BIR Ruling No. 346-2022

BUREAU OF INTERNAL REVENUE REPCBLICOFTHE PHILIPPINES DEPARTMENT OF FINANCE Quezon City

Secs. 24(D)(1), 98, 105, & 196. BIR Ruling No. 546-19 Tax Code, as amended Ot346-2022 JUN 3 0 2022

Makati City 1226 BDO Towers Valero 8741 Paseo de Roxas REYES TACANDONCO

Attention: Atty. Sheryl Ann D. Tizon-Lalucis Tax Services

Gentlemen:

tax VAT,donor's taxnc documentary stamp tax (DST). Chua, is exempt from ap tal gains tax (CGT,creditable withholding tax (CWT).value-added result of the terminatioef a trust agreement. by BDO Private Bank,Inc.BDOPB) to Sps. and MAUREEN Y.C I ASps.Chua for a ruling that the conveyance of properties,as a This refers to yc ar request on behalf of your clients, SPOUSES MERRICK G. CHUA

Background

2.BDOPB is a lomestic stock corporation duly organized and existing under the laws of 1.Sps. Chua arb oth Filipinos, of legal age, and with cffice address at Exchange C m nission (SEC) with Company Registration No. primary purp oS: of BDOPB is as follows: the Republic of he Philippines with registered addre:ss at BDO Equitable Tower. 8751 Paseo de Rc a Makati City, Philippines. It is registered with the Securities and Numbers (TI N) and with Taxpayer Identification , respectively. The

and xrcise all powers, rights, privileges and attributes of a comr e cial bank and a trust company. in addition to the general powe's ncident to corporations." enga e in and carry on the business of a trust company, and to have Toopate under a commercial banking authority, as well as to

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3.On March 2007.Sps.Chua (Trustors and BDOPBTrustee entered into a cancel the tri st reated thereby. for themselv s aind reserving unto themselves the right to revoke, amend, annul. and Trust Agreer ert whereby Sps.Chua conveyed to BDOPB an amount in cash,in trust

The Trust Ac so int was originally designated as Trust Account No. compliance ith this directive, beginning January 1,2009,BDOPB renamed Trust Standards. Acunting Standards, and the Finan ial Reporting Package (FRP. In fiduciary acc ounts to align said accounts with the Philippine Financial Reporting Account No. May 26. 200: . te Bangko Sentral ng Pilipinas issued Circular No. 609, series of 2008. whereby all us institutions are required to revise and reclassify existing trust and/or as the FRP -- Compliant Trust Account No. . On

5.Pursuant to ie terms of the Trust Agreement, EDOPB purchased, with the funds transferred to it in trust by Sps. Chua, the following properties (the Trust Properties"):

a. Real pr perty containing an area of six hundred twenty-eight (628) name o! BDO Private Bank, Inc. as TRUSTEE for T.A. No. the la's of the Phils. squar : reters. with inprovement, situated in Quezon City, covered by Trans fer Certificate of Title (TCT No. commercial banking corp. duly organized and existing under and registered in the

b. Real rcerty containing an area of six hundred600square meters.with Weal n idvisory & Trust Group, in trust for the trustor named in the impr ve nent. situated in Quezon City, Covered by TCT No. Trust A reement under BDO Trust Account No. and registered in the name of BDO Private Bank, Inc. : and c. Real rc perty containirg an area of seven hundred twenty (720 square meter nore or lesssituated in Calamba Citycovered by TCT No. Trust Jr BDO PB TA No. and registered in the name of BDO Private Bank. Inc. as the Trust Fund').

7.BDOPB bein. th. trustee and the legal title holder, the Trust Properties were registered 6.The taxes due r the acquisition of the Trust Propertie were all paid,and the respective in the name o B DOPB in trust for Sps. Chua (RDO) No. 4( - ibao. Quezon City and RDO No. 56Calamba City, respectively. Certificates ut orizing Registration were issued by the Revenue District Office

8. Sps. Chua. be ng the beneficial owners, have decided (hat they already want to transfer and consolida e te titles on the Trust Properties in their names. Thus, on April 6. 2021. Sps.Chua anDOPB executed a Deed of Conveyance over the Trust Properties

Reyes Tacandong&Co.(Sr S.MERRICK and MAUREEN CHUA) Page 3of 4 Of JUN 3 0 2022

which pror ide s:

coi solidated in the Trustors' names. There was no monetary or Val talle consideration for this consolidation of titles. Co iveyance so that the legal and beneficial titles will be BIOIB and the Trustors have agreed to execute this Deed of HEREAS. to give full effect to the Trustors intention.

Re istry of Deeds for Ouezon City, and Transfer Certificate of foralamba. the n. the Properties covered by Transf Certificate of Title Title Number Mauren Y. Chua. who are thus the real legal and beneficial Nu' nbers rev cable trust on behalf of Spouses Merrick G. Chua and ow ners thereof. hereby transfers and conveys unto Spouses Me ri k G. Chua and Maureen Y. Chua, in full ownership to TR ANSFEROR. acting in its capacity as Trustee of the NOW THEREFORE. and issued by the Registry of Deeds premises considered. : issued by the the

consideration and me el. acknowledges. confirms and consolidates the legal title and actual ownership over the Trt st Properties in the name of the Trustors. subject to CGT impos d under Section 24 (D)(1) of the National Internal Revenue Code of 1997 amended. considering that the transfer and reconveyance is not motivated by a valuable the Trustee.BDOPB i fvor of the Trustors.Sps.Chua.who are the actual owners thereof is not (Tax Code.as amend d.nor to the CWT prescribed in Revenue Regulations (RR No.2-98. as In reply theret - please be infermed that the transfer of title over the Trust Properties by

which the former acqu red by virtue of the Trust Agreement is not to be treated as another transfer separate and distinct fr m the sale between the original owner and the Trustee. The conveyance is merely to be treated a: a continuation and confirmation of titie in favor of the ultimate and real beneficiaries of the Tri st Properties. Furthermore. tl e conveyance by the Trustee in favor of the Trustors of the Trust Properties

because the aforesaid oroperties are not held primarily for sale to customers or for lease in the ordinary course of trad : (or business. Likewise. the tr in fer of the Trust Properties to the Trustees is not subject to the 12% VAT

consideration is not su oject to gift tax imposed under Section 98 of the Tax Code. as amended. since there is no donati e intent on the part of the Trustee. The transfer ane reconveyance of the Trust Properties to the Trustors without any monetary

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acknowledgment to suc Ieed is subject to the DST of P30.00 under Section 188 of the Tax Code, as amended. and Trustee. and the c n olidation of the legal title and actual ownership over the Subject Properties is a transfer a. d econveyance without monetary cosideration, and as such not subject to the DST imposed und r Section 196 of the same Tax Code, as amended. However, the notarial The Deed of Cor ve: ance executed to terminate the trust relationship between the Trustors

upon investigation, it w ill be ascertained that the facts are different, then this ruling shall be considered null and void This ruling is be ng issued on the basis of the foregoing facts as represented. However. if

Very truly yours.

K Commissioner of Internal Revenue Mreesama CAESAR R. DULAY D D52197

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1 The new rate was used since th transaction took place after the effectivity of R.A. No. 10963 (TRAIN Law)