Documentary Stamp Tax on the Sale, Barter or Exchange of Shares of Stock

CORRECTED COPY

Bangko Sentral ng Pilipinas

SUPERVISION AND EXAMINATION SECTOR OFFICE OF THE DEPUTY GOVERNORI

CIRCULAR LETTER NO. CL-2009. 019

TO All Authorized Agent Banks

Subject: Barter or Exchange of Shares of Stock Documentary Stamp Tax on the Sale

2009 between the Department of Finance and the Philippine Stock Exchange, Inc. ("PSE"), with the conformity of the Bureau of Internai Revenue ("BIR") (copy attached), all authorized agent banks ("AABs") are hereby informed that: Pursuant to the Memorandum of Agreement ("MOA") dated March 17

I. Collection of DST

and remit to the BIR through any of the AABs the DST at the rate of seventy-five thereof of the par value on the sale of shares fisted and traded through the PsE by Congress of the Philippines ("Congress") of the Documentary Stamp Tax ("DST") Law ("Period of Coverage"), brokers-taxpayers shall file the DST returns centavos (B 0.75) for every two hundred pesos (F 200.00) or fractional part par value, the amount of DST shall be twenty-five percent (25%) of the DST paid ("DsT on Secondary Trading"). Further, in the case of shares of stock without upon the original issue of said shares. From March 20, 2009 to June 30, 2009 or any earlier date of enactment

of the brokers-taxpayers and the corresponding DsT amounts that have been placed in a separate AAB account to be disposed of in accordance with the MOA. The AABs and brokers-taxpayers shail maintain a record of all the names remitted during the Period of Coverage. The brokers-taxpayers shall agree with their respective AABs on the other terms of the separate account, including the interest that will be earned by the amount deposited therein. The total DST on Secondary Trading collected by the AABs shall be

PAnANALAPINg MAtAtAG, BANSAnG PAnAtAg

A. Mabini St., Malate 1004, Manita, Phitippines Trunktine (632) 524-70-11 URL:www.bsp.gov.ph e-mail: [email protected]

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Il. Authority to Refund DsT

turn over the total collections of DST on Secondary Trading to the BIR, including exempting from DST the sale of listed shares through the PSE or the law that is interest accruing on said collections. passed does not provide for any retroactive effect, the AABs shall immediately In the event that by June 30, 2009, Congress does not pass a new law

Secondary Trading collected during the Period of Coverage, including any DsT the sale of listed shares through the PSE with retroactive application from March 20, 2009, AABs are duly authorized under the MOA to refund the DST on interest earned, to the respective brokers-taxpayers, as follows: In case a new law is passed on or before June 30, 2009, exempting from

a. The PSE shalt issue a circular ("PSE Circular") announcing that the MOA, the brokers-taxpayers may file their claims for refund with the AABs concerned; new law has been passed by Congress and that pursuant to the

b. The brokers-taxpayers shall submit a letter to the AABs to claim a refund of the DsT on Secondary Trading that they remitted during the Period of Coverage, accompanied by a copy of the PSE Circular duly certified by the PSE; and

c. Immediately upon receipt of the claim for refund, AABs shall refund the DST on Secondary Trading, together with any interest earned thereon, to the respective brokers-taxpayers.

Il. Liabitity for DST

shall be solidarily liable and responsible for any deficiency DST on the sale of listed shares through the PSE in accordance with law and reguiations, the concerned broker-taxpayer

[V. Further Action and Cooperation

actions that may be necessary to carry out the purposes of the MOA The Department of Finance and the PSE agree to take any and all

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For your guidance and strict compliance

NeStOr A. ESPENILY JR

Deputy Govern8r

L9..- March 2009

Att:. AS

Quezon City ANNEx A

MEMORANDUM OF AGREEMENT BETWEEN THE PHILIPPINE STOCK EXCHANGE, INC. DEPARTMENT OF FINANCE AND

day of March 2009 between: This Memorandum of Agreement (the "Agreement") is entered into this I+

(1) Department of Finance (DOF), with office at the 6th floor, Manila, represented herein by Secretary Margarito B Teves; and DOF Building, Roxas Bouievard corner Pablo Ocampo St.

