In general, the sale, barter, exchange or other disposition of shares of stock in a Philippine corporation not traded in the stock exchange is subject to the following:
- Capital Gains Tax (CGT)
The rate for non-resident foreign corporations remains at 5% for the first Php 100,000 of net gain and 10% on amounts in excess of Php 100,000. For resident individuals and domestic corporations, the CGT rate is 15% of net gain.It is imposed on the net capital gains realized during the taxable year from the sale, exchange or other disposition of shares of stock in a domestic corporation.The CGT shall be paid within thirty (30) days from the date of a share purchase agreement is notarized/consularized.
- Documentary Stamp Tax (DST)
The rate is Php 1.50 on each Php 200 of the par value of the shares of stock sold.It is imposed on all sales, or agreements to sell, or memoranda of sales, or deliveries, or transfer of shares or certificates of stock in any association, company, or corporation.The DST shall be paid within the first five (5) days of the month succeeding the date of notarization/consularization.
- Donor’s Tax
The rate is 6% of net donations for gifts above Php 250,000 yearly regardless of relationship to the donor.If the fair market value (FMV) of the shares of stock exceeds the selling price, the difference may be subject to donor’s tax.The Donor’s Tax shall be paid within thirty (30) days after the date the gift is made or completed.
The CGT, DST and Donor’s Tax shall be paid at the same time the return is filed.
In case of failure to timely file the returns and pay the taxes due shall subject the basic tax to a 25% surcharge, 12% interest per annum, plus graduated compromise penalties of up to Php 50,000.
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