The Philippines Bureau of Internal Revenue (BIR) is insisting that, to maintain their tax incentives, listed companies will need to prove their compliance with a minimum 10% public holding of their share capital.
The BIR Commissioner, Kim Henares, has written to the country’s Securities and Exchange Commission (SEC) repeating the threat that, all transactions in the shares of listed companies whose minimum public holding falls below that percentage, exclusive of any treasury shares, will suffer a capital gains tax of 5%, for transactions with a value of up to PHP100,000 (USD2,260), or 10% if above PHP100,000, rather than the favourable 0.5% stock transaction tax imposed to date.
In November last year, the Finance Secretary, Cesar Purisima, had already instructed the BIR to inform the SEC that the new minimum public float requirement, then between 10% and 33% dependent on market capitalization, should be complied with at all times.
The requirement was to be adhered to, not only to protect the country’s tax revenues, but also to encourage foreign investors into the Philippine Stock Exchange by providing more liquidity to each listing and, thereby, making it more transparent and attractive to both local and foreign investors.
The BIR Commissioner, Kim Henares, has written to the country’s Securities and Exchange Commission (SEC) repeating the threat that, all transactions in the shares of listed companies whose minimum public holding falls below that percentage, exclusive of any treasury shares, will suffer a capital gains tax of 5%, for transactions with a value of up to PHP100,000 (USD2,260), or 10% if above PHP100,000, rather than the favourable 0.5% stock transaction tax imposed to date.
In November last year, the Finance Secretary, Cesar Purisima, had already instructed the BIR to inform the SEC that the new minimum public float requirement, then between 10% and 33% dependent on market capitalization, should be complied with at all times.
The requirement was to be adhered to, not only to protect the country’s tax revenues, but also to encourage foreign investors into the Philippine Stock Exchange by providing more liquidity to each listing and, thereby, making it more transparent and attractive to both local and foreign investors.
