Capital Gains Tax for Onerous Transfer of Shares of Stocks Not Traded Through the Local Stock Exchange.
TAX FORMBIR Form 1707 - Capital Gains Tax Return (For Onerous Transfer of Shares of Stocks Not Traded Through the Local Stock Exchange)
DOCUMENTARY REQUIREMENTS
1) One original copy and one photocopy of the Notarized Deed of Sale/ Exchange of shares of stock
2) Photocopy of the Deed of Acquisition or proof of cost/ fair market value of the stocks at the time of acquisition
3) Photocopy of certificate of shares of stock
4) Photocopy of evidences of expenses related to sale
5) Photocopy of Audited Financial Statements duly certified by an independent certified public accountant with computation of fair market value per share at the time of sale.
6) Duly approved Tax Debit Memo, if applicable
Additional requirements may be requested for presentation during audit of the tax case depending upon existing audit procedures.
PROCEDURES
File the Capital Gains Tax return in triplicate (two copies for the BIR and one copy for the taxpayer) with the Authorized Agent Bank (AAB) in the Revenue District where the seller or transferor of stocks is registered. In places where there are no AAB, the return will be filed directly with the Revenue Collection Officer or Authorized City or Municipal Treasurer.
One-Time Transaction (ONETT) taxpayers shall mandatorily use the eBIRForms in filing all of their tax returns. They may opt to submit their tax returns manually using the eBIRForms Offline Package in the RDO where the seller or transferor of stocks is registered or electronically through the use of the Online eBIRForms System. (Sec. 3(2) RR No. 6-2014)
TAX RATES
For Shares of Stocks Not Traded in the Stock Exchange
- Not over P100,000 - 5%
- Any amount in excess of P100,000 - 10%
TAX FORMBIR Form 1707 - Capital Gains Tax Return (For Onerous Transfer of Shares of Stocks Not Traded Through the Local Stock Exchange)
DOCUMENTARY REQUIREMENTS
1) One original copy and one photocopy of the Notarized Deed of Sale/ Exchange of shares of stock
2) Photocopy of the Deed of Acquisition or proof of cost/ fair market value of the stocks at the time of acquisition
3) Photocopy of certificate of shares of stock
4) Photocopy of evidences of expenses related to sale
5) Photocopy of Audited Financial Statements duly certified by an independent certified public accountant with computation of fair market value per share at the time of sale.
6) Duly approved Tax Debit Memo, if applicable
Additional requirements may be requested for presentation during audit of the tax case depending upon existing audit procedures.
PROCEDURES
File the Capital Gains Tax return in triplicate (two copies for the BIR and one copy for the taxpayer) with the Authorized Agent Bank (AAB) in the Revenue District where the seller or transferor of stocks is registered. In places where there are no AAB, the return will be filed directly with the Revenue Collection Officer or Authorized City or Municipal Treasurer.
One-Time Transaction (ONETT) taxpayers shall mandatorily use the eBIRForms in filing all of their tax returns. They may opt to submit their tax returns manually using the eBIRForms Offline Package in the RDO where the seller or transferor of stocks is registered or electronically through the use of the Online eBIRForms System. (Sec. 3(2) RR No. 6-2014)
TAX RATES
For Shares of Stocks Not Traded in the Stock Exchange
- Not over P100,000 - 5%
- Any amount in excess of P100,000 - 10%
BASIS IN THE VALUATION OF PROPERTY
For shares of stocks, it will be based on the net capital gains realized from the sale, barter, exchange or other disposition of shares of stocks in a domestic corporation, considered as capital assets not traded through the local stock exchange.
Definition of "fair market value" of the Shares of Stock
In the case of shares of stock not listed and traded in the local stock exchanges, the value of the shares of stock at the time of sale shall be the fair market value. In determining the value of the shares, the Adjusted Net Asset Method shall be used whereby all assets and liabilities are adjusted to fair market values. The net of adjusted asset minus the liability values is the indicated value of the equity.
The appraised value of real property at the time of sale shall be the higher of –
(1) The fair market value as determined by the Commissioner, or
(2) The fair market value as shown in the schedule of valued fixed by the Provincial and City Assessors, or
(3) The fair market value as determined by Independent Appraiser
Determination of Gain or Loss from Sale or Disposition of Shares of Stock.
The gain from the sale or other disposition Stock. — The gain from the sale or other disposition of shares of stock shall be the excess of the amount realized therefrom over the basis or adjusted basis for determining gain, and the loss shall be the excess of the basis or adjusted basis for determining loss over the amount realized. The amount realized from the sale or other disposition of property shall be the sum of money received plus the fair market value of the property (other than money) received, if any.
DEADLINE
Within 30 days after each sale or disposition of shares of stocks or real property. In case of installment sale, the return shall be filed within 30 days following the receipt of the first down payment and within 30 days following the subsequent installment payments. Only one return shall be filed for multiple transactions within the day.
Within 30 days after each sale or disposition of shares of stocks or real property. In case of installment sale, the return shall be filed within 30 days following the receipt of the first down payment and within 30 days following the subsequent installment payments. Only one return shall be filed for multiple transactions within the day.
