DOCUMENTARY STAMP TAX ON THE SALE, BARTER OR EXCHANGE OF SHARES OF STOCK

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

I. Collection of DST

From March 20, 2009 to June 30, 2009 or any earlier date of enactment
by Congress of the Philippines (“Congress”) of the Documentary Stamp
Tax (“DST”) Law (“Period of Coverage”), brokers-taxpayers shall file the
DST returns and remit to the BIR through any of the AABs the DST at the
rate of seventy-five centavos (P0.75) for every two hundred pesos
(P200.00) or fractional part thereof of the par value on the sale of
shares listed and traded through the PSE (“DST on Secondary Trading”).
Further, in the case of shares of stock without par value, the amount of
DST shall be twenty-five percent (25%) of the DST paid upon the
original issue of said shares.

The total DST on Secondary Trading collected by the AABs shall be
placed in a separate AAB account to be disposed of in accordance with
the MOA. The AABs and brokers-taxpayers shall maintain a record of all
the names of the brokers-taxpayers and the corresponding DST amounts
that have been 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.

II. Authority to Refund DST

In the event that by June 30, 2009, Congress does not pass a new law
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 AABs
shall immediately turn over the total collections of DST on Secondary
Trading to the BIR, including interest accruing on said collections.

In case a new law is passed on or before June 30, 2009, exempting
from 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 Secondary Trading collected during the Period of
Coverage, including any interest earned, to the respective
brokers-taxpayers, as follows:

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

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.

III. Liability for DST

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

IV. Further Action and Cooperation

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

For your guidance and strict compliance.

Adopted: 19 March 2009

(SGD.) NESTOR A. ESPENILLA, JR.
Deputy Governor

 

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^[*] Text Available at Office of the National Administrative Register, U. P. Law Complex, Diliman, Quezon City.