December 21, 1972

Sycip, Gorres, Velayo & Co.

6760 Ayala Avenue, Makati
Rizal

Gentlemen :

This refers to your letter dated December 16, 1972 requesting for a ruling to
the effect that the subsequent transfer of "street certificates" placed in the name of a
stockbroker, as nominee, to the name of the beneficial or actual owner thereof, is not
subject to the stock transfer tax prescribed under R. A. 6141. cdtai

Under your letter, you stated that upon the purchase of shares of stock by a
broker acting as nominee for the beneficial or actual owner of the shares, the shares
are placed in the broker's name as "street certificates". The stock transfer tax is paid
on this purchase or transaction. Subsequently, the shares or "street certificates" are
transferred in the name of the actual or beneficial owner. You now request
confirmation that this subsequent transfer is no longer subject to the stock transfer tax.

In reply, I have the honor to inform you that the stock transfer tax under
Section 195-B of the Tax Code as inserted by R.A. 6141 is imposed on every sale,
exchange, transfer or similar transaction intended to convey ownership of or title to
any shares of stock. The subsequent transfer of "street certificates" from the name of
the nominee-stockbroker to their actual or beneficial owner will not result in the
transfer of ownership of or title to the shares and is not, therefor, subject to the stock
transaction tax because this transfer cannot be said as conveying ownership or title to
the shares as contemplated by R.A. 6141. The stockbroker, under the circumstances,
merely holds the shares in a representative capacity or as an agent of the actual or
beneficial owner in whose name the shares are transferred. aisadc

Very truly yours,

MISAEL P. VERA
Commissioner of Internal Revenue

Copyright 2021 CD Technologies Asia, Inc. and Accesslaw, Inc. Philippine Taxation Encyclopedia Second Release 2021 1
Copyright 2021 CD Technologies Asia, Inc. and Accesslaw, Inc. Philippine Taxation Encyclopedia Second Release 2021 2