidiaries or any other company.
_____________________________________________________
What is a
ROHQ and what are the activities it can engage in?
ROHQ is a foreign business entity which is
allowed to derive income in the Philippines by performing
qualifying services to its affiliates, subsidiaries or branches
in the Philippines, in the Asia-Pacific Region and in other
foreign markets as follows:
o
General administration and planning;
o
Business planning and coordination;
o
Sourcing/procurement of raw materials and
components;
o
Corporate finance advisory services;
o
Marketing control and sales promotion;
o
Training and personnel management;
o
Logistics services;
o
Research and development services and product
development;
o
Technical support and maintenance; and
o
Data processing and communication
A ROHQ is prohibited from offering qualifying
services to entities other than its affiliates, branches or
subsidiaries as declared in its registration with the Securities
and Exchange Commission (SEC). Neither is it allowed to directly
and indirectly solicit or market goods and services whether on
behalf of their mother company, branches, affiliates,
subsidiaries or any other company.
______________________________________________
What are the funding requirements for a RHQ and a ROHQ?
The
initial funding requirement for a RHQ of a multinational
corporation is US$50,000. Within 30 days from receipt of the SEC
certificate of registration, the multinational corporation must
submit a certificate of inward remittance from a local bank
showing that it had remitted US$50,000. It must also annually
remit at least US$50,000 or its equivalent in other foreign
currency within 30 days from anniversary date of its
registration to cover its operations in the Philippines.
A ROHQ is required to initially remit the amount
of US$200,000 or its equivalent in other foreign currencies.
Within 30 days from receipt of its certificate of registration,
the multinational corporation must submit to the SEC a
certificate of inward remittance from a local bank showing that
it had remitted US$200,000.
____________________________________________________
What are
the taxes applicable and incentives available to a RHQ/ROHQ?
RHQs are exempt from
income tax and VAT while their purchases of goods and services
and lease of goods and property are zero rated. On the other
hand, ROHQs are subject to 10% preferential rate on taxable
income and are subject to 10% VAT.
RHQs and ROHQs are granted the following
incentives:
1.
Exemption from all kinds of local taxes, fees and
charges except for real property tax on land improvements and
equipment;
2.
Tax and duty free importation of training
materials and equipment; and
3.
Importation of motor vehicles subject to the
payment of corresponding taxes and duties.
Expatriates of RHQs and ROHQs are entitled to the
following incentives:
1.
Multiple entry special visa, including those of
spouses and unmarried children below age 21;
2.
Withholding tax of 15% on salaries, wages,
annuities, and other emoluments of expatriates;
3.
Travel tax exemption; and
4.
Tax and duty free importation of personal and
household effects.
Filipinos occupying managerial and technical
positions in RHQ and ROHQ of multinational companies shall be
taxed at 15% of their gross income. This rate will be applicable
even in the absence of an alien executive in the organization.
Filipino executives of RHQs and ROHQs governed by Book III of
Executive Order No. 226 may opt to be taxed either at 15% of
gross income or at the regular tax rates of 15% to 32% of their
taxable income.
_________________________________________________________________________________________________________
*Establishment and Registration
Costs are subject to change based on the prevailing rates
_________________________________________________________________________________________________________
SEC. 28 of the Philippine Tax Code. Rates of Income Tax on
Foreign Corporations. -
(A) Tax on Resident Foreign Corporations. -
(1) In General. - Except as otherwise provided in this Code, a
corporation organized, authorized, or existing under the laws of
any foreign country, engaged in trade or business within the
Philippines, shall be subject to an income tax equivalent to
thirty-five percent (35%) of the taxable income derived in the
preceding taxable year from all sources within the Philippines:
provided, That effective January 1, 1998, the rate of income tax
shall be thirty-four percent (34%); effective January 1, 1999,
the rate shall be thirty-three percent (33%), and effective
January 1, 2000 and thereafter, the rate shall be thirty-two
percent (32%).
In the case of corporations adopting the fiscal-year accounting
period, the taxable income shall be computed without regard to
the specific date when sales, purchases and other transactions
occur. Their income and expenses for the fiscal year shall be
deemed to have been earned and spent equally for each month of
the period.
