Thursday 3 October 2013

FAMILY CORPORATIONS, UNDER INTRIGUING BIR SCRUTINY - RR 6-2013


FAMILY CORPORATIONS, UNDER BIR SCRUTINY
Emelino T Maestro, 10-3-2013
How to help your own corporations to avoid the scrutiny?

UnFair and UnAcceptable, RR 6-2013 is.
RR 6-2013 says that any disposition of shares of stock of a closed/family corporations shall either be based on the adjusted value of land and its improvements or fair value of the shares of stocks whichever is higher.

The term "disposition' means the sale, exchange, barter, donation and inheritance of shares of stocks of a family/closed corporation.

The term "land and its improvements' refers to the land and anything found thereon as they are shown in the latest Balance Sheet of the family/closed corporation.

Again, the 100-year old rule had been knowingly twisted and then changed without a valid consultation with the taxpaying public.

Comical as it is, the disposition of shares of stocks of corporations registered at the Philippine Stock Exchange is exempted or treated differently. Meaning, the sale, exchange, barter, donation and inheritance of the said shares of stocks shall be based on their fair market value or book value.

The term 'fair market value' means the amount of the said shares of stocks that is shown on the bulletin board of the Philippine Stock Exchange.

The term 'book value' means the amount of the outstanding capital stock of the concerned corporations plus their accumulated retained earnings divided by the outstanding number of shares.

The difference between the two types of disposition of shares of stocks is only the place where the shares of stocks is being sold... For family/closed corporations, their shares of stocks are being disposed of outside the jurisdiction of the Philippine Stock Exchange but for those public corporations' shares of stocks, they are being disposed of using the facilities of the Philippine Stock Exchange.

The BIR is giving a preferential treatment or in other words, exempting the public corporations from paying more taxes while it is imposing more taxes to family/closed corporations.

For your information, the holders and owners of prime lots and improvements thereon are not family/closed corporations but most of them are public corporations.

Treating the disposition of shares of stock differently is amending, revoking, repealing the existing laws of the State.

ETM suggests that this patently erroneous RR 6-2013 shall be brought to the attention of the Regional Trial Court so that it could be scrapped.

For your tax problems, please 
call 921 6107 and 439 3918
text 0998 979 3922 / 0922 801 0922
**ETM’S PERSONAL CONVICTION/BELIEF
***PRIVILEGED COMMUNICATION

No comments:

Post a Comment