When a sale of shares is a ‘deemed gift’By RON ARRIESGADOhome/Business/Sunday Business/When a sale of shares is a ‘deemed gift’The Philippine business landscape has dramatically changed with the passage of Republic Act (RA) 10963, or the “Tax Reform for Acceleration and Inclusion” (Train) Law, with the introduction of new income tax rules affecting individual and corporate taxpayers. The stock transfer tax on the sale of shares of stock listed and traded through the local stock exchange has been increased from one-half of 1 percent to 6/10 of 1 percent of the gross selling price. The FMV for unlisted common shares is based on book value, while unlisted preferred shares are valued at par. Note that the rule on donor’s tax on the sale of shares is not absolute. Is there a way to incorporate the provisions of RR 2-2013 to prove that a sale of shares for less than its FMV is arm’s length?

Source: Manila Times March 16, 2019 17:26 UTC