The reduced corporate income tax rates shall be applied on the
amount computed by multiplying the number of months covered by
the new rates within the fiscal year by the taxable income of
the corporation for the period, divided by twelve.
Provided, however, That a resident foreign corporation shall be
granted the option to be taxed at fifteen percent (15%) on gross
income under the same conditions, as provided in Section 27 (A).
(2) Minimum Corporate Income Tax on Resident Foreign
Corporations. - A minimum corporate income tax of two percent
(2%) of gross income, as prescribed under Section 27 (E) of this
Code, shall be imposed, under the same conditions, on a resident
foreign corporation taxable under paragraph (1) of this
Subsection.
(3) International Carrier. - An international carrier doing
business in the Philippines shall pay a tax of two and one-half
percent (2 1/2%) on its 'Gross Philippine Billings' as defined
hereunder:
(a) International Air Carrier. - 'Gross Philippine Billings'
refers to the amount of gross revenue derived from carriage of
persons, excess baggage, cargo and mail originating from the
Philippines in a continuous and uninterrupted flight,
irrespective of the place of sale or issue and the place of
payment of the ticket or passage document: Provided, That
tickets revalidated, exchanged and/or indorsed to another
international airline form part of the Gross Philippine Billings
if the passenger boards a plane in a port or point in the
Philippines: Provided, further, That for a flight which
originates from the Philippines, but transshipment of passenger
takes place at any port outside the Philippines on another
airline, only the aliquot portion of the cost of the ticket
corresponding to the leg flown from the Philippines to the point
of transshipment shall form part of Gross Philippine Billings.
(b) International Shipping. - 'Gross Philippine Billings' means
gross revenue whether for passenger, cargo or mail originating
from the Philippines up to final destination, regardless of the
place of sale or payments of the passage or freight documents.
(4) Offshore Banking Units. - The provisions of any law to the
contrary notwithstanding, income derived by offshore banking
units authorized by the Bangko Sentral ng Pilipinas (BSP) to
transact business with offshore banking units, including any
interest income derived from foreign currency loans granted to
residents, shall be subject to a final income tax at the rate of
ten percent (10%) of such income.
Any income of nonresidents, whether individuals or corporations,
from transactions with said offshore banking units shall be
exempt from income tax.
(5) Tax on
Branch Profits Remittances. -
Any profit remitted by a branch to its head office shall be
subject to a tax of fifteen (15%) which shall be based on the
total profits applied or earmarked for remittance without any
deduction for the tax component thereof (except those activities
which are registered with the Philippine Economic Zone
Authority). The tax shall be collected and paid in the same
manner as provided in Sections 57 and 58 of this Code: provided,
that interests, dividends, rents, royalties, including
remuneration for technical services, salaries, wages premiums,
annuities, emoluments or other fixed or determinable annual,
periodic or casual gains, profits, income and capital gains
received by a foreign corporation during each taxable year from
all sources within the Philippines shall not be treated as
branch profits unless the same are effectively connected with
the conduct of its trade or business in the Philippines.
(6) Regional or Area Headquarters and Regional Operating
Headquarters of Multinational Companies. -
(a) Regional or area headquarters as defined in Section 22(DD)
shall not be subject to income tax.
(b) Regional operating headquarters as defined in Section 22(EE)
shall pay a tax of ten percent (10%) of their taxable income.
(7) Tax on Certain Incomes Received by a Resident Foreign
Corporation. -
(a) Interest from Deposits and Yield or any other Monetary
Benefit from Deposit Substitutes, Trust Funds and Similar
Arrangements and Royalties. - Interest from any currency bank
deposit and yield or any other monetary benefit from deposit
substitutes and from trust funds and similar arrangements and
royalties derived from sources within the Philippines shall be
subject to a final income tax at the rate of twenty percent
(20%) of such interest: Provided, however, That interest income
derived by a resident foreign corporation from a depository bank
under the expanded foreign currency deposit system shall be
subject to a final income tax at the rate of seven and one-half
percent (7 1/2%) of such interest income.