(2) The Philippine Stock Exchange, Inc. (PSE), a corporation herein by Francisco Ed. Lim, President & CEO; principal office at Philippine Stock Exchange Centre, Exchange Road, Ortigas Centre, Pasig City, represented duly organized under the laws of the Philippines, with

(herein collectively referred to as the "Parties"), outlines the framework for a collaborative undertaking.

WHEREAS:

March 20, 2009: local stock exchange is exempt from documentary stamp tax (DST) for a period of five (5) years from March 20, 2004 when Republic Act No. 9243 took effect or until (A) The sale, barter or exchange of shares of stock listed and traded through the

on the aforesaid stock exchange transactions to take effect "beginning March 20, 2009 or immediately upon the expiration of the five (5)-year.exemption period"; and (B) The House of Representatives passed on second reading the abolition of DST

stimulate investments and trading activities despite the global financial crisis. (C) The common objective of the Parties is to create an enabling environment to

as outlined herein: Now, therefore, the Parties have reached an agreement on mutual cooperation

Collection of DST

From March 20, 2009 to June 30. 2009 or any earlier date of enactment

every P200 or fractional part thereof of the par value on the sale of shares listed by Congress of the DST law ("Period of Coverage"), the brokers-taxpayers shall file the DST returns and remit to the Bureau of Internal Revenue ("BIR") through any of the authorized agent banks ("AABs") the DST at the rate of P0.75 for and traded through the PSE ("DST on Secondary Trading"). Further, in the case five percent (25%) of the DST paid upon the original issue of said stock. of stocks without par value, the amount of the DST shall be equivalent to twenty.

with their respective AAB on the other terms of the separate account, including the interest that will be earned by the amount deposited therein. been remitted during the Period of Coverage. The brokers-taxpayers shall agree placed in a separate AAB account to be disposed of in accordance with this MOA. The AAB and the brokers-taxpayers shall maintain a record of all the names of the brokers-taxpayers and the corresponding DST amounts that have The total DST on Secondary Trading collected by the AABs shall be

Authority to Refund DST

including all interests accruing on said collections. turn over the total collections of DST on Secondary Trading to the BR. exempting from DST the sale of listed shares through the PSE or the law that is passed does not provide for any retroactive effect, the AAB shall immediately In the event that by June 30, 2009, Congress does not pass a new law

the DST on Secondary Trading collected during the Period of Coverage, DST the sale of listed shares through the stock exchange with retroactive including any interest earned, to the respective brokers-taxpayers, as follows: application to March 20, 2009, the AABs are hereby duly authorized to refund In case a new law is passed on or before June 30, 2009 exempting from

a. The PSE shall issue a circular ("PSE Circular") announcing that the new law has been passed by Congress and that pursuant to this with the concerned AABs; Agreement, the brokers-taxpayers may file their claims for refund

b. The brokers-taxpayers shall submit a letter to the AABs to claim a refund of the DST on Secondary Trading that they remitted during the Period of Coverage. The claim for refund shall be accompanied by a copy of the PSE Circular duly certified by the PSE;

C Immediately upon receipt of the claim for refund, the AABs shall

refind the DST on Secondary Trading, together with any interest earned thereon, to the respective brokers-taxpayers.

I. Liability for DST

broker-taxpayer shall be solidarily liable and responsible for any deficiency DST on the sale of listed shares through the PSE. In accordance with law and regulations, the concerned

IN. Further Action and Cooperation

necessary to carry out the purposes of this Agreement. The parties agree to take any and all actions that may be

through their authorized representatives herein below, on the above mentioned day, month and year. IN WITNESS WHEREOF, this Agreement has been signed by the Parties

DEPARTMENT OF FINANCE THE PHILIPPINE STOCK EXCHANGE

MARGARITO B. TEVES Secretary Francisco Ed. Lim President &CEO 30v3i y

CONFORME:

Commissioner of Internal Revenue SIXTO S.ESQUIVIAS IV

Witness Tosaso Raldar Witness