I'm Giancarlo Enrico S. Pozon, a Wushu instructor, investor and Barrister... That's right, Barrister; I graduated from law school and took the Bar Exams, now I'm waiting for the results. I created this blog to make Philippine Law easy to understand for the average person. It's all about free legal advice. There are many law blogs. But the problem is that many of them are written for lawyers and law students. They use words that can't be understood by ordinary people.
Many lawyers, judges and law students consider themselves as superior to most human beings because of their knowledge of the law. It bothers me since the law is supposed to serve society. Since the law is meant to serve society as a whole, it is important that is must be understood by everybody.
This does not mean that we should all become lawyers. It means that although law is a highly specialized profession, the first duty of everybody in this profession is to make the law understandable to all; that's why all these articles are free legal advice.
Like I said, this blog is about law -but it's for the ordinary people, not the lawyers. It's for the ordinary folk so they will know what is good and bad for them, and that making them aware of the law will help us all improve society as a whole. This is free legal advice for everybody!
Besides those taxes mentioned in Final Capital Gains Tax, MCIT, Creditable and Final Withholding Taxes and Corporate Tax Basics, there are other kinds of taxes that affect corporations in one way or another.
Wash Sales
A wash sale is a pretended sale between traders in the stock market to make it look like there is activity going on in the stock of a particular company. Wash sales are taxed without deductions from loss.
Gross Philippine Billings
This refers to gross income of foreign shipping or aircraft companies whose trips begin or pass through the Philippines. A special rate of 2.5% is imposed on the part of the travel that started in the Philippines. In case of transshipment where the ship passes through Philippine waters, the part that begins in the Philippines and ends at the transshipment point is taxed.
Short Sales
These are sales of a stock borrowed from somebody else and bought back at a lower price. To illustrate, Let's say Loser, Inc.'s stocks are valued at Php100 per share. Bob owns 10,000 shares of Loser, Inc. Bill borrows all of Bob's shares and sells them for Php1M. Later, the shares drop to Php30 per share. Bill buys the shares back for Php300,000 and returns them to Bob. Bill has a profit of Php700,000. This sale is subject to capital gains tax.
Exempt Exchanges
Exchanges not involving money in mergers and consolidations are exempt from income tax because there is no money involved. The BIR isn't interested in cashless transactions (obviously!) If the exchange isn't solely in kind (meaning there's some money involved) the income from the exchange in question is taxed without deductions for losses, like a wash sale. But if the merger/consolidation plan requires that the money must be distributed to the shareholders of the absorbed corporation, the gain isn't subject to income tax. Also property exchanged for stocks in order to gain control of a corporation (should be 51% at least for 1 person or a maximum of 4 people if made by a group) are also income tax-exempt.
1 comments:
Thank you so much for this Sir..
CPA in the making here :-)
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