(b) Income Derived under the Expanded Foreign Currency Deposit
System. - Income derived by a depository bank under the expanded
foreign currency deposit system from foreign currency
transactions with local commercial banks including branches of
foreign banks that may be authorized by the Bangko Sentral ng
Pilipinas (BSP) to transact business with foreign currency
deposit system units, including interest income from foreign
currency loans granted by such depository banks under said
expanded foreign currency deposit system to residents, shall be
subject to a final income tax at the rate of ten percent (10%)
of such income.
Any income of nonresidents, whether individuals or corporations,
from transactions with depository banks under the expanded
system shall be exempt from income tax.
(c) Capital Gains from Sale of Shares of Stock Not Traded in the
Stock Exchange. - A final tax at the rates prescribed below is
hereby imposed upon the net capital gains realized during the
taxable year from the sale, barter, exchange or other
disposition of shares of stock in a domestic corporation except
shares sold or disposed of through the stock exchange:
Not over P100,000………………………… 5%
On any amount in excess of P100,000……. 10%
(d) Intercorporate Dividends. - Dividends received by a resident
foreign corporation from a domestic corporation liable to tax
under this Code shall not be subject to tax under this Title.
(B) Tax on Nonresident Foreign Corporation. -
(1) In General. - Except as otherwise provided in this Code, a
foreign corporation not engaged in trade or business in the
Philippines shall pay a tax equal to thirty-five percent (35%)
of the gross income received during each taxable year from all
sources within the Philippines, such as interests, dividends,
rents, royalties, salaries, premiums (except reinsurance
premiums), annuities, emoluments or other fixed or determinable
annual, periodic or casual gains, profits and income, and
capital gains, except capital gains subject to tax under
subparagraphs (C) and (d): Provided, That effective 1, 1998, the
rate of income tax shall be thirty-four percent (34%); effective
January 1, 1999, the rate shall be thirty-three percent (33%);
and, effective January 1, 2000 and thereafter, the rate shall be
thirty-two percent (32%).
(2) Nonresident Cinematographic Film Owner, Lessor or
Distributor. - A cinematographic film owner, lessor, or
distributor shall pay a tax of twenty-five percent (25%) of its
gross income from all sources within the Philippines.
(3) Nonresident Owner or Lessor of Vessels Chartered by
Philippine Nationals. - A nonresident owner or lessor of vessels
shall be subject to a tax of four and one-half percent (4 1/2%)
of gross rentals, lease or charter fees from leases or charters
to Filipino citizens or corporations, as approved by the
Maritime Industry Authority.
(4) Nonresident Owner or Lessor of Aircraft, Machineries and
Other Equipment. - Rentals, charters and other fees derived by a
nonresident lessor of aircraft, machineries and other equipment
shall be subject to a tax of seven and one-half percent (7 1/2%)
of gross rentals or fees.
(5) Tax on Certain Incomes Received by a Nonresident Foreign
Corporation. -
(a) Interest on Foreign Loans. - A final withholding tax at the
rate of twenty percent (20%) is hereby imposed on the amount of
interest on foreign loans contracted on or after August 1, 1986;
(b) Intercorporate Dividends. - A final withholding tax at the
rate of fifteen percent (15%) is hereby imposed on the amount of
cash and/or property dividends received from a domestic
corporation, which shall be collected and paid as provided in
Section 57 (A) of this Code, subject to the condition that the
country in which the nonresident foreign corporation is
domiciled, shall allow a credit against the tax due from the
nonresident foreign corporation taxes deemed to have been paid
in the Philippines equivalent to twenty percent (20%) for 1997,
nineteen percent (19%) for 1998, eighteen percent (18%) for
1999, and seventeen percent (17%) thereafter, which represents
the difference between the regular income tax of thirty-five
percent (35%) in 1997, thirty-four percent (34%) in 1998, and
thirty-three percent (33%) in 1999, and thirty-two percent (32%)
thereafter on corporations and the fifteen percent (15%) tax on
dividends as provided in this subparagraph;
(c) Capital Gains from Sale of Shares of Stock not Traded in the
Stock Exchange. - A final tax at the rates prescribed below is
hereby imposed upon the net capital gains realized during the
taxable year from the sale, barter, exchange or other
disposition of shares of stock in a domestic corporation, except
shares sold, or disposed of through the stock exchange:
Not over P100,000…………..………………… 5%
On any amount in excess of P100,000………… 10%
__________________________________________________
|
