DOCUMENTARY STAMP TAX; gain or loss in partial or complete liquidation of a corporation The transfer by the liquidating corporation of its

remaining assets to its stockholders is not considered a sale of these assets. Thus, a liquidating corporation does not realize gain or loss in partial or complete liquidation. Conversely, neither is a liquidating corporation subject to tax on its receipt of the shares surrendered by its shareholders pursuant to a complete or partial liquidation. No Documentary Stamp Tax (DST) is due on the surrender and cancellation of shares since the surrender does not constitute a sale, assignment or transfer because the liquidating corporation is not taking title to the surrendered shares and the shares are retired and not retained as treasury shares. A distribution in liquidation, without consideration, of the assets of a corporation consisting of real estate is not subject to DST under Section 196 of the Tax Code of 1997. A corporation that distributes its assets to its shareholders as liquidating dividends is not deemed to be selling such assets to the latter. However, the notarial certification on the deeds of assignment is subject to DST of P15.00 under Section 188 of the Tax Code of 1997. (BIR Ruling No. 039-2002 dated November 11, 2002)